What are Affiliate Programs

Before inverting the time and money to create an Affiliate Marketing website it would be good to first define some of the terms used.

By definition, an affiliate is someone whose site is being used by companies to serve as its search sites for potential leads or customers. An affiliate is a small website owner who develops linkages and advertises this with blogs, banners, through Ezines and in his website to gain exposure and potential leads for a product that he sgreed to advertise. In return the merchant then pays the website owner a commission for the referral.

The merchant on the other hand are companies with products or services  they wish to sell and agree to share revenues with the affiliate.

This strategy can help augment the companies own sales program and increass exposure of the product to potential buyers.

1. Pay per click - the affiliate receives compensation/commission referring a customer to a merchant's website through links on the affiliates website. The merchant pays an agreed amount for each person who enters thier website by this referal. The Affiliate recieves payment evenif the referred person does not buy. The amount paid is usually very small.
2. Pay per sale - the merchant pays the affiliate only when the referral ends in a purchase. The amount paid is often much higher that with Pay Per Click. But the affiliate only gets paid when a sale is made. The amount may be a fixed amount or a percentage of the sale.
3. Pay per Lead - not all merchant practices this program although those who are also pays for a quality lead.

An affiliate marketer's website provides the content, services, information and entertainment as required to attract the potential customer. The merchant handles the inventory, delivery and other services that are normally practiced by sales and marketing companies.

Usually, affiliate programs ensure that the affiliate will be able to track the customers the affiliate have referred and the percentage of those that actually lead to sales. Conversion rates are shown which provides transparency in transactions.  The marketer may create thier own tracking system or they may employ a third party tracking system. 

For an affiliate to be successful, his site must generate very heavy traffic. It is not unusual for a site to be visited a couple of a hundred times before a sale is closed.

The need for high traffic often requires that the affiliate marketer spend a considerable amount of time to create the nessessary traffic. You will find affiliate forums and blogs to be a great source of information on how to increase traffic as well as help you build a network of other marketers than can help.