What is Affiliate Marketing? How It Works for Online Business

For any online business to succeed today, multiple factors must align, especially effective marketing strategies and leveraging social media channels to boost brand awareness and drive sales. One of the most popular online marketing strategies is **Affiliate Marketing**, which offers excellent value, especially for startups. This strategy helps brands achieve strong results without significant upfront costs. Let’s explore how it works and the benefits it offers.

What is Affiliate Marketing?

**Affiliate Marketing** is a performance-based marketing strategy where individuals or partners help promote or sell products and receive commissions in return. These affiliates promote brands through their own platforms such as websites, blogs, social media, or other digital marketing channels. Their efforts drive potential customers to the business in exchange for agreed-upon commissions. When customers purchase products through links shared by these individuals, they receive commissions according to the agreed terms with the business. Common examples include brands collaborating with **Influencers** or **KOLs** to promote or sell products, rewarding them through commissions. Platforms like **TikTok** now allow users to pin affiliate products on their profiles to earn commissions through sales generated on their channels.

Key Elements of Affiliate Marketing

To maximize the reach and effectiveness of affiliate marketing, there are typically four key components involved:

1. 1. **Seller or Brand:** The business owner or brand looking to promote and sell products through affiliates.

1. 1. **Affiliate / Publisher / Influencer:** These can be Influencers, KOLs, individuals, or online businesses with websites, social media, or digital platforms used for promotion.

1. 1. **Customer:** The general audience following affiliates on various platforms who purchase products through their promotions.

1. 1. **Affiliate Network:** A platform acting as an intermediary between brands and affiliates, facilitating smooth collaboration between both parties.

Types of Affiliate Marketing Models

Unattached Affiliate Marketing

This type involves affiliates who have no direct connection to the products or services they promote. They simply focus on generating traffic and clicks through various marketing tactics without building content or customer relationships.

Related Affiliate Marketing

This model involves affiliates who have some interest or connection to the products but lack firsthand experience. They leverage niche connections between their content and the product to build moderate credibility with their audience.

Involved Affiliate Marketing

This is the most effective type, where affiliates have direct experience with the product or service. They share personal, positive experiences, adding significant credibility and trustworthiness to their promotions, acting as reliable sources for their followers.

Affiliate Marketing Payment Models

Affiliates can earn commissions through various methods, commonly categorized into seven types:

1. 1. **Pay-Per-Sale (PPS):** Commission is earned when a sale is made via the affiliate link, typically a percentage of the sale price.

1. 1. **Pay-Per-Click (PPC):** Payment is made per click on the affiliate link, regardless of purchase.

1. 1. **Pay-Per-Lead (PPL):** Commission is earned when a user completes a form or registers through the affiliate link, often used in industries like insurance.

1. 1. **Two-Tier Affiliate Programs:** Commission is earned from both product promotion and recruiting new affiliates.

1. 1. **Lifetime Commissions:** Affiliates earn from repeat purchases made by referred customers for the lifetime of the relationship.

1. 1. **Recurring Commissions:** Ongoing commissions are earned from recurring subscription services, typically monthly or yearly.

1. 1. **Pay-Per-Install (PPI):** Payment is made when users install an app or software through the affiliate link.

Can Businesses Start Affiliate Marketing Without Investment?

Absolutely. Today’s **social media platforms** and **e-commerce platforms** often offer free tools for affiliate marketing. You can sell products and collaborate with users who promote them for commission-based earnings, as seen on platforms like TikTok. However, your products must comply with legal and platform regulations to qualify for affiliate programs. Related Article: What is E-Commerce?

Pros and Cons of Affiliate Marketing

Pros

• • Expands online market reach without traditional advertising.

• • Boosts sales quickly through real user endorsements.

• • Low-cost advertising without the need for creative content production.

• • Quickly builds brand credibility through trusted promoters.

Cons

• • Potential for exaggerated or false claims from affiliates aiming to boost sales.

• • Less control over creative content and messaging.

• • Risk of attracting leads outside the target audience.

Conclusion

**Affiliate marketing** means promoters—regardless of who they are—earn commissions through platforms or tools that track promotional activities. Commission is rewarded based on measurable outcomes like sales, leads, downloads, etc., with payouts either as a percentage or flat fee. This marketing method can rapidly enhance brand awareness and sales. Businesses or individuals seeking additional income can explore platforms like **Accesstrade**, Lazada, **Involve Asia**, **Priceza**, Shopee, and **TikTok**—all offering affiliate opportunities for users, influencers, and business owners. Our Digital Marketing Agency is ready to consult on all forms of online marketing strategies.