Affiliate Marketing is an awesome online business model! Without it there would not be many genuine ways of earning money online. But why would Companies use Affiliate Marketing, why would Amazon choose to outsource its marketing to bloggers?
In this article, we will be describing exactly what the benefits are to companies like Amazon and how it totally benefits us as affiliate marketers. If you have still been looking for an answer to why Affiliate Marketing is a great starting point for beginners, I will also answer that too with how you can get started as well.
What is Affiliate Marketing?
Before we crack on discussing why companies use affiliate marketing, let’s just clarify our understanding of how it really works.
Affiliate Marketing works by allowing people to promote products and services and receiving a commission on any sale made. You join an affiliate program and you get access to a company’s library of products. You write an article or record a video of that product and included in that article is a link to the company’s website and that product.
If someone visits your blog or website and like what you have put, they will follow your link to that product. If they buy it, you earn a commission for the introduction. It is a lot more widespread than you might think and is a great work from home model and it definitely benefits the company too.
In fact, Amazon started using the model and has continued to use it ever since.
Amazon Started the Ball Rolling
When Amazon first started out, it was just a small bookstore. They didn’t have the kind of budget to go out and place adverts everywhere. That would cost money, without any guaranteed sales. So, they introduced a referral program, where when someone who used Amazon introduced another person to buy a book from Amazon. They would receive a percentage of the book price as a reward.
From the user of Amazon’s point of view, they could earn money by introducing friends and others to Amazon.
From Amazon’s point of view, they only spent money from a guaranteed sale. The percentage would come out of the profit, but they were saving a fortune on marketing their products and brand.
Now, when you look at Amazon and the product range, there are a couple of things that come to mind.
One, is Amazon used this model to great affect and is still using it today!
Two, The sheer opportunity out there for Affiliate Marketers or Potential Affiliate Marketers!!
Why Do Companies use Affiliate Marketing – the Key Benefits
When we start looking at the key benefits of why companies use Affiliate Marketing the biggest one is the cost of marketing is vastly reduced. Even small companies can still benefit from getting their products promoted without having to spend money on marketing campaigns that will not necessarily work. They will only pay for a guaranteed sale.
More and more companies have adopted this form of marketing, purely down to this reason.
The other key benefit is highly related to the first one. If you think of the power of word of mouth and a recommendation from someone you know or trust, this is a powerful one.
But you might see an advert and not really understand what they are marketing. The company has paid for this ad, but they are not getting a great cut through. But what, if they started to learn a little more and want to investigate brand and/or product.
The first thing most do, is go on Google and do a search for a review or information on that product or brand.
Where do you think they end up at? Typically, a blogger who has done the research and can provide help and advice to that searcher and provided you with a helpful website, which you found on Google.
It is a whole cycle that leads that person to potentially buying that product and both all 3 parties are happy.
- The customer has the product they wanted, because they understood it thoroughly (thanks to the blogger)
- The Company has made a sale
- The Blogger (Affiliate Marketer) has helped the customer and made a commission on the sale.
The other factor for Companies, is the ease of being able to track affiliate marketing. They allow you to sign up to an affiliate program, Amazon’s is called Amazon Associates. You can get a unique ID that is embedded in a link.
When you share a product on Amazon, there is a digital signature in that link that says, “It was you, who introduced the buyer”.
So, all Amazon needs to do is track that link and the sale and pay you on a monthly basis.
It isn’t complicated at all, and again it is saving the company millions on advertising costs.
Let’s touch on how does this benefit an Affiliate Marketer?
Why Does This Benefit an Affiliate Marketer
Whilst affiliate marketing takes a lot of hard work to get up and running, once it is starting to earn you money it is a truly passive income. You do not need to be there to monitor the sale, you do not need to deal with customer service if the product is faulty, etc.
All of this will be dealt with by the merchant. You might write a thorough review on a product available on Amazon and that one article could be getting you regular sales, whilst you are working on something else.
