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.
There are three sides of an actual affiliate equation: Product seller (merchant), Affiliate and Customer. Both merchant and affiliate benefit from the idea of sharing revenue. The merchant offer the affiliate a win-win relationship when the merchant can increase sales while the affiliate gets the reward in form of commission.
1. The merchant: Sometimes known as seller, creator, vendor or retailer, etc. They are the one who provide the product. From a solo entrepreneur to a big brand, anyone could be a merchant in the affiliate model. The purpose of a merchant when joining 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 merchant's product.
There are various ways and channels which affiliates can promote merchant's website on such as running ads and sharing posts on Social Media, using an embed link on their website, running email marketing campaign or seeding on suitable forum,...
3. Customer: Customers are the key of every business, their activity decides the success of a business. Thanks to affiliate promotion activities, potential customers can approach merchant's product easier. Orders made by customer through affiliate's marketing action will become referral orders, which is the base to calculate affiliate's commission.