Thursday, August 24, 2006

What is Affiliate Marketing?

What is affiliate marketing? I get this question a lot. Simply put, affiliate marketing is selling someone else's stuff and then getting a cut. It's a pay-per-action model, where the affiliate marketer gets a percentage of each sale (pay-per-sale) or a fee for every sign up (pay-per-registration) or lead (pay-per-lead) he or she generates.

So sells widgets. You happen to collect widgets as a hobby. You build a site about your widget collection and on that site you have an affiliate link to Whenever anyone clicks through that link and buys a Widget, you get a percentage of the sale. Sounds easy, doesn't it?

Some companies run their affiliate programs in-house (eVitamins for example). Others use affiliate management companies. The big four affiliate management companies are:
There are numerous smaller companies as well, but I haven't worked with any of them.

I'm also an affiliate of Affiliate Fuel. Affiliate Fuel is a pay-per-lead and pay-per-registration outfit.

The nice thing about affiliate marketing? Anyone can do it. All you need is a computer. Depending on the product or service you are marketing, you might not even need a web site. The lead and registration generation I do for Affiliate Fuel is exclusively through Pay-Per-Click (PPC) marketing, mainly Google AdWords, and to a lesser extent Yahoo Search Marketing (previously known as Overture).

Personally, and based on my experience since launching my first affiliate marketing effort in July of 2000, I think it has gotten much harder to make money in affiliate marketing. There's a more competition, the search engines are much less tolerant of affiliate marketing sites and links, new rules prevent bidding on trademarks in PPC, advances in spyware and mal-ware, a general decrease in commissions... all of this and more has made it difficult to start a new site, drive traffic to it, and sell stuff for someone else.

Nevertheless, if you are looking for a way to potentially make some money on the Internet in your spare time, affiliate marketing remains an option worth investigating.

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