A Not THAT Easy Start To Your Own Online Business
Let's take a realistic look at affiliate programs, what they
can and can't do for your business and how to maximize your
chances of creating a successful, long-term business with
WHAT IS AN AFFILIATE PROGRAM?
An affiliate program (also known as a reseller, associate,
referral or partnership program) is essentially a revenue-sharing
arrangement whereby you, the affiliate, receive payment from
the owner of a product or service that you promote on their
Affiliate programs are an excellent way for the new internet
entrepreneur to start an online business.
TYPES OF AFFILIATE PROGRAMS
There are various types of affiliate programs.
The most simple involves you, the affiliate, placing a banner ad,
graphic or text link at your site which is linked to the site of
the business you are promoting. This link is coded with your
unique affiliate ID so that the site visitor is recorded at the
target site as having originated from your site, thereby allowing
you to be credited with the sale.
Payment is generally a fixed percentage of the sale value
(commission) or "pay per click", where the affiliate is paid a
certain amount for every time a site visitor clicks on the link
at the affiliate's site, whether or not a sale is made.
The more sophisticated affiliate programs are multi-tier and
allow the affiliate to earn commissions not only on the
traffic they directly refer to the target site but also a
proportion of sales generated by their sub-affiliates.
BENEFITS OF AFFILIATE PROGRAMS
The greatest benefit of affiliate programs is that when you are
just starting out in your own online business you don't have
to worry about creating your own product or service. You just
promote someone else's and get a share of the revenue pie
for your efforts.
You also don't have to concern yourself with warehousing,
transport or logistics headaches. All of this is handled by
the business whose products/services you are promoting.
All you need concentrate on is driving traffic to that
business's website. This means that a high proportion of
your revenue is profit.
The owner of the product/service is also responsible for
collecting payment, customer service and the myriad other
details that come up on a day to day basis in running the
DISADVANTAGES OF AFFILIATE PROGRAMS
The main and obvious disadvantage of affiliate programs
is that it is the owner of the product/service who earns the
lion's share of the profit on the sale.
You're working on commission. You will NEVER earn by
way of affiliate program commissions as much as you can
earn by way of profits from producing and selling your own
As a result, affiliate programs represent a high
opportunity cost when you consider what you could
earn if you instead channeled the time and energy you
spend on promoting affiliate programs into creating and
promoting your own product/service.
For this reason, it does not make sound business sense to
rely solely on affiliate program income for the longer term
growth of your business.
Instead, think of them as a way of dipping your toe in the
water when you're first getting started, and a nice little
sideline once you've created your own product/service. Do
NOT build your business around affiliate programs with the
intention this will always be the backbone of your business.
You'll be stunting your own growth if you do.
CHOOSING THE RIGHT AFFILIATE PROGRAMS FOR YOUR BUSINESS
So, keeping in mind what affiliate programs can and can't
do for your business, let's turn to what you should look for
when choosing an affiliate program or programs to promote
in your business.
First off, and this is a cardinal rule, only promote those
programs which will allow you to create synergies with your
site. This means selecting programs that naturally
complement the subject matter of your site and that will
therefore be of interest and relevance to your site visitors.
This will ensure your prospects (ie your site visitors) are
pre-qualified which will result in a relatively higher conversion
ratio (the ratio of visitors to purchases) than would be the
case if your traffic is untargeted (which will be the case if
you promote unrelated products and services from your site.)
Quality In All Things
Keeping the need for synergy uppermost in mind, look
for quality programs first and foremost. The last thing you
want to waste your time, money and reputation on is
a shoddy product or service. There are just too many
quality programs out there to settle for anything less.
Stability of Company
Look for a company that's been around for a while and that's
reputable and stable (both financially and in its management).
Any reputable company will have full contact details readily
available so do your research.
Look for testimonials and references from other affiliates.
If the company you're interested is not forthcoming when
it comes to putting you in touch with other affiliates, move
Look for a professional, considered and detailed affiliate
agreement (contract). This shows that the company is
serious about its business.
Watch out for exclusivity clauses and other restraints.
Some affiliate agreements will require that you not promote
competing businesses' products and services. This is not
to say you should avoid such agreements. As a general
rule, it is your interests not to promote competing programs
anyway. Just be aware of what the agreement says on the
subject to avoid getting yourself into hot water.
