Use affiliate marketing to take advantage of the internet platform
Internet is a network. Therefore, as a platform, the Internet should lend itself to network-based marketing. It does, and the process is called affiliate marketing.
What is affiliate marketing? Let’s forget about the online world for a moment and imagine that we have a product to sell in our market. We may purchase or lease business premises and attract customers to our store to purchase the product. This will work well if all of our customers are concentrated in one geographic location or if we have deep enough pockets to open stores in many locations. What are our alternatives?
We may hire vendors to visit customers in an effort to sell the product. This would expand our reach rapidly, however it would still be quite expensive. People are not usually cheap. To avoid this, we may offer sellers a commission-only compensation structure so that we only pay the seller a proportion of the sales price once they make a sale. This would not require a large amount of startup capital and we would only pay for performance. This is the closest model to affiliate marketing.
Affiliate marketers, or affiliates as they are known, specialize in selling other people’s products on the Internet for a commission. Each affiliate invests their own capital to bring the product to market, often in their own unique way, and when they make a sale, they receive a commission.
There is a common theme in research that twenty percent of the sales team will make eighty percent of the sales for a particular product. Some people are very good at selling. In the affiliate world, these people are known as “master affiliates” and their services are in high demand. If I have a product to sell, I really want to attract some master affiliates if I can.
There may be more than one level of affiliate marketing. For example, you could be an affiliate selling widgets for company ABC and receive a sixty-five percent commission (that level of commission is not uncommon in affiliate marketing circles) and you could recruit other affiliates to sell the widget. same product for, say, fifty-five percent. commission. Therefore, you would earn ten percent of every sale they make. This is called a “two-tier” affiliate commission structure.
Now why would an affiliate marketer be prepared to take fifty five percent when they could be earning sixty five percent straight from the source? Because they benefit from the knowledge, support and experience of the affiliated master. It is in the best interest of Master Affiliates to help their Affiliates perform at the highest level possible, so they generally go to great lengths to pass on their knowledge and also provide resources for the Affiliate to perform. In a way, this is similar to multilevel marketing in the offline world.
So, in short, affiliate marketing is a network marketing concept that lends itself to networking (because the internet is a highly effective platform for networking). Affiliates invest their own capital, knowledge, experience and time in marketing products and when they make a sale they receive an agreed commission. The best affiliates are called master affiliates, and they often recruit their own affiliates in a two-tier model and then share commission on sales.
