A brief introduction to Affiliate Marketing

Introduction to Affiliate Marketing
This is the first of a series of articles i wrote about Affiliate Marketing and how to find and dominate a profitable Niche. Let’s start with a simple introduction to Affiliate Marketing.
Do not expect a lot from this articles; i’ll try to maintain as simple as is possible and explain the basic concepts, so they are aimed to a non expert audience.
Affiliate Marketing, as the term suggest is a Market, and like in every Markets there are at least three main actors;
The Vendor: a private or a company who sell its services or products;
The Buyer : who is going to purchase those service and products;
The Affiliate: Is an intermediary (read salesperson) that sell the Vendor’s product to the Buyer and receive a Commission for his selling activity.
What the advantages? For the Vendor the availability of a sales force otherwise impossible to hire thus covering a broad Market, for the Affiliate the commission fee covering the marketing and promotion efforts. Obviously for this mechanism to work commission should be adequate as no affiliate will really put a lot of effort into promoting a Product if the return is not good enough. So, in example, if you’re looking to market a new product that costs $149 per sale, and you pay your affiliates $0.50 per sale, well, you’e just not going to have that many affiliates,and that means low promotion and lower sales.
So, as an Affiliate, you should:
- join a MarketPlace
- find a good product to promote that has good commissions
- promote this product
- sell the product and earn.

Some of the best MarketPlaces for digital Products are:
ClickBank
PayDotCom
Commission Junction
Plimus

For Physical Goods:
Amazon.com
Ebay.com
ShareASale.com

There are several parameters to determine if a product is good to promote. These are some of the most relevant:
- Gravity: indicates the number of affiliates who have earned a commission by promoting a particular product (the higher the better). This parameters indicate that the product is converting well.
- Total$/Sale: Total$/Sale is a relevant indicator for who know how much is going to spend on promotion for each sale, so they can select only products whose Total$/Sale is higher than the advertising costs.
- Avg%/Sale: similar to the former, but in percentage. – % Referred: This is the percentage of a vendor’s sales that are referred by affiliates. A high Ratio indicates a well established Vendor with a wide affiliate base.
- Future $: This refers to subscription products, where Affiliate earn recurring revenue from a single sale.
So, as a rule of thumb, choose to promote products with high gravity and high Avg%/Sale.

Giorgio Veneri
Marketing Business Tools