Why would anyone do affiliate marketing?

[new wave]

Lets just say I work for a pizza shop and they agree to pay me $5 per customer.

Ok, so I go out and I advertise and by the end of the week I get 15 customers ($75)...

Here is my question..NOW that the customer knows about the pizza shop I've been advertising, WHY would they (the customer) ever go through me to get the pizza instead of just go straight to the restaurant itself?

unless I'm wrong, the answer is: THEY WOULDN'T

It looks like the merchant is the big winner here and the affiliate marketer gets royally screwed because now his customers can just go around him straight to the source. In the end the marketer is forced to constantly advertise to bring in a 1-time customer... doesn't seem very worth it.

or do I have it all wrong?

[Sportsfan12]

Hi New Wave,

It's not that you have it all wrong as it is always better to be the owner, but do not underestimate the power of making money with affiliate programs.

When I started out as an internet marketer, I tried selling my own product and discovered it was harder than I thought. I then tried CPA and got some cash coming in as it did not require people to pay for anything. They simply provided an email address and I got compensated.

Next, I tried some affiliate programs and that worked for me too. No, you don't get 100% of the sales, but you don't have to worry about creating the product/service and you are usually provided with material to help you sell the product/service.

Maybe it is not for you as there are many ways to make money online. Check out my blog in my signature

[DigitalPalette]

new wave, I see where your coming from and what your trying to say my friend.

You have to understand affilate marketing is good for both the business and the marketer. This is because you get paid for redirecting someone to them and you don't have to pay a cent to run that business.

Using your example of pizza, let us say the pizza costs $10. A pizzaeria owner makes ana greement with you that for every pizza sale you bring to him you will make $2, or 20% of the full cost. Yes this will be one time because they will not keep coming back to you as the middleman, but think about the other costs. For instance with the equipment, employees, utilities, and misc. costs let us the fixed cost of the pizza was $4. $10(selling price) - $4(fixed cost) = $6(profit to owner). Now your $2 payment is actually 33.3% of the profits, or 1/3. That is a very healthy "slice" of the "dough", my friend .

[new wave]

^ yes but after that I lose the customer, but the restaurant can keep customers coming back for years if they're satisfied. So I make 2 and the pizza shop makes a lot more in future sales.

[Sportsfan12]

Well, when you do affiliate marketing, it is important to build a list so you can market to them over and over with other products.

[DigitalPalette]

^ yes but after that I lose the customer, but the restaurant can keep customers coming back for years if they're satisfied. So I make 2 and the pizza shop makes a lot more in future sales.

Yes, your not the business, your the marketer. I think you have confused roles here my friend. Would you expect a guy who owns a billboard to get a percentage of each business he allows to advertise on his billboard? Doesn't make sense.

[carlenesky]

New wave,

You can look for other customers again. Both the owner and the marketer gains profit here. Also I think others want to be affiliate marketers because they only have to promote the product without any penny comes out on their pocket but then can earn money with it.