So as a beginner you want to know what is affiliate marketing as it is done as an online business. There are various definitions that one can learn from.
According to Wikipedia affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts.
According to Business Dictionary it is means of achieving greater market penetration through websites who specific groups of internet users.
According to Marketing Terms it is the revenue sharing between online advertisers/merchants and online publishers/sales people, whereby compensation is based on performance measures, typically in the form of sales, clicks, registrations, or a hybrid model.
A beginner’s definition
All these terms are correct and give a couple of the pieces of the puzzle about what affiliate marketing is all about. Think of it this way, sales people are always paid commissions for making sales. Becoming an affiliate is becoming a sales person. You then earn income from the sales that you make. But do not let the terms marketing or sales intimidate you if it does not come naturally to you.
Why become an affiliate?
Do you want to make income online but you are not a marketing or a sales person? Are you too shy to confront people to make a sale? Affiliate marketing is the thing for you. On the other hand, you may be a natural sales person and this will be just another walk in the park for you. It is simply an additional market place.
I am not a sales person. I feel guilty charging for even something that I have done. I am too shy to collect money that is due to me. I was always taught to be generous. But then I let it become too engrained such that I have often let myself be taken advantage of. So I often do work for free, or it becomes free due to the fact of my guilt. Then I discovered affiliate marketing.
Affiliate marketing is like having a franchise without all the huge upfront costs. You just have a virtual storefront in the form of a website where you promote the products through various means. When visitors want to buy the service or product you redirect them to the supplier and the supplier handles the rest. Once the sale is done, then you will be given your commission. It solves a lot of my selling and collection anxiety for me.
What is affiliate sales?
Affiliate sales happen when a visitor purchases a service or product that you as an affiliate, as a sales person has brought to the supplier. Once the purchase is paid for or approved, it is then recorded as a sale. Your commission is then calculated from the amount paid for that sale.
If the item was on a discount or special sale, your commission is calculate on the discount or sale price, not the regular price. It is calculated on the actual amount received.