An affiliate networker is an intermediary between publisher and merchants. Affiliate marketer is one who generates leads and sells services or product. Merchant is the one who created those services and products and has their affiliate programs.
Functions of affiliate network services provider include tracking, reporting, refund and payment processing, and affiliate management. Affiliate service provider usually has a large base of affiliate marketers or publishers. Since selling somebody’s product or services there is no customer service or order fulfillment involved which makes this work comparatively easy.
A central database of available affiliate programs is organized by network services into category and popularity that one can choose from. Also available are analytics, reporting tools and payment processing which can be chosen by simple registration platforms for the programs.
Affiliate marketers usually join affiliate networks for free, the merchant has to pay a fee to take part or involve in the network. The affiliate network charges a small initial setup fee for each merchant he affiliates for and a recurring membership fee mostly on monthly basis. Affiliate networks charge the merchants a cut in the commission that is paid to affiliates, commonly known as over-ride which is paid apart from affiliate’s commission. Even after paying these fee and commissions the merchant still benefits by joining these networks and it is worth every penny.
Several payout models are used by affiliate networks most common one being the cost per sale (CPS) or pay per sale and cost per action (CPA). We will discuss both this models in details here.
CPS (cost per sale) – It is a high profit, low risk, revenue sharing model which is used by marketers to attract huge numbers of customers towards their service or the product. In CPC model an affiliate marketer gets a set commission for the leads that is obtain from sales for the merchant. Merchants prefer CPS model because they have to pay affiliate after the sale is closed. It is in a sense free advertising and marketing since it is with the efforts of affiliate marketer that generates leads without any upfront cost to them. For bringing the customer to a point of purchase is difficult and time-consuming and hence CPS commissions are high.
CPA (cost per action) – In this model affiliates pays the marketer for specific action that he gets to generate leads or referral. The action can be impressions, clicks, sign-ups or form submits. Though CPA does not engage direct sale and involves more risk-taking. The payout percentage is far small as compared to CPS.
One way to earn high commission is to promote only high-end product launches. It needs a fine balancing act, hard work and only experienced networker should opt for this high-end product. Experienced, because he has a huge list of followers, a long email list, and knows ins and outs of SEO.
List building should be a top priority for any networker because it is the raw data which is collected over a period of time and is categorize and segregated according to the need and circumstances.
Few affiliate networks are Rakuten, Amazon Associates, CJ Affiliate, eBay, and Commission Factory.