This is how it works. When a customer visits the site of the publishers or what it is called the affiliate website, then such affiliate website, using the network present between him and the brand or the seller’s website, directs the customer to that website. The brand or the seller in turn pays commission or rewards the affiliate or the publisher.
So this three-step process is engaged in the working of affiliate marketing. It is a market process where the business owner rewards the affiliate for customers brought in or directed by the affiliate to the business owner. The payment is made mostly for each visitor on commission basis. Other modes of commission are revenue sharing or cost per sale method of compensation or commission. Also cost per action, cost per click and cost per mile are also some other popular methods of getting compensated by the seller.
William j Tobin is the man behind this strategical development in the marketing industry. This type of marketing is also called “performance marketing”. The brand or the seller although pays commission to the affiliate for the customers brought in by them as that is why they are deemed to be the extended sale forces for their business. Yet these sellers are not the employers of these affiliates in actual terms. Although the pattern used in this marketing system is similar to one being used in the internal sales department.
Affiliates are paid by the seller for each of the customer directed. Also they are sometimes paid for work done exceeding the sales target in the form of incentives.
Also this is seen to take up a multi-tier shape in this business. Usually, a particular publisher is paid commission for getting customers. But sometimes such a publisher ends up in attracting two or more publishers towards the same seller. In such a case the previous publishers, who attracted the rest of the two or more publisher, is pad an extra commission for all the sales conducted by the latter publishers in the business.