Can The Internet Businesses Survive Without Affiliate Marketing?

Summary:

What is an affiliate program? I’ve been bombarded with this question from Internet business newbies since I got myself involved in this very interesting but challenging

online business.

Many years ago, ever since we started manufacturing products for sale in the offline physical world, we had been having sales agents representing different manufacturers to help the latter to expand their markets. The agents conclude sales without carrying inventory, handling payments, si…

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What is an affiliate program? I’ve been bombarded with this question from Internet business newbies since I got myself involved in this very interesting but challenging

online business.

Many years ago, ever since we started manufacturing products for sale in the offline physical world, we had been having sales agents representing different manufacturers to help the latter to expand their markets. The agents conclude sales without carrying inventory, handling payments, signing contracts, sorting, packing and shipping of the products. Their main focus had been to make the sale by getting the orders from the prospects and existing customers, which were then processed by the manufacturers or merchants.

In the Internet online world we have affiliates instead of agents. Affiliates are highly targeted pay-for-performance sales agents.

There are also some forms of Internet advertising that rewards the affiliates for driving traffic to the advertiser i.e. the manufacturers or the affiliate program owners. The advertiser pays the affiliates to place a link on their website, and the affiliate sends traffic to the advertiser in return. In other words, it’s about the affiliates receiving commissions for helping in making the sales.

The most common reward is pay-for-sale, where the merchant pays the affiliates who referred the paying customers.

Affiliates are being considered as a complementary but very important sales channel although the merchants themselves continue to get their own direct traffic in making their own sales.

The affiliates do not have to suffer from the occasional sleepless nights worrying about the processing of orders, packing and shipping etc because this are being taken care of by the merchants who usually have an effective tracking system to determine which affiliates drive which orders to them starting with the so-called affiliate links. These are

the links that the affiliates put on their websites, newsletters, ezines or emails.

How does an affiliate link look like? You may ask. The most common affiliate link is embedded in the linking URL. For example, if you see a link like “http://www.abcmerchant.com/?xxxx=3456″, you can be quite sure that the affiliate with the ID (identification) 3456 will receive money from ABC Merchant when someone places his order after clicking that link.

Other affiliate links are more complex and encrypted with some sites having their links masked so that the prospects won’t be able to detect that the URL they’re clicking is an affiliate link.

An excellent example of an affiliate program is that of Amazon.com who happens to have one of the oldest affiliate programs in the Internet. Other possible affiliate programs are as follows:

1) “Pay per click” – the merchant pays the affiliates for the driving the traffic and the resulted orders to them.

2) “Pay per lead” – the merchant pays the affiliates for directing the prospects to register their interest with a possibility of making the sales later.

3) “Pay per subscription”

Can The Internet Businesses Survive Without Affiliate Marketing?