What Is Affiliate Marketing

Online marketing and sales are hot, so asking what is affiliate marketing can be a logical place to start when considering any money making venture. Essentially, the practice is a low-risk and high-profit agreement between a website owner and an online merchant. It's low-risk because the practice doesn't really cost either party anything to get started. However, low-risk doesn't mean risks aren't involved. The website owner agrees to allow the merchant to post an advertisement for free. And the merchant only pays for actual sales or leads. Passive advertising and sales is what this marketing technique equates to. Both parties basically just sit back and wait for sales and profits to roll in. Among other items, people pushing credit cards, dating services, health services and pharmaceuticals, and computer software use the technique. Residual income also adequately answers what is affiliate marketing. This type of income keeps coming in after all the work has been completed.

Life doesn't usually work out as easy as that though, and goes against the Biblical principle of working hard. Easy doesn't imply that the system doesn't or can't work for those who do the initial groundwork and can manipulate the system. When asking the all important question of what is affiliate marketing and how can the practice earn a little extra money, look closely all the way from the beginning of the process to the end because the system can be potentially costly and time consuming, as well as loaded with hidden dangers. Sales and marketing are in a cutthroat and always changing arena. What works one day may not work the next day. Locating the right market for a specific product or service can be difficult. And a seller knows his or her profits are directly related to keeping production, distribution, and advertising costs low. Therefore, the opportunity to get something for nothing appears as a golden ticket for unscrupulous vendors. If a person finds by way of a website a harmful product or one just not as advertised, the affiliate website owner's reputation suffers at the very least. Thorough research is the key to not getting taken in and ripped off. "Enter not into the path of the wicked, and go not in the way of evil men. Avoid it, pass not by it, turn from it, and pass away." (Proverbs 4:14-15)

Now, that the question of what is affiliate marketing has been answered, how the practice works should be broken down. In theory the process really can appear to be very simple. First, the affiliate website owner and an online merchant enter into an agreement. Then the merchant places his or her advertisement for a product or service on the partner's website. An advertisement can sell the product or service outright or link the customer directly to the merchant's website. Website owners earn what amounts to a finder's fee in a variety of different ways. For example, each time a customer clicks on the advertisement and is redirected to the merchant's website, the click could earn a commission or fee. Sales earn a commission as well. Finally, if a customer registers with the merchant's website as a result of the advertisement, the affiliate earns a commission. What is affiliate marketing paying in terms of commission and fees? The pay scale varies and could be a percent of the total sale or a flat fee. Amount and method of payment should be negotiated and determined before signing the agreement. Be very clear about the amount and method of compensation. Ambiguity in wording presents a loophole that could lead to trouble, if there was ever a dispute concerning payment.

So, what is affiliate marketing really capable of doing for a person? Some business people consider this type of marketing to be one of the best ways to make money online. However, like almost everything, there are pros and cons to be considered. Some have already been mentioned. Of course profits earned with little work are a great benefit. But sales aren't guaranteed. Getting people to the websites on which advertisements are placed presents a problem. Merchants should carefully research a potential partner's website and make a determination as to whether or not enough traffic exists to warrant investing time and effort in the site. Website owners and merchants could possibly wait around for weeks or months before the first customer hit. No advertisement dollars are lost, but sales aren't generated for bad choices. Also, what is affiliate marketing system regulator's ability to keep track of merchants capable of operating on cyberspace from just about anywhere in the world? Merchants can change business names and websites and move from place to place all before paying money owed to the affiliate. And be cautious of any plan in which the primary purpose is to recruit people rather than sell a product or service. Some merchants realize that having more people selling their product or services results in more money. Most pyramid schemes are unethical, if not illegal. Also, administrators are responsible for the material displayed on their website.

Closing the topic of what is affiliate marketing with a final warning seems appropriate. Performance driven systems are subject to abuse by all parties involved. Often times the customer suffers and ends up paying for the abuse. Internet marketing is not highly regulated because internet oversight hasn't grown as rapidly as cyberspace itself. So beware of techniques and methods used by unscrupulous affiliates. Spam, fraudulent advertising, adware, and spyware are methods used to drive traffic to a merchant's site. In addition to these techniques, other liability issues exist. Copyright, trademark infringement, and fraud are serious issues carrying heavy consequences.