Affiliate marketing is when a product owner allows other marketers to sell his product and receive a percentage of the sale. For example, if you have created an informational product that sells for $27 (for example my “How I Grew My Facebook Fan Page From 1 to 1026 Fans in 30 Days“) and you offer a 40% commission, affiliates would make $10.80 from each one they sell.
This is different from a pay per click program because an affiliate does not make any money from the product owner unless he sells something. In the offline world you could equate that to someone working on 100% commission instead of a salary.
Affiliate Marketing Allows You to Reach More People
Although it is hard to consider offering someone else 40% or more to sell your product when you could sell it yourself for 100%, there are good solid reasons to use affiliates. Number one is that the marketing net of many affiliates is much, much larger than your own net. Simply put, you cannot reach near the people by yourself that an army of affiliates can.
Think about it this way – your list is say, 2000 people and you have 10 affiliates with lists about the same size. At a 1% conversion rate you could sell to your own 20 people and make $540, OR you could sell through your affiliate’s lists giving them the 40% cut and still make $3240. A 2% conversion rate could mean $1080 or $6480 respectively.
Affiliate Partners Can Multiply Your Efforts
Keep in mind that marketing to a list is only one marketing strategy. There are other ways to market including article marketing, putting up Squidoo lenses, review blogs, or websites and using PPC. When would you have the time to tackle all the strategies that your affiliates use?
If you’re just getting started with product creation and affiliate marketing, you might want to list your product on ClickBank. They are not only a marketplace to showcase your product; they take care of handling orders and refunds, plus paying your affiliates their commissions. ClickBank is a well known place that affiliate marketers go to find products to promote. You can also try PayDotCom, which is similar except for a few differences – your first product listing is free, and paying the affiliates is your responsibility.
I think you can see that using affiliates to market your product is a great marketing strategy. That’s why all the big successful marketers use it. Have you ever noticed that they don’t just sell a product by themselves? They get their internet marketing buddies on board to sell it too. Why? Because it works!