What is affiliate marketing?

Affiliate marketing as the name suggest is to sell a product of a vendor as an affiliate and receive a percentage of the profit as commission. In a simpler sense you as an affiliate, sell products of others (commonly known as vendor) and receive a commission on every sale. The percentage of the commission varies, depending on the type of goods or services the vendor is selling.

If you are selling any digital product like software, ebooks then the commission will be high ranging from 45% to 75%. The reason of such a generous commission is the digital natural of the product. The seller does not need to ship any product and the buyer can download it to their computer as soon as they make the purchase. As the product does not need any maintenance, it further reduces the overall cost for the seller and they can offer good commissions to their affiliates.

On the other hand in case of physical goods, the commissions are low ranging from 2% to 10%, because of the maintenance, insurance and shipping cost of the product raises the overall price

What is Pay Per Click advertisement?

Do not misunderstand PPC advertising as denoted here to, advertising in search engines.( As people commonly refer advertising in Google AdWords, Yahoo or MSN as PPC) Here we refer it to the advertisement you can put on your website, from any third party for which you are paid per click basis.

For an example we can take the case of Google Adsense, where they allow publishers to add a snippet of code on their website through which they show ads related to the content and theme of the website. The publisher is paid for the number of legitimate clicks on the ads.

In this form of advertising the publisher needs not to worry about the sales or any other specific conditions (like in case of affiliate and CPA marketing).

Which one is more profitable?

These both types of marketing approach is profitable and depends on number of factors like niche, your website traffic, your web content etc.

If you have a very desperate niche and getting a decent amount of traffic you can chose affiliate marketing, because in desperate niches where visitors are in need of solution of a specific problem, the conversion rate is always higher. So in this case affiliate marketing would be the best option.

If you have a general theme website with lot of content pages and traffic you can try various pay per click advertising from Google, Yahoo, Adbrite, BidVertiser etc. but this does not mean you can not do affiliate marketing here, you can try both at the same time.

Special Requirement for Affiliate Marketing:

There are some general and legal factors which you should always keep in mind in case of affiliate marketing which we will discuss in coming posts.

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