Affiliate marketing is a term we’ve been hearing more of recently yet isn’t a new concept. However, many people, especially in business, don’t seem to know how it works, and if they should be a part of it. So, let us break it all down for you.
What Is Affiliate Marketing?
Affiliate marketing is when a business compensates an individual (the affiliate) for handling some of their marketing. An affiliate helps to promote the products and services of that business by sending leads and traffic to their site through their own website.
How Exactly Does It Work?
A business implementing affiliate marketing “hires” people to put links, banner ads, or text ads onto their various websites and email lists in the hopes that a visitor reading it will click on it.
If a visitor buys from an affiliate’s site, they’re rewarded for facilitating that sale. Compensation is agreed upon at the beginning of your deal, but generally, it’s a small percentage of the sale price.
For example, if your product costs $100 and one of your affiliates gets 5% of each sale price, you’d owe them $50 if you received 10 sales from them during the payout period.
Some businesses even pay some sort of compensation for every click-through to their site, but most companies only pay when there is a sale.
Why Isn’t Every Business Doing This?
Any business that uses affiliate marketing will tell you it can be a great addition to any online marketing you’re already doing. It’s an easy and relatively inexpensive way to get eyes on your product or service.
However, it can be challenging to set up and actually find affiliates to promote you. Unfortunately, the potential for fraud in affiliate marketing is also huge. Some people take advantage by buying similar domains to yours then getting credit for the re-direct, or registering potential customers on your site using false information. And it doesn’t end there. It seems those dishonest affiliates will find almost any way to scam the system to get you to pay out.
So, it’s imperative to have some legalities in place. First, lay out all the terms and conditions and base them on what you expect of your affiliate, and what and when compensation will be given. Then, you can finalize your agreement.
Unfortunately, it’s often necessary to also monitor your affiliates and watch for this fraudulent activity and other issues that may come up. The more affiliates you have — the more sales you’re likely getting, but the more you need to monitor for potential problems. Affiliate monitoring can take up a lot of time and resources your company may not currently have.
Contact Flynn Digital Plus
As you can see, affiliate marketing is a great way to raise sales and get more eyes on your brand, but it does come with a few drawbacks.
If you’d like to learn more about affiliate marketing and how you might benefit from it, contact Flynn Digital Plus for more information. We’re marketing experts and can help you figure out the best ways to grow your brand.