What is the business model behind Amazon

Affiliate Marketing - A business model thanks to Amazon

At a cocktail party in 1997, a young woman spoke to Jeff Bezos, the founder of Amazon, through her website. She wanted to find out whether there was a way to sell books for a commission on Amazon - the idea of ​​affiliate marketing was born. To this day, it is crucial to Amazon's success and popularity.

What is Affiliate Marketing?

The basic idea of ​​the affiliate principle already existed before 1997 in traditional offline marketing. It was picked up by well-known structures of the sales and network partners. The partner or also Affiliate markets another company's products, also called Merchant, on his website. The affiliate receives a commission for every transaction or sale that was caused by his advertising measures. The Commission amount is individually negotiable.

Amazon, as an example, is both an affiliate and a merchant. On the one hand, Amazon receives commissions from linked products from other retailers and, at the same time, the eCommerce giant offers the opportunity to market products on its own website. Affiliate networks like zanox or affili.net help with Mediation between merchants and affiliates. Companies offer partner programs for various product categories and partners register as participants via the network.

Not all merchants who offer affiliate partnerships are registered through such networks. Many companies maintain these connections on their own. In contrast to reseller or franchise programs, participation in an affiliate program is usually free and paid on a success basis.

What is tracking and what role do cookies play in it?

Anyone who wants to earn money successfully as an affiliate should have their website search engine optimized and do sustainable online marketing. This is the only way to be able to Lured visitors to a website and their Attention to the offers of the merchants be steered.

In order to sell the offers, the affiliate providers often provide advertising material. These are available in a wide variety of types and forms. They all have one thing in common - the link that leads to the product on the retailer's website. This Link contains a partner code. If a visitor to the website arrives at the merchant's website and takes the desired action there, such B. a purchase or leaving his address, the Affiliate paid with the agreed commission. Tracking means nothing else.

Cookie tracking is most commonly used in affiliate marketing. A cookie is a file that is stored by the visitor's browser either permanently or only for a certain period of time. So behind the offers of a merchant on the affiliate's website there is a Cookie with the ID of the affiliate deposited. After a purchase has been made, the merchant can see which link took the customer to the product.

A cookie must be created to assign a referral user

Since cookies exist for a longer period of time, the customer can be identified again when the website is visited again. In this way, transactions or repeat purchases that are only triggered at a later point in time can also be assigned to the affiliate. In contrast to Amazon, which specifies a cookie lifetime of a few hours, the average settles at twenty days.

What commission models are there?

Receiving commissions is the decisive incentive to do affiliate marketing in the first place and to advertise the merchant's products. The most common methods are briefly described below.

Pay per sale

Pay per sale is the classic form of remuneration in affiliate marketing. Here the partner receives for every sale, which was concluded through his advertising activity, the agreed commission. The amount of the remuneration depends on the type of product. The commission is for most products, such as B. Books, clothing, food supplements, between 5 and 15% of the sales price.

Pay per lead

From a marketing point of view, a lead is a potential customer. In the affiliate context, depending on the merchant's industry, this also includes the Creation of a contract - or any other type of degree. For example, a bank pays € 4 if the referral by the affiliate prompts a customer to open an account. In contrast, an insurance company pays € 4 for each address of prospects who were willing to provide this personal information to the merchant.

Pay per click

With this form of remuneration everyone will Clicking on a banner or text link is rewarded. The amount for this is between € 0.03 and € 0.25. This commission model is rarely found in affiliate marketing.

Pay by email

When paying by email, similar to pay per lead, the affiliate receives for every visitor who leaves his or her email address with the merchant, a fee. E-mail addresses can be submitted by registering for a newsletter or by adding them to distribution lists.

Lifetime commission

The affiliate receives this form of commission for all follow-up purchases by a one-time referral customer. With the first purchase, the partner ID of the affiliate is stored in the customer's customer database or a cookie without a limited lifetime. In most cases, for each subsequent purchase it can be clearly identified by whom the customer was initially referred.

Despite being an affiliate dependent on Commission amount and changes of the merchants is or the Affiliate Network Conditions it is a lucrative way to make money running a website. The complete dependency on merchants can be avoided for the most part by participating in several partner programs. Amazon shows us how much success can be achieved with this business model. In addition, your own website should be informative, appealing and search engine optimized.

 

Keywords:Affiliate Marketing, Amazon, Online Marketing