Affiliate Marketing Definition

Affiliate marketing is a performance-based marketing strategy in which a business rewards affiliates for each successful purchase from a customer brought by the affiliates' own marketing efforts. If you are new to affiliate marketing, read our step-by-step guide for setting up an affiliate campaign here.

There are three sides of an actual affiliate equation: Product seller (merchant), Affiliate, and Customer. Both the merchant and affiliate benefit from the idea of sharing revenue. The merchant offers the affiliate a win-win relationship when the merchant can increase sales while the affiliate gets a reward in form of commission.

1. Merchant: Sometimes known as the seller, creator, vendor or retailer, etc. They are the ones who provide the product(s). From a solo entrepreneur to a big brand, anyone could be a merchant in the affiliate model. The purpose of a merchant when joining the Affiliate marketing model is to advertise their product to customers in order to increase revenue.

2. Affiliate: Also known as Publisher or Influencer. An affiliate could be a single person, an enterprise, a professional affiliate, a social media influencer, or a customer who made a purchase on the merchant's website. An affiliate's main role is to attract and show potential customers the value of the merchant's product.

There are various ways and channels in which affiliates can promote the merchant's website such as running ads and sharing posts on Social Media, using an embed link on their website, running an email marketing campaign, or seeding on a suitable forum,...

3. Customer: Customers are the key to every business, their activity decides the success of a business. Thanks to affiliate promotion activities, potential customers can approach the merchant's products easier. Orders made by customers through the affiliate's marketing action will become referral orders, which is the base to calculate the affiliate's commission.

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