What is an 'Affiliate Network'

An affiliate network is a group of associated (or affiliated) companies that sometimes offer compatible or complementary products and will often pass leads to each other. At times, affiliated companies may not operate in the same industry. They may offer cross-promotional deals, encouraging clients who have utilized their services to look into the services offered by an affiliate. A company looking to acquire new customers will pay members of its affiliate network for the sales leads that they provide.

BREAKING DOWN 'Affiliate Network'

Companies use affiliate networks if they do not have the available resources to create a significant outbound sales effort, if they do not have a substantial advertising presence or if they want to tap into groups of potential customers in an unrelated industry. Affiliate networks can allow a business to focus on its core competencies rather than on obtaining the contact information of interested parties.

Example of an Affiliate Network

For example, Dave's collision, Mike's Tire, and Andy's Attorney Services are an affiliate network. All of the business owners know each other and are confident the others are experts in their field and treat clients fairly. Although they offer different services, they are potentially related services, creating an opportunity for sales leads or business referrals to be passed between the businesses. Somebody who comes to Dave's collision may have been in an accident and may need new tires, or could be injured and require the services of an attorney.

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