Tuesday, December 18, 2007

An Affiliate Marketing Business Model

A business model is a broad term representing various aspects of a business including its purpose, offerings and strategies.
What is the Affiliate Marketing Business Model? It is simply a plan of action that successful affiliate marketers have worked out to help them get the highest return on their investments of time, man-hours and effort expended. The term gained popularity after 1990, (although it came into use around 1950), and most models can be broken down into 4 areas.

Infrastructure: This defines the skills needed to execute the model successfully, the alliances and partnerships that complement it and the value configuration that makes the proposition mutually beneficial to the customer and the parties involved. This would define the level of computer proficiency needed, the partnerships or joint venture partners that will be utilized, and a definition of how much can be made with each campaign.

Offering: This area defines the products and services that you are offering. The product belongs to the partner, but in return for promoting the product, the affiliate marketer will receive a percentage of the sales made through his/her efforts.

Customer: This part of the model defines the customer that the product is targeted towards, the distribution channel, and customer relations. A targeted customer should be defined or you risk diluting your efforts. The distribution channel is how the customer will receive their product and customer relations that deal with guarantees and support services that will be provided by the partner that is being promoted.

Finances: Everything concerning money is covered in this area, the amount expended on promotion as well as the revenue received. The amount spent on promotion should never exceed the amount of revenue or it becomes a losing proposition.

An affiliate marketer essentially drives traffic to their partner web site in exchange for a percentage of the profits. As a business model, this would make the purpose to refer visitors to the partner site, the offerings to be the partner goods and the strategies used to achieve this goal, S.E.O. optimization, pay-per click and traffic exchanges, among others. The customer, by being defined, allows you to target your audience and get the most return from your promotional efforts. Finances are the lifeblood of every commercial proposition, with profit being the ultimate goal. The business model is a plan of action to be executed to achieve that goal and allows you to follow the necessary steps to succeed. By taking the time to work out a plan of action in advance you can determine how much effort will need to be expended and what steps will need to be completed to make a profitable venture, saving time and effort in the long run.

Article Source: http://EzineArticles.com/?expert=Karen_Gross

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