Affiliate Marketing Basics

What is Affiliate Marketing? Affiliate marketing is one of sub-branches of modern marketing which involves merchant, affiliate and buyer. I will explain affiliate marketing on few simple examples from real life...

Example 1. Two girls are talking about hair care... First girl is asking her friend to recommend her good shampoo... Second girl told her that she's using Head & Shoulders (for example) for years and that it's best one in her opinion. The first girl went to shop next day and bought one bottle.

Example 2. Two guys are talking about sports. One of them wants to buy some good sport magazine but don't know which one. His friend told him what's his favorite and tomorrow the other guy bought a magazine.

So now let's explain what these examples have too do with Affiliate Marketing... In both examples you have:
1. Merchant (Head & Shoulders, Sport Magazine)
2. Affiliate (Guy and Girl who recommended Merchant's product to new customer)
3. Customer (Guy and Girl who bough product after they were recommended to them)

One important thing is that in my examples affiliates haven't recived anything for their work, but in Online affiliate marketing affiliates are paid to promote Merchant's products by getting % of money Merchant earned by selling it's products to new customers. Here's example:

If girl and guy who are affiliates in examples had their web site they could tell their friends to visit it and buy product from there. This way they could earn some money because merchant would know who (which site) sent him these new customers. It's simple as that :)
One other and very important advantage of Online affiliate marketing is that Internet is international market, and everyone can make new customer from any part of the World. Let's say Mike from America makes web site and Hose from Spain visits it and goes to merchant's web site and buys product - Mike will get some money. Next day Mike's web site can be visited by Liu from China, Vladimir from Russia and Tonya from Canada... If Mike had local store in Texas it's hardly imaginable he would have customers from China, Russia and Canada in same day :) Hope you understand what's Affiliate Marketing now.

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