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In any business or indeed any specialist topic there tends to be a certain style of language used and in many cases some jargon is developed that might not be easily understood by people not familiar with the niche. In this article I am going to share with you my affiliate marketing glossary of essential terms to try to demystify this great opportunity for creating an online business.
When you are promoting products as an affiliate you will find that there is a lot of jargon used, including a number of abbreviations and statistics that you may not understand right now.
However, it’s important that you do understand what these mean before you start promoting as they will help you find the best products to promote in your niche, which can help save you a lot of time and money.
OK, lets get stuck in to looking at this glossary of affiliate marketing terms.
Let’s start by looking at the 3 types of affiliate marketing
1 CPA - Cost Per Action
This is when you’re paid for someone taken action such as filling in a form or making a phone call.
2 CPS - Commission Per Sale
This is when you earn a commission for every sale you make.
3 CPL- Commission Per Lead
This is when you are paid a set amount for each new lead/email sign up you generate.
Now lets have a look at some statistical terms
4 EPC – Earnings per click
Earnings per click is calculated by taking the total earnings you have generated over a period, and then dividing that by the number of clicks you have generated for that same period.
If you send 100 clicks to an offer
And you earn $100 dollars in total
Your earnings per click equals $1
5 Conversion Rate
This can be calculated by dividing the number of conversions by the number of clicks.
For example, if you had 50 conversions from 1,000 clicks, then your conversion rate would be 5%, since 50 ÷ 1,000 = 5%.
6 Commission Rate
This is the percentage of each sale that you will earn as a commission
For example, if a product is priced at $100 and you earn 50% commissions then you’ll receive $50 for every sale you make.
7 Gravity or Pulse
The Gravity or Pulse score is an approximate indication of how many affiliates have successfully promoted this product and is a sign that it’s converting well. The higher the number the better.
I have heard it described in terms of the number of affiliates who have made at least one sale of the product in the previous 30 days.
8 Initial $ sale
This is the average amount of money that you would receive from just an initial sale alone
9 Avg $ sale
This is the average $ amount you would receive which includes the initial and rebill sale. Rebill sales come when a product has a monthly subscription included after the initial sale.
Pro tip: These are the best kind of products to promote as you get paid for the initial sale but you keep getting paid month after month until the customer cancels – with no extra work on your part!
10 Avg Rebill Total
This is the average amount of money you would receive in recurring payments after the initial sale. These recurring payments are usually paid to you on a set date each month.
11 Avg % Sale
This is the percentage commission rate that you get paid from the initial sale.
12 Avg % Rebill
This is the percentage you will receive in commissions for recurring payments. i.e How much you will receive each month from a single sale for as long as that customer remains a member and pays their subscription each month.
Sometimes this is just the same value as the Avg % sale but often it can vary and you might find a product that offers say 50% commission on the initial sale and say 25% on each further monthly payment.
13 Visitor Value
Visitor Value is the average return for sending a prospect to the vendor's sales page.
Let’s illustrate this with an example. Let’s say you are promoting a product that offers $100 commissions. Imagine then that you as an affiliate send 100 visitors to the sales page for the product and make 2 sales which earn you $200. The visitor value for that product would be your $200 return divided by the 100 visitor you sent which equals a visitor value of $2.
So you earn $2 for every visitor you send to this product.
14 Refund Rate
This is the percentage of customers that have requested a refund after purchasing the product. The lower this number is then better. A low refund rate means that customers love the product.
And there you have it. There are other terms that you might come across as an affiliate marketer but if you are familiar with the 14 I have just described then you should have no problem with running your own affiliate marketing business.
So how do you go about creating your own affiliate marketing business?
One of the best ways to do this is to learn how to set up and run an affiliate marketing business that promotes products which are proven sellers. If you are wondering how to go about finding these products then look no further.
I have looked at hundreds of affiliate products – some great, and many - absolutely terrible. I complied the best products i could find into a digital report called “The Top 100 Affiliate Programs” and I give it away completely for free on my own website
Another amazing resource that I couldn't have built my affiliate marketing business without is Wealthy Affiliate.
Wealthy affiliate is the biggest and best website anywhere online for learning everything there is to know about the business of affiliate market.
Thank you very much for reading this article and I hope you found it useful. If you have any questions about any of the terms I have discussed or you need clarification on any other affiliate marketing terms then please just leave a message in the comments section below and I'll get back to you as soon as possible.