Work At Home Opportunities

Definition of Affiliate Marketing

Affiliate Marketing involves a relationship between two players – 1) the Merchant (also known as the advertiser, or partner), and 2) the Affiliate (also known as the publisher). If we consider the Affiliate Program in its entirety, we must take account of a third constituent, the Customer, as well.

The Merchant makes available the product for purchase, and the Affiliate tries to sell that product for the merchant and/or refer visitors to the merchant’s site. In return, the Merchant pays the Affiliate a commission for sales and/or established results.

Payment Arrangements

Payment plans are generally performance-based (which is a form of risk mitigation by the Merchant) and arrangements are normally structured as Pay Per Click (PPC), Pay Per Sale (PPS) and Pay Per Lead (PPL) – or some hybrid.

Affiliate Marketing Groupings

If we look at affiliate marketing in terms of depth, we have three distinct classifications: 1) single-tier, 2) two-tier and 3) multi-tier programs.

Single-Tier Affiliate Marketing Programs

In Single-Tier Affiliate Marketing, the Affiliates get the commission, only for the visitor’s traffic or sales to the merchant’s url. Pay/performance and pay/click fall under this category.

Two-Tier Affiliate Marketing

In Two-Tier Affiliate Marketing, the Affiliate gets paid commission for every action performed by the people he’s referred directly, plus he gets paid the commission when any of the people he’s personally referred gets the commission. Thus, he has a two-layer commission structure and the Affiliate earns a commission both directly and indirectly.

Multi-Tier Affiliate Marketing

The multi-tier marketing is very similar to Two-Tier Marketing, but here, the Affiliates get compensated for the sales made by their downline in multiple, unlimited, levels.

Residual Income Program

In Residual Income Affiliate Marketing, the Affiliate is paid for every sale that is made by any of his referrals.

In Residual marketing, Affiliates get the commission for every sale that his referral makes at the Merchant’s site. In order for this to work properly, the first time, the person should come from the Affiliate’s pre-defined affiliate link. Then, whenever the same person visits the Merchant website (even without using the affiliate link), the Affiliate will be paid for every sale performed by the visitor.

Cookies are what make this strategy work. A “cookie” is placed on the first-time visitor’s computer. This cookie defines the affiliate id of the Affiliate. Cookies typically expire after 3 months; however, some may persist beyond three months.

Whenever a visitor visits the Merchant website, the visitor’s computer is checked for any previously created cookie. If a cookie is found, the affiliate id is retrieved from it and the Affiliate gets credited for any purchase made by the visitor.

Win-Win-Win

When the affiliate marketing relationship is well-planned and well-executed, everyone wins:

The Merchant gets increased visibility and market penetration, attracting customers that would otherwise be outside the Merchant’s market reach.
The Affiliate earns a commission for online sales, without needing to establish a full e-commerce site or having to manage inventories and fulfill orders.
The Customer learns about, and can readily access desirable and useful products that s/he would otherwise not find – at least not easily.

Good Affiliate Marketing is a Win-Win-Win situation.