AFFILIATE MARKETING

AFFILIATE MARKETING INTRODUCTION

Affiliate marketing is a “no-risk” partnership that allows you to promote another company’s product or service on your website to earn a percentage or amount on the sales made through your site. Sometimes the merchant may pay you even if someone from your website visits their site, and/or simply registers or fills up an online form.

You might post a banner on your website that links to the Merchant or Affiliate Program’s site, or you might publish an article about the company and their products in your newsletter.

Generally there is no fees for you to join, and you can leave the program whenever you choose. Affiliate Marketing is also know as Associate Programs.

Win-Win for both

This system is a win-win situation for both the Merchant and the Affiliate

1. The Affiliate Program and Merchant gets a “no-risk” advertising (they don’t pay you unless you send someone who pays them - in most cases)

2. Being the Affiliate, you get the opportunity to earn easy additional income without any hassles of production, packaging, shipping, or customer service.

The Amazon.com Affiliate Program -

Amazon.com is the pioneer of affiliate programs. They were the first to start this form of marketing on the Internet. In fact, this system was not the brain-child of someone working in Amazon. Amazon had put up a “Suggestions?” link on their site, and an old lady had the original idea of Affiliate Marketing! She submitted this suggestion to Amazon - and within a few months Amazon sales were soaring and a high percentage of their sales were derived from their Affiliates. Amazon now has hundreds of thousands of affiliates all over the world.

The reason for the Amazon affiliate system being such a big success is basically because “content and commerce” get tied together. Amazon has books for sale in every conceivable topic. And at the other end people have website that talk about every conceivable topic.

So what happens? Well, lets suppose you have a homepage on say geocities and you love marine life. You continually post information on marine life, latest happenings and findings etc. People who are interested in fish will visit your site, because you have some interesting content that they may want to read, or maybe they want to communicate with you. So once you have a site with a lot of useful marine life content - you can simply become an Amazon Affiliate (for free) and start promoting marine life books found on Amazon - that are interesting and a must have for all marine life lovers. Now, since your visitors are all marine life lovers, they will see your recommended books, and if they like it they will purchase it. Amazon will track the purchase and send you your commission, which ranges from 5% to 15%. This is a perfect example of content and commerce working together to bring you money.

Your own Affiliate Army

Amazon has programmed its own Affiliate System software. If you are a merchant you could develop your own software too, or you could buy some of the basic ones that are available for free and for a fee. You can easily get hold of a developer who knows how to configure scripts, and ask him to install an Affiliate Program on your website. Having your own Affiliate Program has its advantages, but the pitfall is how do you get webmasters to signup for your Affiliate Program? IF you have a member community, then you could simply email them and let them know about it. If you get a steady flow of traffic to your site, you may simply put up a “Earn Cash _ Join our Affiliate Program” link or banner on your homepage. Alternatively, you could approach another site that has a large membership base and ask them to promote your affiliate program for a fee. If you don’t want to shell out money, an alternative would be to setup a 2-tier Affiliate Program.

A 2-tier affiliate program is just like those MLM systems. Basically, lets assume you know a webmaster who has a large list of emails of his members, and you would like to get the word of your Affiliate Program out to his list, without shelling out a dime. In this case you would setup a 2-tier Affiliate Program and you may then approach the webmaster with the following proposal -

1. You sign up for my Affiliate Program for free and become my Affiliate

2. For every sale I make from visitors you send me, I will give you 10%

3. If you happen to send me a visitor who signs up as an Affiliate, then I will give you 5% of every sale his visitor traffic makes with my Affiliate Program!

Bingo! This webmaster, will be very eager to now promote your 2-tier Affiliate Program to his full list of members, because if they become Affiliates he can earn a lot of income!

Using Free 3rd Party Affiliate Programs

There are Affiliate Network websites like commissionjunction.com and clickbank.com that basically act as the link between Merchants and Site operators - promoting the merchants products.

They have their own Affiliate Tracking System, that works with both Affiliates and Merchants. As a merchant you would sign up with them, and they will give you a piece of code that you need to give your potential Affiliates. Your Affiliates will then put that code into their webpages. When a visitor to their pages clicks and comes to your site to make the purchase, the intermediary site like Commission Junction would track the sale made and commission earned.

Going to intermediary sites like these, has its own advantage and disadvantages…

Advantages:

1. Most sites have a ready large base of Affiliates to whom they will promote your website when you sign up. This means instant Affiliates for you.

2. Since they are recognized intermediaries, Affiliates who sign up are sure that the system is fair and that you are not ripping them off, by not giving the correct commission.

3. Its free!

Disadvantages:

1. Some Affiliate Network sites (like commission junction) may charge you a hefty upfront fee to join as a Merchant and get started. Although, there are many other’s that are free (example: ClickBank)

2. They may take a % commission / cut on the sale made, as a facilitators fee.

I would suggest you start out with signing up for a thrid party Affilaite Program like ClickBank.

Alternatively, if you want total control and are confident that you can tap a large Affilaite Army base, you can install (or get a webmaster to install) your own Affiliate Program script on your website. Visit Hotscripts, and search or go to the Affiliate Programs category, to find which Affiliate Script works best for you and your budget.

Once you have your Affiliate Program in place and all setup, you can go to refer-it.com to list your Affiliate Program and describe benefits / commissions. Refer-it.com is basically a web directory of Affiliate Programs found on the Internet. It is visited a lot by webmasters and people seeking to monetize their website traffic by signing up for appropriate Affiliate Programs. By listing your website and affilaite offer on refer-it.com , you’re in the right place! … and you will be reaching out to your target audience.

One issue that these webmasters will ask you before they insert your Affilaite Tracking Code on their site, is that – “what if I send you a visitor today, who sees your site but does not make an immediate purchase, but comes back after, say a week, and buys something? Do you have the ability to track that and give me the sales commission? Reasoninig - because I was the one who sent him to your site in the first place? Also, what if a customer I send you, buys again and again from you? Do I get a commissions on repeat sales?”

The answer you can give them will depend on how good your Affiliate Program software is. So while selecting your Affiliate Program software make sure it covers all these points and rewards repeat purchases. The software would typically use something known as “cookies” to track this.

How much Commission should one pay per referral sale?

This is really an answer that will defer from merchant to merchant. It depends on factors such as, the cost of the product for the merchant, and what the competition is giving, how much can a typical visitor afford? etc. Stuff like ebooks, have a zero cost to merchant associated with them, and things like subscription to a website service (such as dating) have almost zero cost. You can pay your affiliates a % commission or a flat $ amount. If you are selling an downloadable electronic product like an ebook or software – I would strongly recommend you to pay out as much as 75% of the sales to your affiliates. This will get them all excited and they will put in a much larger effort to market your product for you – over their other third party products.

Some Terminology

Affiliate Programs often talk about something called a CPA or CPS.

CPA is Cost Per Action. This is the amount a merchant would pay their affiliate, if their affiliate sends them a visitor who comes to their site and performs an “Action“. This action could be something like - fill up a form to register for services, or say, play a game. CPR is Cost Per Registration (and could be classified as a subset of CPA, since it is an Action).

CPS is Cost Per Sale. This is the amount a merchant would pay their affiliate per sale made, to a visitor that the Affiliate sent the merchant. This could be a percentage or fixed $ fee.

All these values are displayed in the 3rd Party Affiliate Program Software statistics or Web Interface, which Merchants and the Affiliates have access to. These statistics will directly decide the actual commissions earned.