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Link Exchange - How it works?
Link Exchange   
Link exchange is a marketing technique in which two or more websites offering similar services exchange text or banner links. It is considered the most effective form of search engine optimization (SEO) because it improves a site’s ranking with the least effort and cost. If you have an online business, regardless of the size, link exchange is certainly one of the best ways to promote your company.

Link popularity
Most search engines rank websites in terms of link popularity. The more inbound links there are to your site, the better your chances of appearing on the search page. A simple way to achieve this is to post links on blogs, forums, and other free sites, but that takes a lot of time and effort. With link exchange, you can get dozens to thousands of inbound links without having to set up each one.

Better Traffic
Each inbound link acts as a door to your site. Post your link in an online forum or within an article, and people are bound to follow it. The more visitors you have, the better your chances of selling your product or service. And it’s not just the number of site hits: because your links appear in relevant pages, you can be sure your visitors are interested in your business in the first place.

Free vs. Paid
Link exchange is usually free when you negotiate directly with other site owners.  But when you use a link exchange program, there is usually a monthly or one-time fee depending on the contract. Companies such as Free Relevant Links offer basic link exchange for free, but provide additional benefits to paying customers. These include more SEO strategies, search engine placement, and ranking reports.

Types of link exchange

There are different ways to trade links with other sites. Here are some of them.

Reciprocal: This is the simplest and most popular form of link exchange. It involves two websites exchanging inbound links—Site 1 posts a link to Site 2, and Site 2 places a link to Site 1. It is also called a mutual or two-way link exchange.

Non-reciprocal: This is a one-way system in which a site links to another without getting any inbound links in return. The site owner usually buys the links from another site good traffic and PR. For example, if Site 1 enjoys excellent traffic, Site 2 can pay Site 1 to post links to improve its own rankings. Non-reciprocal links are more valuable than reciprocal.

Indirect non-reciprocal: This method requires at least three websites and is commonly used by those running multiple sites. Basically, Site 1 links to Site 2, and Site 2 links to Site 3. Sites 1 and 3 are owned by the same person. This way, the links given are non-reciprocal, so they are given more importance by search engines.