What the Hell is Affiliate Marketing Anyways?

Over the last few weeks, since I’ve launched InspiredAffiliate.com and since I’ve decided to dive into Affiliate Marketing, I’ve been asked by quite a few people what exactly it is that I’m doing.  Meaning, most people have no clue what Affiliate Marketing is.  I had a similar experience when I first got into Blogging, but now I find most people are at least aware of what Blogs are and how they work.

When I tell people that I make money from Blogging and they ask how, it’s pretty easy for me to just answer "Oh, one way is to just accept advertisements on my Blog." and it makes sense to people.

While trying to explain Affiliate Marketing to a few people, I realized that most people don’t really understand the concept.  In fact, the more I try to explain how it works and how a person can make money from it, the more people seem to think it’s some kind of "dirty" way of making money.  They think that I’m somehow trying to make money without providing any value.

For example, let’s say that I show someone an offer for a product selling for $100.  I show them what the product is and then I give them a general overview of how I could potentially promote that product online.  So far so good.  Then, they typically ask me how much I would make from promoting the product, and then I tell them $50 as an example.  This is typically where people start to feel like something shady is happening in the picture.

In most people’s minds, they don’t understand WHY someone would ever pay an affiliate 50% of the products sale price for promoting the product.  I mean, affiliates don’t have to come up with the idea for the product, don’t have to create it, manufacture it, stock it in inventory, protect it from theft, package it, ship it or support it, but they can get 50% (or more) for connecting the buyer with the seller?  That doesn’t sound right to most people.

The reason for this is because most people don’t understand what’s involved in the process of marketing and selling a product.  In most people’s minds, they believe that the "value" in creating a product is in the idea/manufacturing stage along with the support stages.  Most people think that all you have to do is come up with an idea, make it, and support it and selling it is easy.  A good product sells itself right?  Wrong.  Nothing could be further from the truth.

In our modern society, people complain about sales and marketing companies, but at the same time they won’t spend their dollars on products or services that are not properly marketed and sold to them.  Businesses that embrace sales and marketing thrive, and businesses that focus all their efforts on just making quality products and services without any regard for marketing and sales end up going bankrupt.

A successful business has to arrange itself according to the society that it serves.  In our society, that means a lot of money has to be spent on marketing and sales, because people won’t buy otherwise.  You can’t blame businesses for doing this, or think that there is something wrong with this, when you yourself are purchasing products and services based on how well it was marketed or sold to you.

For example, I like Fujitsu laptops.  I like to be able to walk into a BestBuy and see the laptop there so I can see how it looks.  I like to be able to go to Fujitsu’s website and see the specs on the laptops and I like to be able to see brochures that sell me on the benefits and features of the laptop.  That’s all marketing stuff.  Fujitsu has to pay someone to make brochures, build a website, or offer them a distribution channel/showroom like BestBuy provides.

So what is Affiliate Marketing in my eyes then?  Affiliate Marketing is BestBuy.  Affiliate Marketing is the web designer that creates the web site for Fujitsu.  Affiliate Marketing is the company that creates TV commercials.  Affiliate Marketing is the guy who makes TV commercials for a company to sell their products.  Affiliate Marketing is simply MARKETING.  Helping a company that has created a product or service to connect with clients that want that product or service.

The MAIN difference in my mind between Affiliate Marketers and just regular Marketers is that Affiliate Marketers put their money where their mouth is.  Affiliate Marketers only get paid if they do what they say they will do, meaning they only get paid IF they provide value.  The Affiliate Marketer "agreement" with the company’s that they represent in the marketplace is very simple.  It is simply this:

"I will find interested and willing customers for your product and service and bring them to you, and if (and only if) they purchase your product or service (whatever that may be), I will expect to be compensated by you in a fair way that still allows you to make a profit and run a healthy business, while simultaneously allowing me to make a profit and run a healthy business being an Affiliate.  Also, you are free to promote your products and services yourself through your own channels and with other affiliates and for those sales, I do not expect to be compensated. "

That is, in layman’s terms, the agreement that an affiliate makes with the businesses that they represent in the marketplace.  This performance based approach is very ethical, logical and ultimately makes the most sense to me as a marketing option for businesses.  Ultimately it will also benefit customers because affiliate marketing is probably the most effective form of marketing.

So how does Affiliate Marketing help consumers then?  Isn’t it all just a bunch of "sales crap" to make people buy stuff online?  No.  The consumer benefits by having choice in the marketplace to purchase products and services which will enhance their lives.

There are a lot of companies out there that produce great products and offer great services, but they simply don’t have the same marketing budgets as the big corporations out there to compete in the marketplace.  For example, lets say that you start a business that makes customized dog leashes.  You produce a great product that’s been thoroughly researched and lets say you can make the product better and cheaper than the crap people can buy at WalMart, as an example.

Previously, it would have been very difficult for a small business like this to compete against a giant corporation like Walmart.  Now with Affiliate Marketing in the picture, a small business owner has a chance to compete.  They can tap into an army of affiliate marketers who will help them market their specialized product to people looking for that exact thing.

Here’s how the world worked before Affiliate Marketing:

1) Paul is looking for a specialized dog collar for his dog.  He goes to Google and searches for "Specialized Dog Collars" and finds a number of local pet store listings for Pet Mart etc.

2) He drives around town, going from pet store to pet store looking for what he’s looking for.  Disappointed that he didn’t find what he was looking for, he settles on the best thing he can find at the pet store which still wasn’t what he was looking for.

3) In Chicago, a small business owner makes the exact specialized dog collar that would be perfect for Paul and his dog, but this store owner has no clue that someone named Paul is looking for a product like this on the other side of the continent.

Now, here’s what happens when Affiliate Marketers get involved:

1) Paul is looking for a specialized dog collar for his dog.  He goes to Google and searches for "Specialized Dog Collars" and finds a number of local pet store listings, as well as a Chicago based business that makes specialized dog collars.  Paul clicks on the ad on Google and goes to a website which gives him everything he needs to know in order to make an informed decision on making a purchase.

2) Paul decides to buy the specialized collar.

3) The business owner in Chicago, through his affiliate, is connected with Paul and sells Paul his specialized dog collar.  The business owner is happy, as he has found a perfect customer for his product.  Paul is happy because he found the collar he was looking for.  The affiliate is happy because he made a commission.  And, Paul’s dog is happy because he got a new dog collar.   See, everyone wins.

So, maybe the answer to "What the hell is Affiliate Marketing anyways?" is simply this – "I help businesses of all sizes to find their perfect clients, while at the same time helping people to find the best products and services to enhance their lives."

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