The Importance of Affiliate Marketing in Internet Business

For many years ever since we started manufacturing products for sale in the offline physical world, we had been having sales agents representing different manufacturers to help the latter to expand their markets. Their main focus had been to make the sale by getting the orders from the prospects and existing customers, which were then processed by the manufacturers or merchants.

In the Internet online world today we have affiliates instead of agents. Affiliates are highly targeted pay-for-performance sales agents.

There are also some forms of Internet advertising that rewards the affiliates for driving traffic to the advertiser i.e. the manufacturers or the affiliate program owners. The advertiser pays the affiliates to place a link on their website, and the affiliate sends traffic to the advertiser in return. In other words, it's about the affiliates receiving commissions for helping in making the sales.

Affiliates are being considered as a complementary but very important sales channel although the merchants themselves continue to get their own direct traffic in making their own sales.

The affiliates do not have to suffer from the occasional sleepless nights worrying about the processing of orders, packing and shipping etc because this are being taken care of by the merchants who usually have an effective tracking system to determine which affiliates drive which orders to them starting with the so-called affiliate links. These are the links that the affiliates put on their websites, newsletters, ezines or emails.

The most common affiliate link is embedded in the linking URL. For example, if you see a link like "http://www.abcmerchant.com/?xxxx=3456", you can be quite sure that the affiliate with the ID (identification) 3456 will receive money from ABC Merchant when someone places his order after clicking that link.

An excellent example of an affiliate program is that of Amazon.com who happens to have one of the oldest affiliate programs in the Internet. The main advantages of the affiliate marketing as a form of Internet advertisement and strategy are:

1. Low Investment Budget In affiliate marketing, you don't have to invest a lot financially to start pulling in profits. This eliminate the concern of many who are hesitant to venture into any home based businesses because of the lack of fund or the unwillingness to part with money due to uncertainties.

2. No Need For Inventories There is no need to keep and manage an inventory as this would be taken care of by the merchant.

3. Passive Income Through Leverage Strategy Many wealthy people earn their income through various leverage strategies which allow them to make money while they're sleeping, meddling with hobbies, or having vacation in far away places such as the beautiful beaches in Hawaii or Malaysia.

Affiliates could simply drive traffic to the merchants' websites without having to sweat after having provided them your ad copy and links.

4. Minimal Risk The main reason for most successful Internet marketer's extensive use of affiliate marketing is the low-risk nature of the program. This is especially attractive to those with low budget for advertising

5. Globalisation One is dealing with an unending global market place. All you have to do is study, research and select a niche product or service and prepare all the necessary marketing tools for your affiliates to direct traffic from just about anywhere around the world to your website.

6. Getting paid while you sleep This system allows you to recruit thousands of salesmen who are willing to work for you 24 hours a day and 7 days a week. You could switch your business to Autopilot mode so that you could continue to earn money whether you're awake, asleep or holidaying.

Most online businesses use affiliate marketing strategy to sell their products which could include physical products, software or e-books. Service industry can also benefit from an affiliate program via a pay-per-lead program.

A well designed affiliate program could bring very explosive positive results to the affiliate program owners' business and the stream of income for the affiliates themselves.

An affiliate strategy done right can increase online sales tremendously. There are well over 30 affiliate software packages to choose from. There are also more than 200 features in affiliate software and network offerings.

Many success stories of the Internet businesses today are the results of suitable application of affiliate programs without which most online businesses could not survive let alone expanding their businesses.

About The Author: Sung-Liang Woon (John Woon) is a Rubber and Latex Consultant with about 30 years of experience. He enjoys writing, lecturing, travelling, taichi, playing flamenco guitar and singing. Check this fantastic website to find out how he has ventured into Internet business: Take These 3 Steps To Instant Internet Business Visit his website, Earn Cash Now Working From Home. Take a tour at his Blogs: 1) JohnWoon's Internet Home Business. 2) JohnWoon's Low Price Pharmacy. 3) Asthma and Allergy 4) Diabetics' Valuable Guide 5) Hypertension and the Heart 6) Stop Smoking Site