Affiliate marketing is a joint and mutually beneficial business
partnership between merchants and website publishers/owners
whereby an affiliate is compensated for every visitor or client
provided through his effort. The moment a customer makes a
purchase of goods or service, part of the profit generated from
that particular transaction is credited to the affiliate's
account as a commission. Amounts of compensation may be based on
a fixed value for each visit (pay-per-click), registration
(pay-per-lead), or for every purchaser (pay-per-sale).

However, just like a coin, the affiliate marketing program also
has its obverse and reverse side.

Advantages

1. Merchants gain a wider place to sell their products and
services, resulting in more customers and more sales.

2. Merchants can gain more customers without spending valuable
time in searching for them.

3. Programs that track compile statistics from affiliate sites
provide reliable and current client behavior on trends and
demands at no extra cost.

4. The affiliate marketing program provides an easy way to
create additional sources of income for website publishers and
owners. Marketing banners of merchants products generate instant
sales wherein they get a commission.

5. It does not require a sizeable investment on the part of the
affiliate.

6. The affiliate does not have to worry about customer support,
book keeping, and e-commerce related headaches since in
affiliate marketing, the merchant handles it all; all the
affiliate needs to do is promote and resell the product.

7. An affiliate marketer enjoys the luxury of being his own boss
and work on his own time. He can work only for a few hours or
more and generate income 24/7 wherever he may be located in the
world.

8. An affiliate marketer can still maintain his present work or
business and have the affiliate marketing income to supplement
his financial
position. With a laptop and an internet
connection, anybody can work almost anywhere even while enjoying
a vacation.

9. For clients, they do not have to drive all the way to the
merchant's store or retailer to physically buy the product or
engage the services of a service provider.

These are only some of the advantages of affiliate marketing.
However, it is also best to be aware that this online business
also has some disadvantages.

Disadvantages

1. There is the possibility that some merchants may incur high
commission costs and costly set up and maintenance fees due to
affiliate facilitators/brokers.

2. The affiliates may engage in false and misleading advertising
in order to get sales commissions. Unscrupulous affiliates may
make claims and promises regarding the product and services,
which are completely wrong or extremely exaggerated. In cases
like these, the merchant usually receives complaints and lose
any potential consumer.

3. Unscrupulous and dishonest merchants may arbitrarily close
down programs without informing the affiliates and without
paying commissions.

4. Merchants may promise high commissions to attract new
affiliates then drop commission rates after a week or two.

5. Link hijackers can hijack affiliate links and get paid for
the commissions instead.

6. There are also false advertising, unlawful use of trade
names, logos, or brands.

No matter the disadvantages, affiliate marketing still remains
as one of the best ways to make money online. Marketers simply
have to understand that by doing their homework and research
before hand and by implementing simple security measures, they
can easily negate all these disadvantages in order to enjoy the
advantages of the affiliate marketing program.

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