An affiliate network acts as an intermediary between publishers (affiliates) and merchant affiliate programs. Many times affiliate networks provides affiliate marketing program platform to the merchants to allow them to enter in affiliate marketing world.
Affiliate networks usually allow various webmasters or internet users to join their networks at free of costs and participate in affiliate programs which are suitable to their websites. They have few minimum requirements and as a webmaster you need to fit to those requirements and you can enjoy earning with affiliate networks. Thus you don't have to go and visit individual websites or read about affiliate programs or go to forums to find out which affiliate programs will be suitable for you? You can get many online merchants available there in affiliate networks and you can choose any of them in any numbers and start promoting their products. Thus publishers find it very easy to find and participate in affiliate programs using affiliate networks.
However, if this is the biggest advantage for affiliate networks there is also a big disadvantage with them. You will certainly have very tough competition in promoting products. All experienced and veteran internet marketers would also be promoting same merchant and products which you are promoting as they also must be belonging to those networks. Also affiliate networks ask for few % on every transaction an affiliate provide to merchants thus you as an affiliate you may get lesser % commission with networks compared to what you can get with those merchant’s in house affiliate programs.
Merchants by joining such affiliate networks get rid of various activities like recruiting affiliates, promoting affiliate programs, managing transaction and thus they prefer joining such networks.
There are few online sellers who don't have their own in house affiliate programs who actually joined such affiliate networks to get exposure of affiliate programs. Few merchants or online sellers have their in house affiliate program but even though they joined affiliate networks to get more exposure. Of course the commission amount they must be providing would be lesser compared to their in house program as they have to share it with affiliate networks as well. However some may provide equal commission in both networks as well as in house affiliate programs. And there are few online sellers who are having their own in house affiliate programs and never prefer to join any affiliate networks. There can be two reasons for it: Either they are doing well with their in house affiliate programs or sometimes affiliate networks may not support few products which they are catering too.
For merchants, affiliate network provides various services like tracking technology, reporting tools, payment processing, and access to a large base of publishers. Merchants also have to pay few capital amount or basic fee to join affiliate networks.
Let's look deep into business model of affiliate networks: Affiliate networks acts as intermediary between publisher and merchants. They earn revenue by:
- Charging merchants sing up fees, may be monthly fees in some cases depending upon the service they provide.
- Charging merchants certain percent of commission on total sales amount referred by the affiliates from their network.
Affiliate networks basically provides a platform where publishers (affiliates) and merchants (online seller) unite with each other by generating revenue from online sellers and providing excellent services to both online sellers and affiliates.
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