Affiliate marketing, in short, is a performance-based promotion and sales approach that distributes an online retailer's product marketing to different people and organizations, letting the retailer achieve the most sales with the least risk. In this system, the party that drives a visitor to the site charges the retailer a small commission if the visitor purchases the product or service.
This system requires:
- A producer and seller,
- An affiliate marketer/advertiser, and
- A customer.
The seller can be an entrepreneur, a company, a manufacturer, a merchant, a developer, or a retailer. The product can be a physical product or a service.
The affiliate can be a person or company that can effectively present a given product or service to interested parties. They present a product's advertising links to an audience that could benefit from it, making the purchase decision easier. If the customer buys the product, the affiliate also receives a share of that sale.
The customer is the person who buys the product or service. They may not always know that the product they purchased was marketed through an affiliate model. Customers are usually informed about this at the discretion of the marketing affiliates.
Since affiliate marketing approaches are often made attractive with discounts and deals, customers almost never end up paying more for a product than they otherwise would. The customer pays the price they see, just as in any other purchase, and receives the product normally.
