One of the biggest challenges that businesses face is related to expansion. Expansion is often viewed as a defining period in the entire life cycle of the business. The way this process is carried out typically indicates whether or not the business will be successful moving forward. As such, it is critical that the management pay close attention to the strategy of business expansion. Sometimes, businesses face a plateau in both marketing and advertising that prevents them from expanding their operations further. In such cases, it might be wise to consider other forms of expansion strategies, such as Amazon affiliate marketing or other forms of affiliate systems.
What is Affiliate Marketing?
Basically, affiliate marketing is where other market participants help bring your company’s products and services to the customers through product showcases, blogs, social media posts, and other advertising materials. In return, they are granted a specific amount for commission based on a predetermined percentage of sales.
How Does It Work in Practice?
Affiliate marketing is manifested in various forms. Typically, affiliate marketing is conducted by creating affiliate links, which are then posted on different social media platforms and other websites. When a customer clicks on this affiliate link, they will be redirected to the original company’s website or online store. Affiliate links are tracked by the original company’s website and are usually monitored at the checkout stage of the buying process. If a customer has successfully made a purchase transaction through the affiliate link, the system will detect whose affiliate link is used and will subsequently record a commission based on the percentage of the total sales price. This amount is then transferred to the affiliate or partner and will be recognized as income in their part.
How does Affiliate Marketing Help in Business Expansion?
If we take a look at the usual methods of expanding a business operation, it usually involves a lot of work regarding advertising and marketing. Companies would have to regularly produce materials in the form of banners, posters, flyers, and ads in an attempt to reach out to a different market. This would cost the company time, effort, and resources, which can quickly add up. Also, because this strategy is very common, it is quite difficult to stand out from the crowd to gain a competitive advantage. At the end of the day, most of the usual advertising and marketing strategies are ineffective. In contrast, the costs of affiliate marketing are incurred as and when the sales are successfully made. In other words, there are virtually no upfront costs. The amount of the commission paid is directly attributable to the respective sales transactions, and so monitoring is relatively convenient. This would mean that the overall cost of expansion could be reduced, saving the company some financial resources to be allocated for other purposes.
Why is Affiliate Marketing An Effective Expansion Strategy?
An affiliate system is effective because it pools the assets of multiple entities into one big project. For example, if your company partners up with an affiliate, you effectively take advantage of that affiliate’s existing customer base. Without having to do any form of advertising or marketing, you are able to broadcast your products and services to them. Affiliate marketing also offers a high degree of scalability. For example, if your company plans to open a branch elsewhere, you could easily partner up with an affiliate whose customer base is predominantly located around the area of your new branch. As a result, you won’t have to spend too much time, effort, and resources on doing market research or developing the most appropriate marketing plan. Instead, you immediately capture the existing customer base by working with a local affiliate.