A Basic Overview of Affiliate Marketing

Affiliate marketing can sometimes get interchanged with Internet marketing but technically they’re different. Put simply, all affiliate marketing that’s done online is Internet marketing but not all Internet marketing is affiliate marketing.

Internet marketing is basically the marketing of products and services over the Internet. There are many forms of Internet marketing aside from promoting products online for a commission which is the basic model of affiliate marketing. Let’s just say that if you make money online then that is Internet marketing.

There are tons of companies ranging from huge corporations to small businesses that are putting up advertisements online. When people click on these ads and buy something, they have done their job of increasing their profits. What we’re going to focus on is the concept of affiliate marketing.

What is Affiliate Marketing?

Imagine this little scenario: I’m your friend and I sell drum sets at $1,000 each. I know that you have many friends and most of them loves to play but they don’t have their own drum sets. So I come to you and say… “Hey, I will give you $300 if you tell your friends to buy their drum sets from me”.

So you say… Are you serious? You’re going to give me $300 JUST to tell my friends to buy their drum sets from you? Meaning… if I get one friend to buy a drum set… I’ll get $300? Count me in! I’m going to tell all of my friends!

At this point… you tell all your friends and they’re buying up the drum sets… you start collecting $300 every single time… But sooner or later you’re going to run out of friends to sell to. You then thought of marketing the drum sets to other people. Now you buy a small ad space on your local magazine that says…

“High Quality Drum Sets For Only $1,000. Limited Stocks Left. Call 1-800-DRUMSRUS For More Information”

Your phone is going to start ringing and you direct those hungry customers to me. You make a note of telling me that these calls are coming from you. Let’s say you paid $600 for the ad and now you have a simple work from home business model! Now you know that you only have to sell 2 drum sets to recover the ad’s cost… and everything after that is pure profit.

Maybe after a week or two I would give you a big fat commission of $6,000 because of the many customers that you drove right through my business.

It’s a win-win situation for both of us and that is what we call Affiliate Marketing.