What Is Affiliate Marketing? This is the explanation!
Of the many types of marketing, the best known today is affiliate marketing. In general, affiliate marketing is the use of affiliates to help sellers deliver a product or service to consumers.
One type of affiliate marketing that is currently on the rise is endorsing and paid promotion services. For clarity, in this article Glints will explain everything and how to get the most benefits through this method.
What Is Affiliate Marketing?
According to Pat Flynn of Smart Passive Income, affiliate marketing is the process of offering products or services using affiliates. Affiliates will be paid via two methods, prepayment or pay per product sold.
According to the well-known marketing company from the United States, CJ Affiliate, affiliate marketing is the process of promoting a product or service from three sides. The three sides are sellers, affiliates, and consumers.
Affiliate marketing is useful for sellers who are reluctant to do their marketing because it is too complicated. In the end, these conditions made them decide to use affiliate services to promote their products and bring in potential buyers.
One example is cosmetic products. It can be difficult to generate sales from the company’s marketing process alone. They need affiliates to offer their products to consumers according to their target market.
So, by offering products or services, affiliates will make a profit. Apart from getting products or services, they also don’t have to bother doing market analysis or research because of course, they understand the potential of their customers.
Consumers will also benefit. With affiliate marketing, consumers don’t need to try all the products or services on the market. They just need to see how affiliates try and review a product or service.
To put this simply, affiliate marketing is a strategy for sharing product marketing responsibility. Companies will use affiliate services that will help market their products to potential buyers. Affiliates will later benefit from the products sold.
Why is Affiliate Marketing Important?
Affiliate marketing first developed in the United States (US) in 1994. In the era of the internet industry, the development of this concept has become increasingly prevalent. In the US, expenses for affiliate marketing even reach 10.1% per year and this method is used by small scale product or service sellers.
So, why is this type of marketing now getting a lot of attention? Here’s the main reason.
1. Bring in steady sales
Consistent use of products by customers is the reason product or service sellers continue to do affiliate marketing. To keep a business stable, salespeople need stable marketing and sales. This concept is what makes affiliate marketing so important.
2. Low risk
Affiliate marketing offers a low-risk opportunity for business sellers who are just starting or are still on a small scale. The risks referred to include building a marketing strategy that is not necessarily successful or building a marketing team that is too large but the results are insignificant.
By using affiliate marketing, sellers of products or services can continue to market their products with minimal risk.
3. Minimizing marketing costs
What makes affiliate marketing ideal for businesses that are just starting or are still on a small scale is the low marketing costs. By simply deducting commissions for affiliates or even simply providing samples, your product or service will be known to the wider public.
What about the seller whose product or service is already great? Affiliate marketing is also required. However, it would be nice to stick to other marketing channels. The reason is, affiliate marketing is primarily aimed at maintaining stability, not increasing the number of sales of a product or service.
How to Do Affiliate Marketing
Choosing the right affiliates is the first way. This is important because the selection of affiliates is determined by the product or service being offered. Without thinking about this, it will be difficult for your product or service to reach potential buyers.
Some of the major e-commerce companies in Indonesia have affiliate marketing programs. Typically, these programs offer a commission of under 5%. This figure could be higher if the seller of the product or service using a small affiliate, where the commission could be as high as 15% per sale.
In some cases, sellers of a product or service can work with individuals. One example is the concept of endorsement and paid promotion on Instagram. Apart from being more private, offering it to individuals brings greater potential buyers.
According to Brian Edmondson of The Balance Small Business, a good affiliate marketing strategy is a must for product or service sellers who are new to implementing a marketing strategy. Ideally, they could get all the benefits, but of course, it’s difficult.
Brian suggests that product or service sellers limit their spending on affiliate marketing. He also recommends that they only choose two or three strategies and affiliates because it will be easier to evaluate, whether based on sales or other benefits, if there is a failure.
Before negotiating with an affiliate, it is best if the seller offers the product or service being sold. This is because we know what is being marketed while maintaining credibility. With in-depth knowledge, potential buyers will be more interested in trying.
While looking for affiliates, sellers of products or services need the right affiliate marketing strategy. There are several types, objectives, and market segments that differ from each strategy.
Types of Affiliates in Affiliate Marketing
Influencers are people who have the power to influence people’s buying decisions. With loyal followers, it is easy for them to direct consumers to the seller’s product through social media to other marketing networks.
Celebrities, experts in certain fields, or social media activists can be among the influencers who can be partnered with as your business affiliation.
Bloggers consist of various kinds, for example, blog writers to YouTubers. Bloggers excel at increasing sales conversions for a product or service. Usually, bloggers conduct trials on products or services and are followed by indirectly promotional reviews.
Usually, bloggers are more trusted than influencers. This is because they are known to have a special and deeper understanding of a product or service being promoted. For example, a culinary and food blogger. However, no research proves this hypothesis.
Next is the website, where some examples are websites that contain reviews of goods to e-commerce. These sites are usually specially designed to market a product that is still following the content they have created.
4. Mass media
The mass media is the last affiliate in affiliate marketing. Although it can bring in large numbers of potential buyers, the mass media is rather rarely chosen because it costs much more than the three affiliates mentioned earlier.
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