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Affiliate Marketing and How It Works

There are various revenue generating avenues offered by the internet and over time, affiliate marketing has become one of the top ones in this category.
Affiliate marketing is a kind of revenue sharing venture between the website owner (affiliate) and the online merchant. Basically, the affiliate who also owns a website puts up advertisements regarding the merchant's product or he may also put up the links to the merchant's website. Thus, whenever a customer is directed to the merchant website, the affiliate gets a share in the profits.
Benefits of affiliate marketing to the merchant includes lower advertising and marketing costs and lower operating overheads because the merchants do not need to maintain a large sales and marketing division as they get most of their advertising done off-site. Disadvantages to the merchant include inability to control the sales and marketing budget, and misrepresentation of the company or its products by the affiliates. To the affiliate, benefits include earning a living in commissions without commuting to work, knocking on prospective customers' doors, and/or cold calling. The affiliates operate as independent contractors and as such are not eligible for employee benefits.
There are three major means through which one can earn income in affiliate marketing. They are pay per click, pay per lead and pay per sale.
• In the pay per click option, every time a client moves from the affiliate website to the merchant website by clicking on the link, the affiliate receives a certain amount of the promised profit.
• In the pay per sale advertising option, the affiliate earns money every time a sale is made.
• Then, there is the pay per lead advertising, in which the affiliate earns his share of profit each time a client signs up on the merchant website through the advertisement that is put up on the affiliate website.
It is advisable for those planning on starting their own affiliate marketing businesses to find out the merchants payment methods before beginning to advertise for them.
In conclusion, it appears that with the advance of the internet and technology, and the deterioration of the economy, affiliate marketing seems poised to grow in future. This growth will be enhanced by the relative low cost of starting an affiliate business, the willingness of merchants to use the affiliates for marketing their goods and services, and the affiliates willingness to earn their income from marketing the merchants goods on their websites.
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