How Affiliate Marketing Generates Revenue

Affiliate marketing is a quick, inexpensive and very effective way to make money online. It quickly helps marketers to be their own bosses. With affiliate marketing you can stave off many business hassles associated with working for someone else, actually selling a product, worrying about customer feedback, or customer service. Every marketer works to earn money and affiliate marketing is no exception from that rule. An affiliate earns a commission if he helps to sell products from products merchants. There are multiple ways in which this affiliate commission can be calculated. It can be fixed or a percentage of the profit made by the product merchant on pre-agreed terms. It is all about commissions, commissions and more commissions. That’s where the revenue is. Generally, affiliate marketing generates revenue in the following ways. 

1. Pay-Per-Click, PPC: With PPC, what an affiliate does is to redirect buyers to a merchant’s website. The affiliate simply needs to perform deliberate actions that can lead a buyer from the affiliate’s platform to the merchant’s website. It is all about redirecting traffic from the affiliate’s website/platform to the product merchant’s website. Once a click is made on the merchant’s website, the affiliate earns a commission. That means the merchant pays the affiliate to simply help increase traffic to the merchant’s website.

2. Pay-Per-Sale, PPS: With PPS, a commission is earned only when an actual sale is made. It entails paying a commission to the affiliate by the product merchant in terms of a percentage of the sale price of the product/service being promoted. In actual fact, a buyer must actually buy a product for an affiliate to get paid a commission. Characteristically, this appears to be the standard mode of payment in most affiliate marketing arrangements.

3. Pay-Per-Lead, PPL: With PPL method of compensation, what an affiliate needs to do is to drive the conversion of leads. The main job of the affiliate is to lead consumers to the merchant’s website to make them complete a desired action. Such actions could include but not limited to signing up for a trial, subscribing to a newsletter, filling a contact form, downloading some software or a combination of several other desirable marketing actions.

 

Generally, Affiliates can only make money if they are running a good blog or they are influencers with a large following/audience. Many affiliates are known to market specifically to a niche audience that they command a lot of influence over. If they promote products based on the interests of their target audience, they get better conversions. An affiliate or a publisher can be an individual, a group of people, or a company that markets the product/service of a merchant to prospective customers. The affiliate simply plays a role in helping consumers to make their buy decisions and he earns a commission from these efforts. An affiliate helps in persuading and influencing the decision-making process of the consumers, appealingly. Affiliates earn commissions as sales are being made through these efforts.