In affiliate marketing, you are paid when you send sales or leads to a merchant who sells goods and services on the web. When you hear people talk about “pay-for-performance” marketing, this is the kind of thing they are talking about. You are paid a fee – usually a commission – for helping sell somebody else’s products or services
How Affiliate Marketing is Different
Let’s take a moment to see how affiliate marketing is dfferent from some other ways to make money, especially online.
Affiliate marketing is not MLM.
Even though MLM (Multi-Level Marketing) and Network Marketing companies pay you a commission on sales of their products — and they may even give you a website to market their products — they are NOT affiliate marketing. Unlike MLMs, you never have to pay to join a legitimate affiliate program.
In addition, you almost never have to purchase an affiliate product yourself, although that can certainly be helpful in getting to know the product. A few affiliate programs are “closed,” meaning that only those who have purchased the product are invited to promote it. Closed programs are usually for highly specialized products. But unlike MLM, you never have to build a “downline” of affiliates below you. Some affiliate programs are called “2-tier,” because they will reward you for bringing in new affiliates – called sub-affiliates – by paying you a tiny percentage of their sales.
But even in a 2-tier program, the 2nd level commission is usually quite small, and paid just on sub-affiliates you personally refer to the program. There is no recruitment of a “downline” with multiple tiers. Nor are you paid for merely referring sub-affiliates. It is only when they make sales that you are paid an additional commission.
Affiliate marketing is not selling YOUR products.
In affiliate marketing, you don’t develop, manufacture, or distribute our own products. Instead, you are promoting someone else’s product and sending the consumer on to the merchant to make the sale and deliver the product or service.
So unlike eBay, self-publishing a physical book or DVD, or building your own product in your basement or garage, you do not produce or ship any physical products. You also never keep any inventory on hand. All that is taken care of by the affiliate merchant.
Affiliate marketing does not involve customer service.
If you create your own product – whether it is a digital product like software or an ebook, or a physical product like a hat, toy, or DVD – you need to deal with customer questions, complaints, exchanges, and returns. In affiliate marketing, you never do this. The merchant is responsible for handling all customer inquiries and complaints.
Affiliate marketing does not tie you to one product or merchant.
When you sign up for an MLM or develop your own product, you are essentially “stuck” selling only those products. But with affiliate marketing, you can choose from thousands of merchants and hundreds of thousands of products. And with affiliate marketing, if you decide you don’t want to promote a particular merchant or product any longer, you are free to sign up with a different merchant and promote something else. In fact, many affiliates make a good living promoting dozens of different merchants and hundreds of different products, using multiple websites.
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