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Affiliate Marketing: The Vendor's Perspective

Dec 26, 2007
When new internet entrepreneurs first get into the game of affiliate marketing, the question of why a vendor would offer to pay a commission often surfaces. In the realm of digital products, when the commissions earned can be as high as 75%, affiliate marketers wonder where the incentive for the vendors lies. The answer to this question is two-fold: in addition to simply expanding reach in a market, vendors also use affiliates to generate the leads that they will use to target more expensive products.

While it appears on the surface that a vendor simply pays large commissions in order to expand the sales reach of a product, the answer to this can often go much deeper. While expanding the reach of a product indeed is a reason for allowing affiliates to sell a product, the vendor may have other ways to monetize the sale of a product that marketers fail to recognize.

For example, some product creators do not bank on making money on the sale of a product (or the "front end"), but instead see each sale as a lead for a much bigger sale. In many cases, the vendor will attempt to sell more expensive products and/or coaching to those that purchase the product. Because affiliates are not compensated for these upsells, they are often completely unknown to the affiliates that generate the sales.

It is important, however, for affiliates to familiarize themselves with the "back end" marketing that the vendors may use. It is important to do so, because what a vendor does can affect the image of an affiliate. If one recommends a product without knowing the backend upsell, the image of the affiliate can be adversely affected. If the front end product requires the purchase of a backend product, or the secondary product is of low value, it can reflect upon the person that referred the customer to the company. It is for this reason that the marketers should make themselves aware of the vendors' attempts to sell additional products to existing customers.

In some cases, the vendors' motivation for including an affiliate program may simply be to reach customers that they solely could not reach. This ultimately is the goal of affiliate marketing. However, marketers should be aware of vendors that use increased volume to upsell end users and sell more expensive goods without the knowledge of the affiliates. This lack of knowledge can come back to affective the image of the affiliate, whether positively or adversely.
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