An affiliate program is an arrangement where a merchant website pays a commission to an affiliate website for directing traffic (customers) back to the merchant website. The two websites, merchant and affiliate, come to an agreement whereby the affiliate will be paid for the amount of people it can send to the merchant site. The most popular way this works is that the affiliate is paid according to the amount of people they direct to the merchant, and who then purchase goods or services from the merchant. This type of affiliate program is called “Pay Per Sale”.

Another option, this one called “pay per impressions”, is for the merchant to pay the affiliate for people who visit their page containing the merchant’s banner advertisement, which means that if a visitor on the affiliate site clicks a link, or banner, and is directed to the merchant’s site, the affiliate will get paid. This can be an excellent marketing strategy for merchants who sell their products or services online.

Other popular types of affiliate programs are:

Pay-per-click: The affiliate receives payment from the merchant according to how many visitors click a link or advertisement that directs them to the merchant site. A purchase from the merchant is not necessary. The per click cost are usually under a dollar, with many being in the 10 to 30 cents per click. As you can see, you’ll need a lot of traffic to your website in order to make money from this type of affiliate program.

Cost-per-sale: Cost per sale is similar to the “pay per sale” model. This is where a merchant pays an affiliate for directing a customer to the merchant site and the customer then purchases something. In some cases, the merchant will pay an affiliate a commission on the cost of the goods sold.

Pay-per-lead: Sometimes called cost-per-lead, where a merchant will pay an affiliate depending on the amount of visitors referred by them who then sign up to become leads, which means that visitors give the merchant information which the merchant can use for sale leads. The merchant usually offers something of value for free or at a reduced cost, thus enticing the visitor to sign up. The major focus of this type of program is to capture the visitors personal information so that they can be emailed offers in the future. This is one reason merchants are willing to pay large amounts of money for these types of leads. Popular Merchant products that use this type of affiliate program are credit cards, make money online offers and quick loan programs.  If your website gets a lot of traffic for these types of programs, you can make money quick as the visitors tend to really go for free and low cost offers.

While Pay per Sale may be the most popular type of affiliate program, pay per lead is quickly gaining in popularity as online marketers learn how to herd traffic to merchants with these types of affiliate programs.

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