Getting To Grips With Affiliate Marketing Lingo

Affiliate marketing is essentially the online variation of a commission paid salesperson. Your job is to sell a company's services and products on the internet. The company will then pay you a commission based upon the total amount of the sale when somebody purchases that service or product from you..

Promoting the right types of products and services with affiliate marketing programs can provide great income streams as part of a wider online business model. But, as with any industry, there are a fair amount of jargon, special words and expressions that are used in the affiliate marketing industry. Here are some simple explanations on some of the common ones that you'll read and hear about.

[caption id="" align="aligncenter" width="500"] Getting To Grips With Affiliate Marketing Lingo[/caption]

Conversion Rate.

This is amount of people that you send to a website that actually convert into customers. Your conversion rate depends on your costs to send the traffic to the website and the commission you get per sale. Obviously, the lowest possible conversion rate is your break even point, where the costs of your advertising are exactly covered by the commission you earn.

Earnings Per Click (EPC).

The EPC is used to determine the average earnings generated as a result of 100 clicks on an affiliate marketing link or advertisement. You can use it to measure one affiliate program against another. If a program has a $10 EPC, that means that for every 100 people you sent to that product owner's website you should earn about $10 in commissions.

Upsell.

This is when the product owner offers follow-up products to your referral customer. If there are upsells, back end products or one time offers, it means you can break even on your advertising costs for the initial offer, because you'll increase your commissions on the other products. Just make sure that you will receive a percentage commission on any upsells.

Refund Rate.

All good businesses have a refund policy and it's no different for the affiliate marketing business model. The refund rate is normally calculated for every 100 people who buy the product and then ask for a refund. A good product should not have a refund rate of over 10%. Remember that if a product owner has to refund a customer, you won't get paid any commission.

Setting up an affiliate marketing business is great way to start generating income via the internet. If you take steady action and watch market trends and demands, you can quickly enjoy the rewards.

Guest Post By Jon Allo