Look also for an agreement that treats spammers harshly.
This protects not only the company but other affiliates as
well. The last thing you or any other reputable affiliate
needs is to have your reputation and the reputation of the
product/service you are promoting besmirched by these
sorts of tactics.
Promoting someone else's affiliate program necessarily
requires that you divert traffic away from your site and
towards someone else's. Make sure you're properly
compensated with a high commission structure. And be
sure to set up your link so that when the visitor clicks
on it, a new browser window is opened for the target site.
This at least keeps your site in front of the visitor so they
can go back to your site once they've finished at the site
your link has taken them to.
Look for affiliate programs that will credit you with not
only THIS sale but all other sales the customer may make
in the future. Many programs are set up so that the customer
is identified as "yours" so that when the customer returns
to the target site in three months time, the sale is recorded
as having been generated by you.
Include programs that offer residual commissions in your
portfolio. Good examples are webhosting services,
autoresponder services and the like where customers sign up
for a continuous service that requires periodic, regular
payments. You receive periodic, regular commissions as a
Tracking of Commissions
Look for programs that allow you real-time access to your
stats so you can keep easy track of your commissions.
Reliability of Payment
When checking with affiliate references, find out what the
business's record is on paying out commissions. If they're
slow or there appears to be a pattern of problems, keep
Frequency of Payment
Make a note of payment schedules too. Some programs pay
weekly, some monthly, some quarterly. Some only pay once
you accumulate commissions of a certain amount. None of
these arrangements are necessarily good or bad in and of
themselves. Just be sure you know what to expect.
Programs that Require Payment Up Front
Two words: MOVE ON!
Finally, take a look at what support the business offers its
affiliates to make sales. Do they provide resources such as
sample ads, banners, logos and the like? Do they provide
useful advice about maximizing your sales? A good affiliate
program provides affiliates with a LOT of support in these
MAKING MONEY FROM AFFILIATE PROGRAMS
OK, now you know what to look for in an affiliate program.
Here's how to maximize your sales of those products and
services and, therefore, your commissions:
Get Your Own Website
No ifs, no buts. DON'T rely on the you-beaut self-replicated
job the company provides all its affiliates. Link to that site
from your main site.
Get Your Own Domain Name
This presents a much more professional image. Many people
won't give the time of day to a business that thinks so little of
its prospects that the owner won't shell out 70 bucks for a
domain name. So mean business and look like it.
Get Traffic To Your Site (Duh!)
As a rough guide, you will need at least 500 targeted
unique visitors a day to your site to make reasonable money
from affiliate programs.
You Must Have A Site That Will Attract Repeat Visitors
If your website is nothing more than a splash page consisting
of little else other than banners for umpteen different affiliate
programs, forget it. Your site must be worthy of your visitor's
time and interest before you can even begin to think about
converting that visitor into a paying customer. So create a real
site with real content that will keep them coming back for more.
A personal testimonial will result in more sales than a mere
link or advertisement. So take the time and trouble to write
a personal endorsement of the product or service you are
promoting. And, of course, it goes without saying that in order
to write a personal endorsement, you must know that of which
you speak. NEVER promote a program you haven't first
purchased yourself. If you don't think enough of your program
to invest in it, how do you expect to persuade others to?
Promote With Your Sig File
Include a link to your site in the signature of every email you
Promote In Your Own Ezine
Finally, if you're not already publishing your own ezine or
newsletter to stay in touch with your site visitors, start. It's
a great way to promote not only your site but also the affiliate
programs you promote from your site.
MAKING SERIOUS MONEY FROM AFFILIATE PROGRAMS
The only way of making SERIOUS money from affiliate programs
is by creating your own product or service and recruiting affiliates
to sell for YOU.
The affiliate program phenomenon is one of the Internet's true
success stories. It provides a toe-hold for the would-be internet
entrepreneur to begin a real, live business of his or her very own.
But the real beauty of affiliate programs lies not in what they can
do for you, as an affiliate, but what they can do for you, as a
recruiter of affiliates for your own program. By all means jump
on the bandwagon and start promoting other people's products to
get your start. But don't wait too long to start developing your
own product line. There is a ready-made salesforce numbering
in the millions ready and waiting to sell it for you.
About the author:
Elena Fawkner is editor of A Home-Based Business Online
practical ideas, resources and strategies for your home-based
or online business.
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