Affiliate marketing is performance-based marketing in which a business rewards one affiliate for each successful purchase from a customer brought by the affiliate's own marketing efforts.
There are three sides of an actual affiliate equation: Product seller (merchant) and Affiliate and Customer. Both merchant and affiliate benefit from the idea of sharing revenue. Merchant offers affiliate a win-win relationship when merchant can increase sales while affiliate get reward in form of commission
1. The merchant: Sometimes known as seller, creator, vendor or retailer,... they are the one who create the product. From a solo entrepreneur to a big brand, anyone could be the merchant in the affiliate model. The purpose of merchant when joining Affiliate marketing model is to advertise their product to customers in order to increase revenue.
2. Affiliate: Also known as Publisher, Influencer. Affiliate can range from a single person to a enterprise, from a professional affiliate, a social media influencer to a customer who make a purchase on merchant website. Affiliate's main role is to attract and convince potential customers of the value of merchant's product.
There are various ways in many channels that affiliate can promote merchant's website such as running ads on Facebook, sharing post on Social media, embed link on their website, running email marketing campaign or seeding on suitable forum,...
3. Customer: Customers are the key of every business, their activity decide the success of a business. Thanks to affiliate promotion activities, potential customers can approach merchant's product easier. Order made by customer through affiliate's marketing action will become referral order, which is the base to calculate affiliate commission.