Affiliate Marketing 101, Part 1: How does it all work?

Welcome to our Affiliate Marketing 101 Series! Affiliate marketing is an integral part of e-commerce for small and large businesses alike.

If you’re just starting to learn about it, you might find it a bit overwhelming. You might find it so complex that you’re even considering dropping out of the e-commerce game altogether to pursue your second passion, learning to play the harp. Well, put that ridiculous pipe dream aside because, in reality, affiliate marketing is actually quite simple. In this five part series, I hope to break it down into its most critical aspects and give you the understanding you need to plan out and implement the affiliate marketing strategy that works best for your business. So let’s get into it!

The Basics 

Out in the endless universe of forums, blogs, wikis, and cat videos that make up the internet, there are a plethora of websites trying to sell products. A lot of them. E-Commerce is growing so fast that it’s the only trillion dollar industry with double-digit annual growth percentage in the world. In this increasingly competitive climate, e-businesses need a way to dramatically increase their odds of landing a sale, or even being know about at all for that matter. Affiliate marketing is one of the ways they do this.

Let’s say for example that you have a business that sells funny t-shirts of characters from 90s movies. The people that have bought from you love your products, you have a beautiful website and you market your wares on all the social media platforms. The problem is that only 8 of those shirts sold last week! And worse than that, they were all shirts of Nicholas Cage from the movie Con Air!

However there is another website you know about, 90s Movies.com where people can browse a detailed database of 90s movies as well as use the sites forum to argue about which one is the best. This site receives a huge amount of traffic each month from movie fanatics but hardly makes any money. So you email them and tell them that if they put up an ad for your site on their own, and that add results in t-shirt sales, you will give them a handsome commission.

And thus, one of the greatest symbiotic relationships in the world of e-business has been activated! You (the merchant) get to benefit from the huge global network of die-hard 90s movies fans that your new affiliate partner has connected you with. And they (the publisher) have a relatively easy way to make money from their website. Now you can start selling more Pulp Fiction hoodies, Forest Gump women’s tank tops, and yes, Con Air t-shirts.

Your partner now has an incentive to make sure her website is always updated and in tip-top shape so that she can get more page views, more potentials clickthroughs to your site, and most importantly, more potential commission bucks. And you need to maintain good sales and keep producing great products lest you lose your movie experts to some other shirt maker. The two of you might even start to collaborate to come up with special promotions and ads that will appeal to your niche demographic. Before you know it, you and your affiliate partner will fall madly in love and end up married with 3 kids, all named after characters from Clueless. Look at how far you’ve both come!

That’s it in a nutshell. With Affiliate marketing, an e-commerce site is essentially converting any uncapitalized real estate on the web into more advertising space for their company. As long as your partner’s website attracts the type of people you’re trying to sell to and is also willing to form a relationship with you, you’re in business.

Take a look at our iDevAffiliate Software options today!