So the benefits of this system are that you get to benefit from promoting products and getting a slice of the profits, without much hassle.
Don’t get me wrong, there is a lot of hard work involved to get to a truly passive income stream from affiliate marketing.
But as Amazon’s product range shows, you can literally choose an of your hobbies or interests and start a profitable online business. You will be writing, and review stuff related to something you are already interested in, which is great.
You don’t have to pick something because you think it will work. You will get bored and the opportunity will dry up.
The only way you will benefit from this model and make it work to be profitable is by picking a niche where you can truly say you are passionate about the subject matter.
It would be like me picking knitwear, I haven’t got a clue about it. Did not enjoy it at school and I don’t think I could actually write an article about knitwear. Why would I choose it?
I see affiliate marketers go for shiny objects like smart technology. Smart tech is a big growing industry and more people are researching it and starting a niche website in it. But whilst they see it as a profitable niche. They have no idea about the tech, and it shows in their articles.
People are looking for help but are coming up against a brick wall when they reach their websites.
Yet, the affiliate marketers are wondering why they are not making any money.
Seriously, pick a niche where you could talk to someone all day about it and that is a great starting point…
Why is Affiliate Marketing a Great Starting Point for Beginners?
The main reasons I say this is because, it doesn’t involve any complicated systems. You don’t need to be an expect in websites or coding, your can learn everything you need and regardless of your age, skill or knowledge of computers you can achieve great successes with it.
All you need is a willingness to learn and a drive to implement what you learn with clear expectations about timescales!
How Can you Get Started with Affiliate Marketing?
There are truly benefits to both the companies that choose to use Affiliate Marketing and the Affiliate Marketers themselves. All you need to ask yourself is, when are you going to get started.
If you think you have what it takes to get started with an Affiliate Marketing business, you can learn everything you need to know with a great training platform like Wealthy Affiliate.
But I would stress at this point, that this is not an easy road and it is not for everyone. You will not start earning money straightaway from affiliate marketing and I mean it could take months to start to see a return on the time you have invested.
I know that is not what you probably want to hear. But that is because you have probably been used to an hourly rate style pay system. You complete an hour’s worth of work and get paid for an hour’s work.
But that is not how this works. Having said that, you need to look at the earning potential differently.
All of the time and effort you put in at the early stages of the business will earn you money, but not straightaway. Let’s us an example of a product review that you write for your niche website.
You will have spent time researching it, writing it and publishing it and you will have earned no money from it.
But, then a couple of months down the line it starts converting for you. That one converting review will convert again, and again. To a point where you are earning money on that review.
People are truly earning full-time income wages from affiliate marketing, but you need to play the waiting game.
If you are ready to start thinking like a business owner and putting in the time and effort now, then you will definitely see the results further down the line.
My advice at this point is do not play at it and get the right training and support. There is a lot to factor in to ensure the foundations of your online business are right. Our top recommended training program is Wealthy Affiliate.
Here is my Wealthy Affiliate Review, for you to check out and read. But their training is the reason why Gem and I run an online business from home, and it can definitely help you out.
If you feel like you are ready to start your own affiliate marketing business, then you can always try their free starter membership. No catch, and no credit card required. You will gain access to 10 free lessons and 2 free websites and you can start to realise your affiliate marketing business.
Thanks for checking out my guide on why do companies use affiliate marketing. If you have any questions then please write them in the comments below. Share your experiences or just say hello and we will get back to you as soon as we can.
All the best, John
20 thoughts on “Why do Companies use Affiliate Marketing? Plus, its Benefits to an Affiliate Marketer!”
Great post and good info.
I think that affiliate marketeers wil always exist, and the reason is simple, and like you’ve mentioned.
It is cheap for them, instead of buying ads or commercial sports that can cost loads of money, they pay a commission to an Influencer of an affiliate marketer, you choose what to do.
I do them both actually, but again, you decide.
