How do Affiliate Programs Work

Posted: May 16, 2012 in Growing your Business
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Also known as associate programs, affiliate programs are arrangements in which a merchant website pays its affiliate websites a commission for sending them traffic.  Affiliate websites post links to their merchant sites and are paid depending on terms. The agreement is often based on the number of users an affiliate site sends to the merchant site, or on the number of visitors who make actually purchases, download an e-book or perform other desired actions. If a link on the affiliate site brings the merchant site money or traffic, the merchant site pays the affiliate site based on their agreement. Hiring affiliates is a great way to sell your products or services only, but it can also be a cost effective way of getting word about your company.

 

Affiliate Program Payment Arrangements

There are three primary types of payment arrangements practiced in affiliate marketing.

  • Pay-per-lead. Organizations with these programs pay their affiliates based on the total number of visitors who sign up to their site. When a certain user fills out requested information at the merchant site, the affiliate site gets paid.
  • Pay-per-sale. A good example of this type of payment arrangement is Amazon’s affiliate program. The merchant site pays their affiliate sites whenever a visitor makes an actual purchase.
  • Pay-per-click. For these programs, the merchant site pays affiliate sites based on the number of users who click the link of their site. The visitors don’t have to sign up or purchase anything in order for the affiliate site to get paid.
Getting Affiliates

If you want to acquire affiliates for your site, joining an affiliate network can be your best bet. Affiliate networks will help you setup a program and find affiliate sites for you. All you need to do is fill out an application that outlines the nature of your business and your website. There are affiliate networks who also charge annual fees for their services. Although you would probably need about $3,000 to join a major affiliate service, you’ll reap tremendous benefits in no time. Your affiliate network should be able to set everything up, keep track of your account activities, issue affiliate checks and assign your links to the right affiliates.

Find out which affiliate network will work best for you. Read more on affiliate network reviews.

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