Back to Basics in What Is Affiliate Marketing

Affiliate marketing involves making money (commissions) by promoting a company's products or services, which leads to a sale. The only way you can earn money is when a sale is made, just like a commission-only sales representative.

An affiliate marketer is someone who promotes the products of others. Through a partner network or an affiliate program, you earn commissions if the person ends up buying.

The revenue-sharing model is used. You can offer affiliates a financial incentive to promote your product if you want to sell more. If you don't have any product but you still want to earn money online then you can join affiliate marketing where you pick other's products and start promoting so that you can get a commission on every sale made by your link.

Wikipedia says that affiliate marketing involves four different parties: merchant, network, publisher, and customer.

In other definitions, 3 parties are mentioned instead of 4. These are Advertisers, publishers, and consumers

 In affiliate marketing, different parties create and market products, and then each party gets a share of the revenue based on their contribution.

A merchant:

A person who creates products or sells them. Also called a brand, retailer, or vendor. This is the party responsible for creating the product. The company might be a giant, such as Dyson, a vacuum cleaner manufacturer. The person selling the online courses may be a single individual like Mariah Coz.

The merchant behind an affiliate marketing program can be anyone, from solo entrepreneurs to Fortune 500 companies. Even if they aren't actively involved, they can still benefit from it. A product is all they need to sell.

The Affiliate:

Occasionally, this party is also called the publisher. Additionally, affiliates may range from a single individual to an entire organization.  There are hundreds of thousands of dollars in commissions an affiliate marketing business can generate each month.

This is where marketing takes place. The affiliate marketer promotes the merchant's product to potential customers and tries to convince them by showing its value so that they buy it.

You can do this by blogging about the product reviews of the merchant.

It could also be a whole site dedicated to finding cool affiliate products related to a particular product and promoting them. Example Gadgets360

The Consumer:

The customer or consumer is what makes the affiliate system go round. It is impossible to share revenue and commissions without sales.

The affiliate will market to customers through whatever medium they see fit, including social networks, digital billboards, and blogging using content marketing.

A great deal depends on the affiliate whether the consumer is aware that they are part of an affiliate marketing system or not.

Some affiliates disclose that their marketing is being rewarded financially, but others don't.

A tracking system is working background so if a customer made a purchase then he/she can follow the purchasing process without interruption and the affiliate still get revenue for this sale. As the cost of the affiliate network is already included in the retail price, the consumer will not typically pay a higher price to the affiliate marketer.

The Network:

The network portion of affiliate marketing is rarely considered.  However, I think an affiliate marketing guide should include networks because in many cases, networks act as an intermediary between affiliates and merchants.

You could technically promote an online course created by someone and share the revenue directly with them, but letting a network like Commission Junction or ClickBank handle the payment and delivery places a more serious note on affiliate marketing.

In some cases, affiliates need to go through an affiliate network to promote a product.  For example, this may occur if the merchant only manages their affiliate program on that network. 

As an affiliate network, the affiliate marketer then has access to many products, from which he or she can select which to promote.

If you are promoting consumer products, like tools, books, toys, or household goods, Amazon is by far the biggest affiliate network. With Amazon Associates, you can promote any product sold on their platform. Using the Amazon affiliate program, anyone can build their affiliate link. A small commission is earned when someone purchases through your link.

Assuming you do not wish to build an affiliate network, such as Commission Junction, there are two sides to the affiliate marketing equation that you can choose from. You can become a merchant and let others promote your product, by giving them a commission on sales they generate.

You could also become an affiliate marketer for a product or products you are interested in promoting and marketing to consumers to earn money. Almost everyone starts with affiliate marketing, and it is the easiest path to take, but building enough traffic to make meaningful income from affiliate sales aren't easy.