Affiliate marketing is a performance-based marketing strategy where individuals or companies (affiliates) promote products or services from other businesses (merchants) and earn a commission for each sale or action generated through their efforts.

How It Works:

Affiliates Sign Up: Affiliates join a program offered by a business and receive a unique tracking link.

Promotion: Affiliates promote the merchant’s products via websites, social media, or email campaigns.

Tracking: When a customer clicks on the affiliate’s link and completes a purchase, the sale is tracked.

Commission: The affiliate earns a pre-determined commission based on the sale.

Key Elements:

Merchant: The business providing products or services.
Affiliate: The promoter who earns commission through sales.

Affiliate Network: The platform that connects affiliates and merchants, providing tracking and payment tools (e.g., ShareASale, CJ Affiliate).
Customer: The end consumer who purchases the product via the affiliate’s link.

Benefits:

For Affiliates: Low upfront investment and potential for passive income.
For Merchants: Increased exposure and sales with minimal risk, as they only pay when a sale occurs.
Types of Commission Structures:
Pay-Per-Sale (PPS): Affiliates earn a percentage of the sale.
Pay-Per-Click (PPC): Affiliates earn based on clicks, regardless of sales.
Pay-Per-Lead (PPL): Affiliates earn when users complete an action (e.g., sign-ups).
Affiliate marketing can be an effective strategy for both marketers and businesses to drive revenue through performance-based partnerships.