Everything You Need To Understand About Affiliate Marketing
Affiliate marketing is a place where most of us are interested. We’ll discuss this in the article. Faced with today’s difficult commercial scenario, it is normal for manufacturing companies to look for alternatives to bring their brand and product to the consumer market directly. They may be tempted to bypass the distribution chain and provoke their rejection, using the Internet with the risks that it entails. The million dollar question for a manufacturer brand is: How can I sell my products directly to the consumer without the merchant turning against me?
When a retail distributor can no longer sell the product to the consumer, for example due to population confinement, one option for the manufacturer brand is to make the merchant a partner . From client to colleague. Simple as that. Getting it is not difficult and does not require much imagination.
With the Covid-19 pandemic, there has been a commercial hit in physical stores that is difficult to solve. Today everything is risks and costs for the merchant. In addition, changes in buyer behavior and the possibility of outbreaks that will close the streets again in the not too distant future open up an unpredictable commercial scenario.
The truth is that the consumer has launched to the Internet as never before. Many media have echoed and some manufacturers have already realized that eCommerce and the Internet can be a way to cushion the blow. Street shops will no longer replenish stocks so easily (at least in the short term) on their shelves and manufacturers will have to focus on new distribution strategies.
From Supplier-Client to a Relationship Between Partners, Through eCommerce
It may be surprising that, in general, companies are unaware of something that was already invented on the Internet many years ago and that makes more sense today than ever: affiliate marketing . We are talking about a technicality that generates some confusion and the fact that it is little known may be due to the fact that it is only used, in general, by brands with great experience and resources, which can diversify their investments. It is also known for internet professionals who earn money from commissions , such as influencers, bloggers and all the media fauna that lives on the Internet. A case of affiliation is the Amazon marketplace itself, with a powerful affiliate program that seeks alliances with third parties of all kinds.
Today it is rare for manufacturer brands to use the affiliation strategy aimed at the street trader. Until now it was not necessary, but as we all know, things have changed. With this new commercial formula, the normal supplier-seller relationship between them is replaced by an association role.
What Is Affiliate Marketing Between Manufacturer And Distributor?
The word “affiliation” reminds us of a lifetime of Social Security or trade unions: it simply describes joining an institution or an organization. When this concept is taken to marketing, it means that it goes from a commercial relationship between brand and distributor to a relationship of complicity between them, to persuade a third party: the end consumer. With affiliate marketing, face-to-face commerce gives way to online commerce, to the Internet, where it becomes the commercial battlefield.
The affiliate marketing business model is based on the commercial commission from the traffic directed towards an eCommerce website. If before the merchant bought the product from the brand, now he can also become a commission agent (affiliate) by generating sales in the brand’s online store, whose products he can also sell in his physical store. If before the merchant paid the brand, in the future it will be the brand who pays the merchant. For this, the merchant must generate traffic to the ecommerce of the manufacturer brand.
What Does The Manufacturer Brand Need?
To develop an affiliation strategy, the manufacturer brand must have two fundamental things:
- An online store where you can sell your product on the Internet, either to the final consumer or to the professional. where to receive traffic from any channel. In affiliate marketing, we especially refer to referral traffic, which is the traffic that comes from a link on another website.
- A network of websites where you can place links that can provide visitors to the manufacturer’s eCommerce. When we say “links” we mean ads in the form of banners or buttons. But we also refer to comments on social networks, blogs and in general, links in any space of a third party that wishes to benefit financially from the generation of traffic to the manufacturer’s eCommerce. These links can correspond to lifelong marketers, but also to any influencer , blogger or any person or company.
Any of them can be considered an affiliate of the manufacturer brand.
How Does It Work?
When the consumer surfs the Internet, visits many websites, follows brands on social networks and may be seduced by a message in the form of an advertisement or advice. The moment a user clicks on an affiliate link, it generates a visit to the brand’s eCommerce and if the consumer ends up buying a product, that affiliate receives a commercial commission . This is possible thanks to the cookies that have been installed in the buyer’s browser that leave a trace of the costumer journey (customer itinerary)
At the end of the month or according to the commercial agreement with the affiliate, the brand makes the payment of all commissions generated by consumer purchases verified by cookies
The affiliate has a space on the Internet, sometimes within the merchant’s own store if he has enabled the necessary technology, to consult his commissions, find out about new promotions and access the ads, both graphic and text, that he can use in his website or social network.
What Advantages Does the Membership MKT Offer?
Many, both for the brand and for the affiliate.
If the affiliate is a street trader, he goes from buying product to charging a commission for a sale. If the physical store does not generate sales or they are scarce, the merchant can choose to collect commissions without having to buy and store stocks by inviting their customers to visit their website.
The consumer can find commercial offers on the affiliate’s website with links that lead to the brand’s e-commerce. Also, it actually increases the volume of your offer, because you will always charge a commission for any product purchased on eCommerce. Normally, the merchant does not buy the entire portfolio of the brand and thus, can increase the income possibilities compared to the face-to-face sale.
For the brand, the main advantage is the possibility of weaving a network of salespeople like never before. Sellers that can be of all types, from merchants located in any geographical point, to characters on the network that mobilize hundreds of thousands or millions of followers that can generate a high volume of traffic to the brand’s eCommerce.
In addition, it allows the brand to be closer to the user of its product, to know more precisely the needs of the market and to anticipate the future more easily. You can also weave a strategy of recurrence and loyalty to your audience, which guarantees the future of the brand without being tied to the demands of traditional distribution networks.
The brand also generates a free initial branding that gives it great visibility in the market and receives the endorsement of many merchants or authorized voices who bet on the brand.
It is true that there is no perfect system. Not everything is profit, there are also costs and risks.
The development of an affiliation strategy requires a transformation effort from the manufacturing company since it must assume merchant roles by modifying the usual patterns of administration, distribution and logistics. This requires time, investment and qualified personnel, but it also offers an exciting new commercial scenario for the brand where it can succeed if it trusts itself and its product.
Also Read : Client Management