Affiliate Marketing 2020: How It Works — A Guide

In today’s age of digitization, businesses find themselves hard-pressed to compete in their industry’s market without a substantial online presence. The advancements of the internet and social media have paved the way for digital marketing, making what was once just a hobby website turn into an avenue for monetization.

Today, even simply having a website can be your chance to make passive income. Many have ventured into creating online businesses and eCommerce websites, both of which require your own product, digital marketing strategies, and sales pitching. Another extremely lucrative, yet highly low-maintenance, path to monetizing your website would be affiliate marketing.

Affiliate Marketing

What is affiliate marketing? Affiliate marketing, at a gist, is a digital marketing strategy that involves a merchant or advertiser to offer individuals or online entities to sell their products for a commission. This system kind of works like how retailers have salespeople selling their products for them—when a customer makes a purchase, a certain percentage goes to the salesperson assigned to that client.

The Three Components

As simple as that sounds, there’s more science and strategy that goes into affiliate marketing. To fully understand how this kind of digital marketing solution works, it’s best to understand firstly the components of such a system. There are three major components that have to work in order to get affiliate marketing going: the affiliate merchant, the affiliate network, and the affiliate publisher.

The Affiliate Merchant

The affiliate merchant is the business that creates and supplies the product or service being sold. They would first have an online platform in which they can sell their goods, from which the whole process will begin. When handling affiliate marketing, they will handle the products, the marketing materials, and banners, and as well as giving feedback to their affiliate publishers.

The Affiliate Network

The affiliate network is where the merchant will start their affiliate campaign. The network, more commonly known as the affiliate program, will be the “middleman” in transacting with the affiliate publisher. These would have the tools necessary to give affiliate links, track sales from the links, and track account commissions.

The Affiliate Publisher

The affiliate publisher is the individual or entity that will be handling the sales side of affiliate marketing. By partnering up with a merchant through the affiliate network, they are given access to affiliate links—product links that ties to the publisher from which a consumer can buy from—in which they promote on their website.

The Example

To picture the system work, imagine a merchant that sells and distributes shoes online. This merchant, in an effort to boost sales, will join an affiliate network to reach out to publishers. An individual, who has a website that caters to shoe reviews, then decides to join the affiliate program offered by the merchant.

They will then post content and reviews that feature the merchant’s products, applying the appropriate digital marketing techniques to get more sales. When a consumer clicks on the affiliate links of the publisher and buys from there, the publisher’s account will then register that a sale has been made. The number of sales is then converted into commission, in which the affiliate network computes.


Affiliate marketing is a great way for merchants to boost sales while also helping publishers earn passive income from their websites. By proper utilization of the affiliate program, everyone gets a stake in the process, while easing the load of production, marketing, and sales from all parties.

Are you looking for more information on affiliate marketing and how to achieve success with your websites? Or are you looking to start an affiliate marketing business? Connect with us and see how we can help you today!

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