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The Players
Merchant
The merchant is responsible for:
- implementing a sales tracking system
- providing a selection of creatives such as banners or links which are used to drive traffic from the affiliate site to the merchant site
- attracting affiliates, monitoring and increasing results
- paying affiliates
Some (or all) of these functions may be outsourced.
Merchants may track perform their affiliate sales tracking and other functions in-house using an affiliate software program or they may choose to outsource some or all of these functions.
If you are a merchant and would like more information about setting up an affiliate program, visit the Share Results Merchant Solutions.
Affiliates
An affiliate is the salesperson (often a webmaster) in an affiliate marketing relationship.
The affiliate gives wider distribution to the affiliate merchant's products or services in return for compensation based on performance. The affiliate's source of distribution usually comes in the form of website traffic or email list subscribers.
Affiliates have traditionally been smaller sites run by individual webmasters and small businesses, but some large companies have integrated affiliate programs into their revenue mix. Some companies even participate as a merchant of their own program and as an affiliate of other programs.
Find out about the Share Results' affiliate solutions.
Benefits
Merchant
The largest benefit that a merchant obtains from running an affiliate program is the viral marketing that occurs around the clock without your direct involvement. Affiliates can:
- Increases new leads and sales
- Extend your advertising reach
- Enhance your search engine rank
You pay your affiliates a commission on the results that they deliver, therefore you are only paying for actual sales and your affiliates have a constant motivation to advertise your site.
Affiliates
- Opportunities for earning revenue are limitless
- Becoming an affiliate is free
- Most affiliate networks help you to market your website. After all if you succeed, they also succeed.
Affiliate Software
Affiliate software handles transaction tracking and reporting for both the affiliate and the merchant.
Merchants that use affiliate networks do not have to directly manage the affiliate software, although integration must occur between the merchant's site and affiliate network's software.
Merchants that run 100% in-house affiliate programs need to find--and possibly customize--affiliate software to handle transaction tracking and reporting. Solutions range from free and almost-free scripts to expensive software packages. Packages that are web based allow for upgrades to be performed without cumbersome software installations or downloads.
Affiliate Network
As merchants have rushed to build affiliate programs, an entirely new category has been born: affiliate networks. Running a network of affiliates requires quite a bit of time and energy and for that reason, many merchants are choosing to outsource their affiliate network.
Most companies don't have the resources to develop their own software and tracking mechanisms, so they outsource the management of affiliate programs to one of the many companies that specialize in such things. These companies tend to serve the ads and HTML and do all the tracking on their own servers so you don't have to worry about any in-house technology issues.
Merchant services can include basic services such as tracking, reporting, and payment processing or more comprehensive services such as affiliate recruiting, cutting checks, sending out end-of-year tax forms, and technical support.
The greatest benefit of an affiliate network for both affiliate and merchant is the access to a large base of affiliates.
Payout
In all cases, the goal is for marketers to only spend money when their particular performance objective is met. While Amazon only pays when a sale is made, merchants selling big ticket items like cars, or marketing services like credit cards, have modified the model, paying instead for clicks or qualified leads.
In fact, compensation schemes are as varied as the merchants themselves from a 15 percent commission on books, to 1 percent on computers. On the financial services side, one company offers up to $14 per qualified application while another offers $20 per enrolled cardholder.
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