Affiliate Relay Marketing

Published Date: 02 Nov 2017

Affiliate relay marketing has become one of the most considerable alternatives to companies depending on e-commerce as a major marketing strategy. It has been called relay marketing due to the principle of relaying the sale to the supplier who is responsible for delivering the product directly to the customer, where the affiliate company responsibility is to reach customers in geographically scattered places and convince them to buy from its own website, as a consequence, the affiliate company sends the sales order to the supplier who should deliver the product directly to the customer and get paid by the affiliate company after making sure that the product has been effectively received on time by the customer, figure(1) illustrates the five stages through which the product pass before the supplier getting paid. Hence, the affiliate company takes percentage of the product sales value which has been sold through its website, this is also known as "pay for performance marketing".

Why is the affiliate marketing successful? (The win-win relationship)

To verify the affiliate marketing successfulness, assume that there is a company (supplier) who produce a large number of products, this company has to advertise its products through coloured printed catalogs, TV advertisement and, sometimes, radio advertisements, all of which are to get the buyer interested in the product and potentially buy through the internet, telephone or to come and in person, in this case the company is paying for the marketing aspects as well as for the marketing research which is needed to know what type of advertisement is the most suitable for the particular type of product. This company assumes that the profit associated with the mass of sales is vast enough to cover all the advertising expenditure, but what if it did not? Thus, this company is taking an immense risk all the time.

On the other hand, assume that another company (affiliate company) offered to advertise, motivate, and convince the customer to buy the supplier's product through its website, hence, the business will inevitably flourish. However, the affiliate market will deduct an agreed percentage of every product value being sold through its website. The affiliate company will tolerate the cost of the product marketing; if the marketing strategy did not succeed the affiliate company would lose money, by contrast, if it did fine, the affiliate company would make an immense profit without any conditions or limitations to how much should it spend or earn.

All in all, in the traditional marketing approach the supplier is responsible for paying all the advertising expenditure hoping to sell enough products to cover these expenditures (high risk). However, in the affiliate marketing approach, the affiliate company is responsible for all the marketing expenditures to sell as many products as possible hoping to make a high profit without manufacturing or even seeing the product. Therefore, the supplier company is willing to pay commission to the affiliate company if his product is increasingly being sold, and the affiliate company is motivated to advertise and do efforts to sell the product knowing that it will gain a commission on every successful trade. This relationship is called the win-win relationship, where every side wins, gives the opportunity to affiliate marketing to flourish, remain and evolve over the time (Duffy, 2005).