Benefits for the Merchant:
1. Instead of a sales force of one or two people, by using Affiliate Marketing a merchant can have a sales force of thousands or more. Their products will be seen by hundreds of thousands of visitors instead of only those that they alone would be able to promote their product to.
2. The merchant does not have to worry about hiring, firing and all the other tedious tasks that come along with having employees in a business. Software programs can run the affiliate program and do much of the mundane work.
3. Affiliate Marketing allows the merchant to get exposure for his product without incurring a huge expense. Many affiliate programs pay the marketer a percentage of the products sale price. Utilizing this type of program, the merchant wouldnt pay anything to the marketer unless his product actually sells.
4. The advertising costs for the merchant are minimal compared to the aspect of the merchant doing all the promoting themselves.
Benefits for the Marketer:
1. Most affiliate programs are free to join. You can join numerous programs and have a myriad of products available to promote, depending on your situation.
2. Your overhead should be low. You dont have to buy the products up front. Your job is to get people to visit the merchant. When the visitor makes a purchase, the merchant handles the transaction and the shipping of the product as well as any refunds that may be required.
3. There is no need to hire employees. You can promote many different affiliate programs from one website. This makes it an ideal way for a person to earn some extra income without a lot of work being involved.
4. Since the merchant handles the transaction, there is normally no customer interaction needed. Of course you may get the odd email asking questions about the product, but under most circumstances there is no need for interaction between you and a potential buyer.
5. You have the option of changing products/programs as you see fit for your particular site or situation. This wouldnt necessarily be the case if you were promoting your own products. If a certain product is not selling, you can easily exchange it for another, or perhaps even decide to stop promoting it altogether.
Affiliate Marketing works because it benefits both the merchant and the marketer. Each party benefits from the program in several distinct ways, thereby making Affiliate Marketing a wise and cost efficient way to sell products or services.