Product management glosary

Affiliate marketing

What is Affiliate Marketing?

Affiliate marketing is a type of performance-based marketing where a business rewards one or more affiliates for each customer brought in by the affiliate's own marketing efforts. This is a popular way for businesses to increase their sales and reach a wider audience without having to spend a lot of money on advertising.

How Does Affiliate Marketing Work?

Affiliate marketing works by creating a partnership between a business and an affiliate. The affiliate promotes the business's products or services through their own marketing efforts, such as through social media, email marketing, or blog posts. When a customer clicks on the affiliate's unique tracking link and makes a purchase, the affiliate earns a commission on that sale.

The commission rate can vary depending on the business and the product or service being promoted. Some businesses offer a flat rate commission, while others offer a percentage of the sale.

Benefits of Affiliate Marketing

Affiliate marketing offers several benefits for both businesses and affiliates. For businesses, it is a cost-effective way to reach a wider audience and increase sales without having to spend a lot of money on advertising. It also allows businesses to tap into the expertise and marketing skills of their affiliates, who may have a more targeted and engaged audience.

For affiliates, affiliate marketing offers a way to earn money by promoting products or services that they believe in. It also allows them to monetize their existing audience and build relationships with businesses in their niche.

Challenges of Affiliate Marketing

While affiliate marketing can be a lucrative and effective marketing strategy, it also comes with its own set of challenges. One of the biggest challenges is finding the right affiliates who have a relevant audience and are able to effectively promote the business's products or services. Another challenge is ensuring that affiliates are promoting the business in a way that aligns with the business's values and brand.

Additionally, businesses need to have a system in place for tracking and managing affiliate sales and commissions. This can be time-consuming and require a significant investment in technology and resources.


Affiliate marketing is a powerful marketing strategy that can help businesses increase their sales and reach a wider audience. By partnering with affiliates who have a relevant audience and effective marketing skills, businesses can tap into new markets and build relationships with potential customers. While affiliate marketing does come with its own set of challenges, the benefits can outweigh the costs for businesses who are willing to invest the time and resources into building a successful affiliate program.