Affiliate marketing is certainly not new and is a very popular topic in internet marketing circles, so you may already be more than familiar with it. However if you’re not, this article is a crash course into the pros and cons of affiliate marketing for merchants and for affiliates.

Affiliate Marketing For Merchants

Affiliate marketing is another channel for attracting new customers.  By setting up an affiliate program, you put the technology in place so that website owners can refer visitors to you.  And of the visitors that become customers, the website owner makes a commission. So think of affiliates as commission-only sales people, who are only paid after the fact, and have no contract with you.

The benefits of this approach is it can grow sales significantly and you can reach an audience you may not really have been able to access otherwise, or not without significant time and money.  And it also takes much of the risk away as you don’t pay up front but only when a sale has been made.

Sounds ideal, right?  Well, it does have its drawbacks.

The technical side of an affiliate program is straightforward, but what can take a lot of work is finding affiliates and managing them.  Because affiliates that can really drive sales are spoilt for choice about who they promote, they often need to be convinced about why they should promote your products or services. And running an affiliate program is easier in many ways if you just deal with a smaller number of affiliates who can really drive sales.  It’s just that finding and bringing those affiliates on board can be a struggle.

Alternatively, you can make your affiliate program public where any website owner can sign up.  However there’s a couple of problems with that approach:

One – most affiliates won’t do anything.  5% of your affiliates might make some sales, and only 1% will make significant sales.  So really, you end up just dealing with affiliates who can really drive sales anyway, and the other 99% will distract your attention.

Two – by having your affiliate program public, it can mean that affiliates promote your business in a way you don’t approve of.  Plus all those affiliates need managing (questions answered and so on…) even if they’re not making any sales for you.

Being an Affiliate

If you have a website that receives traffic, and perhaps have other promotional channels too like an email list, well, you can be an affiliate. You can find offers that are relevant to your audience and that pay out commissions, and send visitors through your custom affiliate link.  That’s all it really takes.

The Future of Affiliate Marketing

Simply put, affiliate marketing isn’t going anywhere, but like everything online it is maturing.  The Wild West days of online marketing are (for better or worse) fading away.  So to make the most of affiliate marketing, either as a merchant or as an affiliate, it takes know-how and experience, since you’re up against entrenched competitors.

So affiliate marketing is a great way for merchants to make more sales and website owners to make more money, and it in fact helps drive sales for many huge websites, including eBay and Amazon.