The basics of affiliate programs, what they are and how they work.
Affiliate programs (also known as referral programs or partnership programs) offer a way to harness the traffic coming to your website to generate revenue, without the complication and expense of selling anything yourself. Instead, you earn a commission for producing a transaction. What constitutes a “transaction” and how much it’s worth will vary with each affiliate program.
Affiliate programs are generally offered by sites selling goods or services, although some affiliate programs reward other types of transaction such as getting a visitor to sign up for a free newsletter, or download a screensaver.
Many affiliate programs pay a commission based on a percentage of the revenue generated by purchases made by visitors coming from your website.
Some affiliate programs pay per lead rather than per sale – in other words, you bring them a prospective customer and they pay a fixed “finder’s fee” for the chance to market to that customer. This is a typical arrangement for affiliate programs in the insurance and credit card industries, for example.
There are other payment models as well, for example a (small) payment for every visitor sent to a site or a payment for every time an advertising unit (typically a banner or pop-up/pop-under ad) is displayed. Such affiliate programs pay regardless of whether a visitor ultimately becomes a customer.
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