How Affiliates Make Money Online
Affiliate marketing is probably the most popular kind of online marketing strategy used in today’s modern world. It is where affiliates make money online by simply promoting products by other people through commissions. As simple as it may seem, it is an online trade that is a bit more complex if you take a closer look.
How Affiliate Marketing Works in Layman’s Terms
On this particular form of online marketing, merchants pay their affiliate partners to help them promote the products they sell by means of commission. This where the affiliates use every online means they know to promote the products to people which is usually by sending people to an affiliate link. While on the link, people will decide whether to take action or not.
This is where the trade goes a bit complex with regards to the affiliates make money or not. We have to remember that the affiliates are paid on a performance basis and how they helped the merchants in getting what they want, whether in terms of sales or leads. To give you a better picture, take a look at the payment models below.
Pay-Per-Click (PPC) Affiliate Programs
When we say pay-per-click, it is payment system where a merchant pays affiliates for all generated clicks. It means regardless of what the people decide to do after clicking the affiliate link, a commission will be paid. Whether the click generated by the affiliate ended up to a sale or a lead, it will be considered as valid.
Pay-Per-Lead (PPL) Affiliate Programs
Pay-per-lead is a system where a merchant pays a fixed commission for a particular action a generated click resulted to. It means if the subscriber opted to to follow the action suggested on the affiliate link. This is an action that can be in various forms like signing-up, installing an app, submitting a form, completing a survey, etc. Affiliates won’t earn commissions for clicks that never resulted to an action.
Pay-Per-Sales (PPS) Affiliate Programs
In a pay-per-sale performance basis, a merchant pays a certain percentage of sales generated by the affiliate through the affiliate link. The percentage of generated sales are usually indicated on the agreement between the merchant and affiliate. As an example let’s take the Amazon Associates PPS program, one of the most popular programs today. Here, Amazon pays their affiliates up to 15% of the sales they generate depending on the item or product sold.
