An affiliate marketing business is an online venture that allows you to earn a commission for sending paying customers ( website visitors ) to other online merchants. To put in a simple way, affiliate marketing is essentially an arrangement made by you and another online affiliate who has a product or service to sell.
Affiliate marketing is basically done by creating a website that drives people ( your visitors ) to the website of a merchant. If the visitor actually makes a purchase through your affiliate link, you will receive a percentage of the sale.
It’s a simple concept, really, and one that almost anyone can do if he is willing to learn how. Once the initial research is done and the website is in place, your affiliate marketing business will begin to generate passive income for you. The potential for creating passive income makes an affiliate marketing business one of the most attractive and lucrative online businesses.
With an affiliate marketing business, conversions, not customers are actually what earn you money. And ironically, your conversions are actually someone else’s customers. When a person is converted from a visitor on a website to a paying customer thru your affiliate link, you earn a commission. Conversions are measured in percentages. If 7 out of every 100 visitors become paying customers, the conversion rate for that product is 7%.
Of course, its your website’s job to make the product as appealing as possible so that the visitor will be driven to the merchant’s site and converted to a paying customer.
Starting an affiliate marketing business requires little money, and it is not an expensive venture to run. You will need a hosting account for your website, and a domain name. This may run you about $20 per month.
Setting up your affiliate marketing business will require specific technical, marketing, and even some writing skills. However, these are all jobs that can be learned or can be outsourced. You must do some careful research to determine who you’ll want to affiliate with. Choose a product or service that:
- Compliments your own business
- You are knowledgeable about
- You can promote with passion
- Is successfully marketed
- Has a conversion rate of 5% or better
You will also want to look for an affiliate program that offers recurring commissions that compound each month as you increase the traffic.
Pros – In an affiliate marketing business, you will likely enjoy following benefits:
- Very little startup cost
- You can eventually generate passive income
- You can outsource some of the more challenging work.
Cons: There are some disadvantages as well, such as:
- Initial set up takes time and skill
- Generating a regular income takes time and patience
- Requires skills that you must either learn to do or pay someone to do it for you.