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Once the affiliate marketer and the merchant agree on the payment terms, the affiliate marketer then creates content promoting that product. The affiliate marketer will include affiliate links provided by the merchant to promote the product. Affiliates are credited and ultimately paid through tracking associated with their affiliate links.

Here’s what an affiliate marketing transaction looks like from start to finish:

An affiliate marketer displays an ad promoting a product or service from an affiliate merchant on their website, blog, social media platforms, or email newsletter. Potential customers click the what is affiliate marketing ad or link to learn more about the offer from the affiliate merchant. The customer is tracked via a specific tracking code attributed to the affiliate marketer who promoted the referral link. The customer makes a purchase and continues through the payment process as normal. The affiliate merchant marks that the purchase was made through an affiliate link and works to validate the sale. Once the sale is validated and completed, the purchase is credited to the affiliate marketer, who then receives a commission from the affiliate merchant. Using affiliate marketing software, the affiliate merchant can track how many purchases were made through the affiliate. This data helps marketers determine the effectiveness of their affiliate marketing relationships, as well as properly attribute affiliates for their work.

When a business enters into an affiliate program agreement with a creator, they are essentially paying for access to that influencers built-in audience. Businesses recognize that it takes years of time and effort to organically build a niche audience. For many companies, the choice between investing in building a new audience is less appealing (and more expensive) than working directly with a creator who already has that audience.