What’s an easy way to explain affiliate marketing to a friend, colleague or family? I am sure every affiliate marketer had to ponder on this question at one point or another. Let me suggest a simple explanation that you may find of help.
You’re a kid. It’s a hot summer day. You know that an ice-cream truck passes your neighborhood, but stops on a street just around the corner. You work out a deal with the ice-cream truck driver where he would pay you 20% (commission) of every ice-cream sold to the kids that you bring to him. You’re an affiliate/performance marketer now.
You’re a kid. It’s a hot summer day. You both possess the knowledge of the ice-cream truck’s route, and have access to and means of influencing the ice-cream truck’s primary target audience. You agree with the ice-cream truck’s driver on a remuneration that he would pay you for every kid that you refer his way [20% of every sale would be a PPS/CPS (pay/cost per sale) commission, whereas a flat $2.00 remuneration would be characteristic of a classic PPL/CPL (pay/cost per lead) model]. The guy is interested in growing his business even more, and he agrees to pay you the default 20% commission if the monthly sales you refer do not exceed 15 sales, and 30% if the sales your monthly referred sales exceed 15 sales (tiered commission structure). He also tells you that he’d throw in a $15 bonus on top of your commission with every 15th sale you refer (performance bonus). If you have a access to large numbers of kids that could buy his ice-cream, you can also work out a private deal with him, whereby he would pay you 30% apriori.