How do Affiliate Programs work?
What Are Affiliate Programs?
Simply put, affiliate programs, also called associate programs, are arrangements in which an online merchant Web site pays the affiliate Web sites a commission to send them traffic. These affiliate Web sites post links to the merchant site and are paid according to a particular agreement. This agreement is usually based on the number of people the affiliate sends to the merchant's site or the number of people they send who buy something or perform some other action. Some arrangements pay according to the number of people who visit the page containing their merchant site's banner advertisement. Basically, if a link on an affiliate site brings the merchant site traffic or money, the merchant site pays the affiliate site according to their agreement. Recruiting affiliates is an excellent way to sell products online, but it can also be a cheap and effective marketing strategy; it's a good way to get the word out about your site.
There are at least three parties in an affiliate program transaction:
- The customer
- The affiliate site
- The merchant site
Affiliate Program Payment Arrangements
There are three basic types of affiliate program payment arrangements:
- Pay-per-sale (also called cost-per-sale): Vestpak-usafe.com's affiliate program is an example of a pay-per-sale arrangement. In this arrangement, the merchant site pays an affiliate when the affiliate sends them a customer who purchases something. Some merchant Web sites, like Vestpak-usafe.com, pay the affiliate a percentage of the sale and others pay a fixed amount per sale.
- Pay-per-click (cost-per-click): In these programs, the merchant site pays the affiliate based on the number of visitors who click on the link to come to the merchant's site. They don't have to buy anything, and it doesn't matter to the affiliate what a visitor does once he gets to the merchant's site.
- Pay-per-lead (cost-per-lead): Companies with these programs pay their affiliates based on the number of visitors they refer who sign up as leads. This simply means the visitor fills out some requested information at the merchant site, which the merchant site may use as a sales lead or sell to another company as a sales lead.
How does it work?
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