Overview
Affiliate marketing is a kind of online or
Internet-based marketing strategy that uses one website to drive traffic
to another website. In recent times, it has become one of the central
marketing focuses of many online companies. The main idea behind this
form of marketing is that one or more affiliates are compensated or
rewarded for attracting customers to another company.
How it Works
Affiliate marketing agreements are signed between two or more
companies. All companies involved in the agreement will send customers
to each another and receive compensation in exchange. This agreement
will explicitly state the amount of money to be rewarded for a specified
number of customers directed from one company to the other. Therefore,
the company that directed the customer receives the compensation from
the company that benefitted in terms of traffic or business. Both
parties must agree to the terms and conditions of this agreement.
Benefits
Of the several benefits that come from the use of affiliate
marketing, one of the most important on the list is the fact that you
will have another company's marketing efforts working to bring you
customers. This is a very economical way of increasing your cliental
because you do not have to pay the company if no new customers are
redirected to your company's website. Therefore, you do not lose any
money if you are not benefited by the other company. This is one of the
main reasons why many companies opt to market amongst many different
people.
Costs
You incur costs only if the directed customers generate business for
you. So, unless and until your business makes money, you need not spend a
penny. It's hard to generalize a specific cost for affiliate marketing
because in order to determine a set amount of money to pay partnering
companies, you must calculate your return investment.
Timing
There is no fixed period of time stipulated to adopt affiliate
marketing strategy. If you have not seen much success with the existing
set-up or if you are looking for growth, then you can try out affiliate
marketing at any time. It is easy to switch to affiliate marketing
because there are no costs for you until you gain profit.
