Over the past year I’ve heard the occasional opinion expressed that affiliates are overpaid. After all, they just post a link with a code, do nothing, and many make 50% or more of any sales they send — while the retailer is working their ass off day and night. Isn’t it a complete waste that the job being done by a guy making hundreds of thousands, or even over a million dollars a year could be done by a cookie-cutter employee being paid $35,000 a year? Right?

I was reading a very good blog post at Revenews which illustrates why the affiliate marketing business model works — and works well.

some merchants tend to think that they should pay the affiliate less. the problem with in-house teams is that they don’t really care - it’s not their money. If they lose it, they have excuses, if we lose our money, we have less money for next month - reality bites.

Additionally, affiliates add a critical element to online success: traffic. Traffic = money. Affiliates are essentially investments that send pure profit back to online retailers. They have traffic sources, they know where to get them, and they are going to send it your way. If that $35,000 a year employee had those same traffic sources, well, he wouldn’t be making 35 grand a year or be working for you.