What is affiliate marketing and how does it work?

affiliate marketing explained

Online marketing businesses continue to thrive with affiliate marketing as one of the most popular venues people choose. Since this is a model or framework that makes it possible for various brands to partner with individuals, not requiring major investments from the affiliates’ side, understanding the basic principles of the business will help beginners get started quicker.

What is affiliate marketing?

Affiliate marketing is a relatively new industry that involves product-driven companies looking for customers, and “affiliates” wanting to sell those products in exchange for a commission. As a result, the main players in this industry are:

  • Brands or companies (those who want to sell products or services).
  • Affiliates (also known as partners or publishers) can be bloggers, active social media posters, niche content websites, product review websites, mobile apps, marketing platforms, and many others.
  • Affiliate networks: taking care of handling, tracking, reporting, and payments to affiliates. These networks also give brands access to a network of affiliates who apply to join.
  • SaaS (Software as a Service) Platforms: focused solely on the technological aspects of an affiliate program, SaaS platforms provide companies with performance trading, reporting, and payment.
  • Agencies: companies that manage operations, the program strategy on behalf of brands that want to sell their products. Agencies work directly with affiliates and with the affiliate network.
  • Customers: the target audience of affiliates, people who could be interested to buy the advertised products.

How does affiliate marketing work?

There are various sectors where affiliate marketing is used to sell products through affiliates. These include various physical or digital products, as well as services like education or finance, an example of which is online trading that can be promoted via the easyMarkets Partners program, among others.

The main goal of an affiliate program is to create a win-win framework for both the brands involved and the affiliates. We can resume the entire process to some simple steps. The affiliate partner promotes some products or services created by one or more brands. Consumers click on the brand’s promotion on the affiliate’s website, then they are redirected to the brand’s website.

If consumers are interested in one or more products, they make a purchase and then the SaaS network automatically pays out a commission to the affiliate for contributing to the sale.

People choose to join the affiliate marketing sector because most of the infrastructure is already built; the only thing they need to do is to create their own advertising platform (a website, a social media page, etc.) in order to target customers. This is one of the main reasons why affiliate marketing is accessible for many people to try.