What is Affiliate Marketing and How Does It Work?

Even if you’re not yet reaping the rewards of affiliate marketing, you’ve undoubtedly heard of it. That’s because, according to Forbes, the category is now responsible for more than 15% of e-commerce sales, putting it on par with email marketing and ahead of both social commerce and display advertising as a driver of e-commerce transactions. 

So, just what is affiliate marketing, and how does it work? And, is it right for you? In this blog, we answer your burning questions!

What is Affiliate Marketing?

To describe affiliate marketing in a nutshell, we haven’t found a more concise explanation than this one offered by Pat Flynn, the founder of Smart Passive Income (SPI):

Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others, and earn a piece of the profit for each sale that you make.

The concept of affiliate marketing is based on revenue sharing. If you have a product and want to earn more, you can promote complementary products or services of another company that will, in turn, pay you for your referrals. It’s really that simple! Of course, Affiliate Marketing for Dummies is always available online, but it’s probably not necessary!

Affiliate Marketing for Beginners: Commission Structures

Affiliate marketing begins with an affiliate program. Affiliate programs can be structured in a number of ways. However, most programs involve a company providing their affiliate partners with a unique trackable code that can be shared with their customers and clients. Each time the code is used to make a purchase, the affiliate is rewarded. 

The two most common commission structures for affiliate programs are:

1. Purchase-Based Commission Structures. The affiliate partner gets paid when someone uses their code to make a purchase on the merchant’s website.
2. Traffic-Based Commission Structures. The affiliate partner gets a commission based on the number of people they refer to the company’s website—regardless of whether those visitors make a purchase or perform some other action.

Becoming an affiliate is generally east to do, involving nothing more than filling out an online form and then promoting the company you’ve signed up with. 

Top 3 Benefits of Affiliate Marketing

Joining an affiliate program is a win/win proposition. You earn money, and your referrals get connected to a reputable product or service. Let’s dive a little deeper. An affiliate program helps you to:

• Earn a lot by doing very little. Joining an affiliate program is one of the easiest ways to create a new revenue stream without having to invest in new products, services, or distribution channels. It’s called “passive income” because you receive rewards while barely lifting a finger! Many companies with affiliate programs even offer free marketing support to further help you along.
• Improve business growth. Opening up new revenue sources for your business gives you additional capital that you can invest back into your company to gain a competitive advantage over others while offsetting growth costs.
• Provide more value to your customers. If your customers need a product or service that you don’t offer, they’ll look elsewhere (maybe even to your competitors). Through affiliate marketing, you can refer them to your affiliated company, fulfilling their needs and earning money in the process. 

Benefits of The Fulfillment Lab's Affiliate Program

Today, more than 80% of brands leverage the power of affiliate marketing. This is a number that will continue to increase as affiliate marketing grows in popularity throughout the United States. If you’re considering becoming an affiliate partner, you should look into partnering with The Fulfillment Lab. Simply sign up online, and become part of our mass volume profit-sharing program, earning a piece of the pie with every item your referrals ship with us. 

Ready to get started? Let’s do this together!