What Are Affiliate Networks?
Affiliate networks are online market hubs that facilitate business between Internet merchants and publishers. Internet merchants post their products or services on affiliate networks and offer a certain commission on sale or a fixed fee per lead to any publisher who would like to sell or promote the merchants products on their (the publishers) website. Commission Junction is one of the largest, and also the best around. Linkshare is another such prominent affiliate network.
Internet merchants and advertisers that register with them pay the affiliate publisher based on their performance – ie, on sale or on a per lead basis. These arrangements facilitated by affiliate networks works well for both merchants as well as publishers alike because:
i) The merchant can only increase his sales when a publisher promotes his products;
ii) The merchant pays only when his product is sold, or when a lead is generated
iii) The publisher is under no pressure to perform, and when he generates a sale, he ends up with a cool commission without having to sweat for it.
In essence, ones such as Commission Junction go a long way in enabling tremendous volumes of Internet commerce because they offer a low-risk, high-reward business opportunity to both merchants and publishers.
How affiliate networks work
As stated above, merchants register at the affiliate network and offer a certain commission or fee for their products or services. Publishers, who too have to register with them, then browse the offers and then pick and choose one or several offers depending on their websites focus.
When a publisher accepts a merchants terms, a link (code) is given to him by the affiliate network, which he has to publish on his website, or in his emails if he is an email marketer. Now, when a visitor on the publishers website clicks on the merchants code and buys or opts-in, then the code automatically tracks the sale or lead and credits the publishers account with the commission or fee.
How do affiliate networks make money?
They act as a marketplace for merchants and publishers; plus they program and distribute the code that has to be placed on the publishers website and then they track and monitor the sales and collect and pay out money. For all this activity, they collect a transaction fee from the merchants, based on the payout rate fixed.
If you want to set up an e-commerce website and do not have a product to sell, then you need to consider joining one and then choose your product from the thousands of offers available. Networks such as Commission Junction and Linkshare feature quality branded products. If you are looking to sell an information product (e-book), then you can join Clinkbank, which is an exclusive information product affiliate network. Good luck!