I have recently been working with an affilate company, called Pennymix, to revamp their site. Having worked in the web industry for some time I was familiar with the whole concept but hadn't been directly involved.
The concept is very simple really, a web site (probably ecommerce) will pay affiliate web sites for sending them traffic. Why? I here you ask.
Well the web is a massive place and someone like Amazon (Don't worry if you are a little smaller than the big A this still applies) can never expect to reach the top position for every product they sell. In fact if you look at the web today, it is mainly the review and user generated content sites that reach the top. It therefore makes sense, rather than spending money on search engine marketing, to share some of your margin with those at the top. It will probably cost you less in the long run.
Plus it is not just one link to a product from one site, it could be hundreds of links from many sites. Similar to having a high street presence in every city... well in the world.
The really interesting part about Pennymix, is that it will pay you money back for clicking through the to ecommerce sites and making a purchase. What, what, what??? exactly. Well the margins are just cut further. Pennymix now takes some of the money it earns and gives it back to you for using its site as the launch pad into the retailer. Everyone wins so to speak. The retailer sells, Pennymix gets paid and you earn cash back on your shopping. Affiliate heaven.
This isn't limited to the big boys (sorry persons), small retailers can provide an affiliate application form on their site. You may need to make it worth their while but it starts your expansion on to every high street in the world....
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