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Ecwid Ecommerce Glossary

Affiliate Marketing

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What is affiliate marketing?

Affiliate marketing is a popular tactic to drive sales and generate significant online revenue in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts.

The industry has four core players:

  • the merchant (a “seller” or a “brand”)
  • the affiliate (usually a person or a service)
  • the customer (the final buyer)

How does affiliate marketing work?

The seller wants to sell the products, but they don’t know how to reach the audience. The affiliate knows and offers a seller their service to generate sales for an exchange of 5 percent of the complete order’s value. If both sides have a deal, the affiliate reaches out to the audience recommending the seller’s products. Those who buy become customers and the seller shares 5 percent of all generated sales with the affiliate.

To track the sales generated by the affiliates, the sellers usually use tracking tags or so-called “affiliate links.”

Is affiliate marketing profitable?

Absolutely. For both sellers and affiliates. The аffiliate marketing industry has grown 52 percent for the past 5 years. 81 percent of brands have adopted affiliate marketing.

5 reasons to start an affiliate marketing program

  • Save on start. You don’t need to invest money to start an affiliate marketing program. Just offer a significant share.
  • Grow brand awareness quickly. You will save time on growing the audience. Affiliates already have it.
  • Access to foreign markets. You don’t know the specifics of all markets. But affiliates know.
  • Large base of the affiliates. The industry is on the rise. You won’t spend much time finding a proper affiliate.
  • Acquire unknown skills. Affiliates have different tactics and skills. They are all at your service for a good reward.

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