An “affiliate program” or “associate program” basically refers to a system or relationship in the affiliate marketing business between the merchant and its affiliates. basically, affiliate marketing comes down to you promoting someone else’s product, and each time the merchant makes a sale as a result of your efforts, you get paid. That is what affiliate marketing is.
Although, affiliate program was initially pioneered by Amazon, these days almost all businesses online have some kind of affiliate program.
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So, how exactly an affiliate program works?
Affiliate programs work in a very simple way. Let’s say you want to be an affiliate for Amazon.com and promote their products. First you need to sign up for Amazon’s affiliate program. Once you are approved, you can promote anything that is sold on Amazon.com.
But, how can Amazon track sales generated by your efforts?
Affiliate programs rely on a very simple, yet effective tracking technology to track sales made by their affiliates. When you are ready to promote a product, you will be given a special link.
Let’s say you want to promote “Personal Finance For Dummies” book. Amazon will give you a special link that looks something like this:
The last section of this link has my ID (blogstashcom-20) in it.
Another important element in this code is the ASIN (Amazon Standard Item Number). This number (for book, this number is the same as their ISBN (International Standard Book Number), basically identifies the product.
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So, you would basically take this link and added to your site (perhaps in a post where you review the book).
So, when someone clicks on this link from your site, he or she is directed to the Amazon where they can purchase the book. And if they do, since your ID shows you are the one sending this buyer to Amazon, your Amazon affiliate account gets credited with whatever amount the program pays for each sale.
How much do you get paid?
There is no specific number here. It completely depends on the merchant and the actual value of the item being sold. But, with all affiliate programs, you will have a chance to know exactly how much you will make for each sale you make.
Currently Amazon’s affiliate programs pay system is like this:
- If the person you send to Amazon buys the actual book you were promoting, you earn 15% of the sales price of the book.
- If the person you send to Amazon doesn’t buy the book you were promoting, but ends up buying another book or item, you still earn something, 5% of the sales price to be exact.
Does the buyer have to pay more for the product?
Mind you, this transaction between the merchant and affiliate, does not in any way affect the end price that the buyer pays for the product. It’s not like the buyer has to pay more for the product so the merchant can pay the affiliate. That’s not the case. The affiliate’s commission comes out of the merchant’s pocket and has nothing to do with how much the buyer ends up paying for the product.
Now, since it’s not practical for businesses to go out and find affiliates on their own, (and since not every business is as large as Amazon) most businesses these days use affiliate networks. Affiliate networks are basically the link between affiliates and merchants.
Affiliate networks make it easy for merchants and affiliate to find each other. Merchants sign up with networks, let them know the details of their affiliate program. Then affiliates sign up with the network and choose a product to promote.
Just like with Amazon, affiliate network also use a tracking system to track sales made by these affiliates. Some of the biggest and best affiliate networks include ClickBank and Commission Junction.
Affiliate programs are popular with both merchants and affiliates because they create a situation where everyone wins. Merchants get to promote their product all over the place with the help of affiliates, making more sales than they could ever make on their own. You make money as an affiliate promoting merchant’s products, and the buyer buys what he or she wanted. That is how affiliate programs work.