What is Affiliate Marketing?

Affiliate marketing is a way of marketing in which the business selling products uses a number of unconnected people to help sell its products usually in return for a commission.

There are therefore 2 different entities involved in affiliate marketing.

  1. The business selling the product or service.
  2. The marketer who promotes the business’s product or service on a commission basis.

Before the internet, affiliate marketing had a fairly bad name not least when it was associated with multi-level marketing. However, many businesses were in effect affiliate marketers when they acted as agents for other businesses. For example, I worked once for a company in the UK which had agents in many other countries round the world that promoted our products into their local markets. The company I worked for didn’t pay these agents any money. Instead it “sold” them products at a large discount whenever they got a made a local sale and the agent then passed the goods onto the end user at the full market price. This effectively means that they earned a commission from the sale and this business model is extremely widespread. They were in fact acting as affiliate marketers: they acted as a commission-only sales channel.

The internet has put affiliate marketing on steroids because tracking technologies allow businesses to set up affiliate links for an army of affiliates and track any sales made by an affiliate automatically. It has even enabled the automatic recruitment of an affiliate sales force.