You’re scrolling though your social media, and you come across a post from one of your favorite brands. Maybe they’re offering an epic sale, or they shared a new product that you want to try out. Whatever it is, you click on the link, and before you know it, you’re on the checkout page. But then, something strange happens.
Instead of taking you to the product, the retailer brought you to a third party website that handles all the payment processing. So now you’re looking at a whole different sort of website than the one you signed up for. One that you probably didn’t even know existed. How did this happen? What is a third party payment website, and how does it make money?
To find the answers to these questions, and more, we need to dive into what is known as the middleman model. So let’s do that…
What Is the Middleman Model?
Retailers, brands, and affiliate marketers often use a middleman model to connect buyers with products. In a traditional retail model, a brand shops for the best prices possible on products in bulk and then tries to sell them at a profit. However, the profit margins for these large-scale purchases can be slim, so brands often look to smaller retailers and individuals to help them out.
In this model, known as the middleman model or affiliate brokerage model, companies like Rakuten and Shopbop are what is known as a storefront or an affiliate marketing platform. They’re a place where brands, retailers, and individuals can connect and where transactions make sense. Let’s take a look at how this model works.
The Three Types of Affiliate Marketing Platforms
Rakuten and Shopbop are just two of the many companies offering an affiliate brokerage platform. These are popular choices for brands and eCommerce stores because of the flexibility they provide.
If you’ve ever shopped at Target or Walmart, you may have walked past a small appliance or houseware section. If you’re curious about taking a look, those are some of the products that are available on Rakuten or Shopbop, respectively.
You may also have shopped at a luxury goods store that was having a sale. If so, you may have come across an affiliate marketing network, which is what creates the middleman model. In this scenario, you’re simply being brought to the retailer’s website to learn more about the product, and then you’ll be directed to the affiliate’s website to make the purchase. When the product is purchased from the retailer’s website, the affiliate gets a small commission.
Because of this structure, brands don’t have to worry about high prices or slim margins. They just have to focus on bringing customers to the affiliate’s website, where the products are more expensive but make much more sense.
To learn more, visit this special link to get the complete lowdown on the three types of affiliate marketing platforms.
How Does It Work?
In a nutshell, the affiliate’s role is to drive traffic to the retailer’s website. Once the customer makes a purchase or shows interest in a product, the affiliate gets paid. Simple enough.
To attract potential customers to their site, affiliates usually run ads and offer promotions. They could also write blog posts and create social media accounts to gain popularity and grow their business. Ultimately, the aim is to get customers to click on a product or service that is relevant to what they were looking for.
When a customer clicks on a sponsored blog post or Instagram story featuring a relevant product, that business gets the chance to connect with that audience. Sometimes businesses will even send you a press release to publish on your website in exchange for a mention.
Why Use an Affiliate Marketing Platform?
Even if you’ve never tried it, you’ve probably heard of affiliate marketing. Maybe you’ve seen ads on social media, email, or web browsers encouraging you to click on a product or service that you might find interesting.
If so, you’re an affiliate marketer! You make money online by encouraging people to click on products and make purchases using affiliate links and tools.
Because of the nature of the beast, affiliate marketing can be quite the lucrative way to make money online. According to HubSpot Blogs’ research, nearly 20% of users on a marketing platform like HubSpot earn a living from affiliate marketing. That’s nearly 500 million users around the world. If you’re looking to make a steady income online, you don’t need a great deal of experience. Just get started and learn from the pros.
Do You Use An Affiliate Marketing Platform?
If so, which one do you use? We’d love to hear about your experience. Just leave us a comment below!