Affiliate programs were developed in the mid 90s by Amazon.com. Within a few years, the company had hundreds of thousands of affiliates. The success is probably due in part to the fact that affiliate programs work in an efficient and easy manner.
The best thing about affiliate program is that they are free. Usually webmasters with site content affiliated with the product a web company sells would want to sign up as an affiliate of that company. There is no charge to join the affiliate program, so it is a winning situation.
The affiliates are given hyperlinks to the website. These are usually banners displaying logs, buttons, text, or basic links. They strategically place the hyperlinks on their own sites where appropriate. This enables website viewers to click on affiliate sites and view the affiliates products and often make purchases.
Most affiliates have agreements with the other company. Under this agreement, they bargain that if the visitor buys something at the neighboring site because of clicking on that hyperlink and being redirected, the affiliate is given a percentage of the sale price as a small commission. These percentages are different depending on the company. They can be as low as 5 % or as high as 50 % of the sale price.
The good news is that there is no limit to how many affiliate programs you can belong to. As long as you can keep track of them, and as long as they make coordinate with the theme of your business, it is beneficial to have many affiliates.
For example, if you own a furniture company, you may have affiliates who sell wall hangings, candles, or other d?cor. In addition to the revenue you generate for your business, you could actually be profiting from referrals through your affiliate program. Each time your customer bought a picture to hang on the wall, youd be pocketing a percentage of the sale.
For this reason, it is a winning situation for the business owner as well as the affiliate. Although the business owner is required to pay a commission, keep in mind that he is paying a commission on a sale he would not have made if not for the affiliate referral.
Because of the high volume of affiliate programs, now there are online service providers who act as third party brokers. The affiliate and merchants can register with these companies and link up through them. The brokers oversee all aspects of the partnership and in turn receive a small percentage of each sale. This type of service is, of course optional. However, some people feel the extra expense is worth the minimized hassle.
Based on the recent success of affiliate programs, its easy to see why some people are calling these programs the most powerful marketing tools online.