Affiliate marketing for an online business, how does it work?

Without visitors to an online store, there are no sales and no revenue. Therefore, it is important to determine and analyze the different sources of visitors (also called "traffic"). Most online businesses receive traffic from the following channels: search engines (especially Google), affiliates, direct traffic and (to a lesser extent) via incoming links and sent newsletters.

In the knowledge base, we discuss all resources. On this page, we zoom in on affiliate marketing.

What is affiliate marketing?

Affiliate marketing is a form of online marketing in which online businesses (the advertisers) reward third parties (the 'affiliates') for sales placed by customers supplied through the affiliate. Affiliates can supply these customers by, for example, placing ads of the online business on the website(s) they manage or by mentioning the online business in the newsletters they send. The moment these customers place an order in the online business, the affiliate receives compensation. This is usually a percentage of the acq

uisition amount, but per payment based on click or view also exists.

Common affiliates are price comparison websites such as Vergelijk.nl, Kieskeurig.nl and Beslist.nl. (The latter we will cover in a separate article because of the mandatory "shopping cart model" they introduced in the summer of 2016).

1. Visitor comes to website, 2. Visitor clicks on affiliate link, 3. Visitor buys promoted product from online store, 4. Seller receives purchase price, 5. Affiliate receives commission, 6. Buyer receives product

Affiliate networks

Often there is no direct contact between the online business and the affiliate, but the contact is through an affiliate network. Well-known parties are Daisycon andeTradeTracker.

As an online business, you register with one of these networks and create a profile in which you indicate what your offer is for the affiliates (for example, 12.5% of each sale you realize through the affiliate) and you add promotional material, such as logos and banners. The affiliates can "apply" to your offer, and you decide with whom to work.

The affiliate network then takes care of proper handling of payments to the affiliates and measuring placed sales and leads with their software. Affiliate networks make it possible for affiliates to promote multiple advertisers within one interface.

Affiliate marketing compensation structure

Affiliate marketing is based on the principle of no cure no pay, which means that an affiliate is only paid if the visitors it delivers actually lead to purchases. The most common compensation structures for online businesses are:

Cost per sale (CPS)

Here, a fee is paid as soon as the visitor generates direct sales in the online business via the affiliate. The advertiser can pay the affiliate a percentage of the sales amount as compensation.

Cost per click (CPC)

CPC is independent of the number of sales or leads generated, since a fixed amount - often no more than a few cents - is paid per click on the advertiser's promotional material (the banner or text link).

It is good to realize that affiliate marketing can be a nice extra revenue channel (which doesn't have to cost anything when it doesn't generate anything), but don't expect it be a gold mine. In our experience, the conversion rate is generally very low.

Buy or sell affiliate websites through Businessforsale.eu

Besides online businesses, more and more (affiliate) websites are offered through Businessforsale.eu. As a buyer you will find these websites between the regular offers on our platform. As a seller you can register in the regular way on the platform. With your registration you indicate via a check mark that it concerns a website. It is wise to describe the earnings model well.

If desired, you can hire us to perform a scan, with which we will completely go through the visitor flows of your (new) online business for current status and potential, from the source to the exit page. (If it concerns a potential purchase, the cooperation of the current owner of the online business is required)

Directly put your (affiliate) website up for sale.