Affiliate marketing can be a very lucrative career but not sure which route to take? Read further for some simple explanations to help you decide.
As you may already be aware, affiliate marketing is an extremely simple but very powerful concept and is known as the quickest and easiest way of earning on the net. Quite basically, the concept is to use the Internet to sell the products or services of other businesses on a commission basis. Commission is received by the affiliate from the merchant for each sale made.
There are many classified types of affiliate marketing but they all fall under two basic categories of pay per performance and pay per click.
Pay Per Performance
Under this umbrella, pay per performance (PPP) will mean that the affiliate receives commission when a visitor from their own affiliate id performs the required action. This may be either be an actual sale where commission rates are generally anywhere between 10-50% with the most popular products tending to give less commission than the less popular ones, or a generated lead where the affiliate is paid for every person that is registered on the merchant’s website. This can be quite attractive to an affiliate as they can earn anywhere between 15-20% of any subsequent sales made.
Pay Per Click
Also known as PPC, pay per click affiliate marketing is considered to be extremely popular and also the easiest method to earn money and is ideal for those who have small websites. The marketer quite simply places banners and text ads that have already been created by the merchant onto his own website. A commission is paid out from the merchant to the affiliate for every click that is made on these banners or ads. There is no necessity for a following sale to be made therefore, the payouts tend to be very small (usually less than $1) compared to the other options mentioned within this article.
Affiliate marketing can also be classified in terms residual income marketing and of tiering; single, two-tier and multi tier.
Residual Income Marketing
Once a purchaser has bought his first purchase, made through the link id of an affiliate marketer, not only does the affiliate marketer get paid a commission on the sale, he will also get commissions based on future sales of the buyer. The methods to achieve this are really easy to understand; a cookie is generated from the unique affiliate id and placed on the computer of the purchaser at the point of first purchase. Normally this cookie will expire after three months but it can remain longer. When a buyer then returns to the merchant to make another purchase, his computer is instantly checked to see if an affiliate cookie is registered and if it is found, the affiliate will get credited for the sale. It is important to note that cookies are not in any way harmful to the computer and do not contain any personal information that can be seen or used by a third party.
Single Tier
The affiliate gets the commission for the traffic or sale at the merchant’s website depending on whether it is a PPC or PPP program.
Two Tier
The affiliate will get the commission for every action that the consumer makes and he will get commissions based on the performance of other affiliates recruited personally by him.
Multi Tier
The affiliate is paid in the same way as he would on a two tier program but the levels can go much deeper with commissions being made on the sales made by his/her recruited affiliates and their recruited affiliates also. The depth of the tier may be unlimited.
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