To understand what an affiliate program is you have to understand affiliate marketing. Affiliate marketing is when a product creator allows partners (i.e. affiliates) to sell their product or service in exchange for a commission–incentivizing them to promote the product and produce sales in addition to the efforts of the product creator.
Affiliate marketing is one of the key ways many professional bloggers generate revenue. But there are two sides to the affiliate marketing coin–the side of the affiliates themselves who sell others’ products to turn a profit and that of the product creators.
You don’t really need to know anything else about affiliate marketing to start learning the ins and outs. All you really need to know is that you’re selling products for commission and getting a very good profit for each sale.
But that said, it’s always good to ensure you fully grasp a concept like this if you want to make the most from it possible. A question you might have then is: what’s in it for them? Why would a product creator be happy to give away more than half of the profits for what they’re selling?
The answer to this question is simple: it’s all about volume. Let’s imagine for a moment that you’ve created a product like an eBook. This is a digital product meaning there are no manufacturing costs, no delivery costs and no storage costs (which collectively is known as COGS – Cost Of Goods Sold). Each sale of this product is pure profit for the creator. They’ll then do their best to spread the word and to generate as many sales as they can, but there’s only so much they can do as just one person. They might make 100 sales a day but they could always still make more by getting marketers to sign up and help them sell.
Imagine how good it would be for them if they had a legion of marketers, all promoting and selling their product for them? Imagine the kind of profit they could generate then! Especially if those marketers were full-time marketers who knew all the ins and outs of successful marketing! So why offer such a high percentage? Simple: they want to attract as many affiliate marketers as possible and to lure them away from promoting other products and deals. They might lose 10% per sale by offering 60% instead of 50% but if that means they get one more marketer who sells an additional 300 items a year, then that’s still a much better scenario overall.
As you can see then, this is one of those rare business models where it genuinely offers a win-win situation for the marketers and the product creators. You’ll now be earning a huge 60% for each sale and they’ll be maximizing their income!
Of course it’s only going to be truly win/win all around if the people buying the products are happy too. So how do you ensure this? Simple: you make certain that whatever you are selling is genuinely high quality and is genuinely something that people want.
Now you’re providing value to the end user and to the product creator and you’re earning a lot of money doing it. This is the ideal scenario for any affiliate marketer.