Affiliate Marketing is promoting other people’s (Company’s) product and earning a commission in return (If a sale is made).
There are basically 3 entities involved in affiliate marketing:
1. The Merchant: Merchant is the one who wants to sell his services or products online through his website.
2. The Affiliates: Affiliate is the one who is promoting the services and products of merchant though his own website.
3. The Customers: Online visitors who are looking for products or services offered by merchant
In this arrangement, the merchant site pays an affiliate when the affiliate sends them a customer who purchases something. Some merchant Web sites, like Amazon.com, pay the affiliate a percentage of the sale and others pay a fixed amount per sale.
In these programs, the merchant site pays the affiliate based on the number of visitors who click on the link on the affiliate website 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.
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.
There are various models of offering affiliation opportunities by any merchant. The most popular of them are:
This is the oldest and well proven model of affiliate marketing where an affiliate places a banner or text links that explains the products of services offered by the merchant website. When a visitor clicks on such banner or link, he is forwarded to the merchant’s website where he can find more details on product/services and even can buy it. In such model, the affiliate is paid as per the agreed upon affiliation program.
Some merchant prefer to set up multiple affiliate storefronts for various reasons like promoting specific product line, by region for language and currency differences etc. Such storefronts are optimized for efficient selling to a specific audience. Here affiliates can quickly setup their niche storefront without any physical inventory and promote the products though their website. When a user selects a product for purchase he is directed to the merchant’s website for payment. In the typical scenario, the merchant website will handle all the sales.
Promoting affiliate products through email is known to convert well, if done the right way.
Some merchants even offer multi-tier affiliate model that distribute commission into a hierarchical affiliate network. This means that when an affiliate makes a sale or referral it will earn commission not only on the sale or referral it makes but also on the sale or referral anyone in its downlink makes.
As per recent study the number of merchants that are running their e-commerce store over Magneto platform is increasing day by day. Magento is the most scalable and secure platform that offers inbuilt support for multi-domain and multi-store capabilities. To implement any of all of the above affiliate marketing models over Magneto platform is highly efficient and result oriented. Here is how:
If you need any assistance in setting up a good affiliate marketing program on your Magento store, please consult your requirements with one of our technical expert and get the help in deriving right implementation strategy to formulate your affiliate program.