Starting your own Business? A closer look at Affiliate Marketing

If you are just beginning in Internet Marketing with the goal to earn extra cash or for whatever reason. Then the easiest and most simplest way to start earning extra cash or building up a business, is by selling other peoples products, also know as Affiliate Marketing. In this article we will have a look at the various types of affiliate marketing opportunities that are available.

Over the last few years, affiliate marketing has shifted into greater heights of popularity, no longer is affiliate marketing merely thought of as an alternative method for the merchant to advertise his products, but also as a source of additional income for the affiliates.  With the benefit of little to no start-up costs makes affiliate marketing ideal for people wanting to try their hand at Network Marketing. And has in fact become the number one provider of advertising for the merchants and the main source of income for internet marketers.

What you need to know and ask yourself is; what type of affiliate marketing will work best for you?  Are all affiliate marketing programs the same?  Are the benefits the same?  Or are there affiliate marketing programs that work better than the others?

There are a number of types of affiliate marketing opportunities ranging from the basic Pay Per Click marketing to the more advanced Residual Income Marketing. Lets have a look at some of the various options available in more detail.

1. Pay Per Click (PPC)

PPC is most likely the most popular type of affiliate marketing for affiliates with small websites, and probably the easiest way for them to earn money.  In this affiliate marketing type, the merchant pays the affiliate whenever a visitor is referred to his site, that is whenever someone clicks through on the merchant's banner or text ads.  The affiliate gets compensated a certain amount even if the visitor he referred does not purchase anything from the merchant's site.  An example of this could be Google Adwords. This is where ads are placed on your site by Google or some of the other Search Engines. However, typical fees for PPC affiliate programs are small, usually not exceeding a dollar for every click.

2. Pay Per Sale (PPS)

PPS affiliate marketing is the most popular among merchants and is also the most lucrative type for the affiliates.  In this type of affiliate program, the merchant only pays the affiliate whenever his referral translates into a sale, paid subscription or anything else entailing a financial commitment by the customer or lead. This means a lot of savings for the merchant in advertising costs.  On the other hand, it becomes the most lucrative type for the dedicated affiliate, for commissions in PPP affiliate marketing can range from 15% to 20% and sometimes 75% of the actual product's sales price.

One the biggest advantages of PPS type of affiliate marketing is that you as the affiliate do not need to have a website of your own. You can apply the PPC Method as mentioned above. You will then pay for the clicks on your advertisement that lead to the sales on which you then earn commissions.

This method of marketing can also be the cheapest way to start out in internet marketing. Especially if you create you PPC Campaign in one of the smaller search engines where you would pay far less for your add then you would with one of the larger search engines such as Google etc.

3. Pay Per Lead (PPL)

The pay-per-lead type of affiliate marketing is a variation of the PPS type and is mostly used by insurance and finance companies and other companies who depend on leads for their company to grow.  In this type of affiliate marketing, the affiliate is paid whenever the visitor he referred to the merchant's site fills in an application form or any similar form related to the business of the company.  Compensation for this type of affiliate marketing is based on a fixed fee whose rates approximate that of the fixed fee in the PPS type.

Besides these three specific types of affiliate marketing, a lot of other affiliate marketing types exist.  If the classification is based on the depth of the affiliate network, it can be classified as single-tier, two-tier, and multi-tier affiliate marketing.  There is also another type of affiliate marketing that pays the affiliate each time the customer he has referred purchases something from the merchant's site.

4.  Residual Income Affiliate Marketing

In residual income affiliate marketing, the affiliate gets paid not only once for every customer he has referred to the merchant's site.  But, the affiliate is also paid whenever the customer he has referred comes back to the site and purchases another product.  Compensation for this type of affiliate marketing is based on either sales percentage commission or fixed fee basis.

The different affiliate marketing types work differently for merchants and affiliates alike, each would generally have their own list of benefits.  Which type of affiliate marketing will work best for you?  It is not for me to say.  Rather, it is for you to choose which type of affiliate marketing program will suit your needs, characteristics and budget best.