Anyway, you explained it very well and I’m confident this will help people to understand it.
thanks for your comments – affiliate marketing is a very beneficial relationship for both the affiliate and the company.
I love the post, it is so important to share this type of information. When people first start on the online business they get easily overwhelmed by all the tools, strategies. competition and to have someone explaining how everything works is a great plus. I have signed up recently with Wealthy Affiliate and I believe they are the best company I have ever come across and am truly happy with all the things I learned since the day I began with them
I wish you all the best in your Wealthy Affiliate journey – follow the training and stick to it and you will achieve!
all the best
This article is very easy to follow and explains in great detail the why and how of affiliate marketing. I agree that the best way to sell something is by selling something that someone wants and is already looking for it. That’s what affiliate marketing helps you do so easily.
Then the next question is how and I thank you for doing such a great job explaining how anyone can get started on that path.
Thanks Carmen & Ben,
Helping is the key to affiliate marketing. You need to understand where you are targeting, where are they in the customer purchase lifecycle and provide helpful guides and reviews for them to come to a conclusion.
All the best
Well I have tried many things ie MLM and to say the least, there is no comparison affiliate market is way more better. When you are doing affiliate marketing you can deal with more than merchant deal with more than one products and have more than one stream of income so who can beat that affiliate marketing is the best
it definitely opens up a lot of avenues. Affiliate Networks Merchants on their own there is tons of affiliate programs out there and that is just the beginning of the opportunity!
Affiliate marketing isn’t like pyramid schemes, let’s face it. No one suffers or gets taken advantage of. It’s win-win. Customers need advice, and they love to have it presented to them without having to search for it, companies love sales and are happy to pay for advertising and recommendations. Affiliates provide the middle ground. Websites that introduce buyers with sellers are providing a much needed service. Well done on a great post 🙂
That is a great summary of affiliate marketing Jyl, it is a simple premise – but that leads people to believe it is easy to implement.
Oh, I wish I would have seen this post on December when I was trying to search information about affiliate marketing! This would have saved so much of my time!
You have done a great job with writing, so everyone will understand what affiliate marketing is all about. This was really interesting and easy to read 🙂 so thank you for sharing this article!
I highly recommend Wealthy Affiliate too!
we try to help as many people as we can and spread the word about genuine opportunities like Wealthy Affiliate.
all the best
I love the fact that affiliate works out for all parties that are involved.
I am curious why some affiliate programs will kick their affiliates out of their program for no sales? Considering that the affiliates only get paid if they help generate sales. Doesn’t it cost the company money to have affiliates in their system?
There must be an element of clogging up databases at some point. There are a lot of affiliate marketers who do not go past month 3, and if the companies get these guys on the books – there must be an admin cost somewhere.
Amazon admits the sheer volume of people applying for their program, there is an admin cost there to check people into the system. So it does makes sense that if you do not get qualifying scales there will take you off.
But smaller companies are a little more lenient.
This is a wonderful post. Using an affiliate marketer has been one of the best ways for a company to introduce its product to its consumer. WA has proven over the years to be one of the best. All parties which involve the company, WA and the consumer are both happy because it’s a win win situation for everyone.
it is a great way to introduce products from smaller companies with a smaller budget.
In my opinion Businesses can be enticed to use affiliate marketing implementation strategies in order to outsource some of their marketing costs, which they simply pay for the cost of the sale, and pay only when the sale is made. this to business owners is of great advantage because they spend less to make sales.
It is a union between affiliate marketers and companies that is really beneficial to both parties and the growth of affiliate marketing is really high. Yet, there is more opportunity than ever.
thanks for reading my post
Affiliate marketing is excellent way to generate more sales both for company and affiliate marketer. Company like Amazon is the best example what affiliate marketing can do for a company. I think there are misconceptions about future of affiliate marketing that it will die but I think it is thriving like every year.
Thanks for your comments. I agree with you. I think it is only going to grow, it is the most cost effective marketing online for Companies.