The Affiliate E-Business Model
- Meshanah Mendoza
- Mar 19, 2020
- 2 min read
Updated: Nov 7, 2020
Today there are many e-business models that companies use, such as the brokerage model, the subscription model, and the infomediary model, or the affiliate e-business model. This affiliate (or click-through) model is an e-commerce relationship that involves an online merchant agreeing to pay an individual, in exchange for marketing their site. Alongside this, is affiliate marketing which is where an individual promotes another companies products in return for a commission.
Who is involved?
Merchant: The actual business that wants to sell their products and/or services. They partner with affiliates to increase the sales of their products, and consist of bloggers, social media influences, vloggers.
Affiliate: The party who dedicates their time to promote the merchant’s business, and has the aim to earn a commission from sales.
Network: The third party who supports the payment process.
Customer: The person purchasing the product, after being referred by the affiliate.
The Affiliate Marketing Process
The affiliate signs up to a specific company.
The company provides the affiliate with a link to their site, and they integrate this into their marketing strategies such as in a blog post.
A consumer clicks on the link and they visit the vendor’s webpage and a cookie is also placed onto the affiliates machine. (A cookie is a piece of code data, which is sent from a website and is stored on the user's computer by the web browser whilst the user is browsing the page).
The consumer then purchases a product from via the link that is sent to them and the affiliate earns a commission.
Advantage and Disadvantages
The positives associated with the model is:
Anyone who has basic computed skills can use this model and become an affiliate.
High levels of profit can be gained for the business.
It’s a very passive model if the Search Engine Optimization (SEO) route is used.
The affiliate has many niches to choose from, in terms of what types of products or services they want to market.
It works with any type of website.
The downside to the affiliate model is:
Sometimes this practice is seen as unethical if it is not executed correctly.
It is incredibly competitive, therefore affiliates need to find a way to differentiate themselves.
It can be difficult to scale depending on the niche.
Examples of Success
The most successful business that has used this model so far is Amazon.Com who generated annual sales of about $200 million last year.
Other businesses to check out includes:
What other e-business models have you heard of?
References
Thanks for reading this post Shashika :)
Interesting read! I definitely come across a lot of affiliate links through the youtubers and blogs I view and it does drag me in to click those links to the company pages that are using the influencers as a channel to sell their products! Great work Meshanah!
Thank you Alysha! Those are great e-business models.
This is a great article Meshanah. The main types of business models that I’ve heard of includes business-to-business, business-to-consumer and consumer-to-consumer.
Thank you for reading my post Cassidy! Youtubers are definitely utilising the affiliate business model, that’s a great example.