Affiliate programs can generate sales for you in two ways. One side of the affiliate program coin “brings” traffic to your website and secures sales of your own products and services, while the other side “sends” traffic from your website to other websites and generates income for you on sales of their products and services. Although affiliate programs are not ideal for all situations, when they are, they generally work extremely well.
If you look at the site map of most websites selling a product or service, you will find a link to a page that pitches their own affiliate program. Amazon built their business with an affiliate program (they call it an “associate” program) that flourishes to this day. Although I don’t know how many affiliates Amazon has currently, in June of 1998, they issued a press release announcing that their number of affiliates had surpassed 60,000. That was 11 years ago. I would guess they now have over 1 million affiliates!
This is the last element in our Web 2.0 Marketing series as shown on the graphic below. It is primarily focused on the side of the coin that deals with marketing your products and services through an affiliate program. However, we will also describe the other side so that you have a more complete understanding of how affiliate programs can work. However, there simply isn’t enough space in this article to go into affiliate marketing in depth. You can find plenty of information on the internet about this subject.
Using an Affiliate Program to Market Your Products/Services
Like Amazon, you can create your own affiliate program to market your products and/or services. The objective is to obtain affiliates who will post ads, banners, or text links on their website or in monthly newsletters that link back to your website. Each link is unique to the affiliate (includes an ID code) so clicks and sales can be easily tracked. Each time someone clicks the affiliate’s unique link and/or makes a purchase at your site, the affiliate earns a commission. You can set up your program independently or you can use third party services that will handle all of this for you. We will touch on this later.
Some affiliates are extremely skilled at marketing. In some cases they have no products of their own but just market other people’s products. This is the other side of the coin that we will address later in the article. Just imagine if you had 1,000+ affiliates marketing your product. Do you think this could have a positive impact on your sales? And best of all, it costs you hardly anything unless you receive a sale and then the commission is deducted from the revenue received from the sale. In other words, it is performance based advertising. Also, if you have been following our series, imagine what 1,000+ affiliate links back to your website will do for your search engine optimization (SEO)!
Of course, you will need to price your products/services at a level that will allow you to pay affiliates a commission and cover processing costs. As you read about the other side of the coin, you will see that the higher the commission, the more attractive your program will be to potential affiliates. On the other hand, if you have to price your product too high in order to pay a higher commission, your target market probably will not buy and as a result your affiliates earn no commissions. So you will need to find a balance.
Many websites selling digital downloadable products use a service like ClickBank.com as it not only provides affiliate software, it also provides a merchant account service like PayPal. The cost is low ($50 set-up and 7.5% plus $1 for all services) but the product must be digitally downloadable or a membership of some kind. You can check out all the details at their website.
Commission Junction (CJ) is very popular for large high producing websites like Dell, HP, Expedia, Walgreens, Staples, etc. However, they require a minimum monthly sales volume of $50,000, a hefty set-up charge, monthly fees and a percentage of commissions. While they offer many advantages over doing this independently, unless you are large, it is probably out of your budget range.
Nonetheless, using a service that provides both the software and an affilate network has its advantages. Affiliates trust third party services more because they know there is no incentive to not record sales properly and they are assured of receiving commissions in a timely manner. It makes it easier to build an affiliate network because your program is showcased with all of the other affiliate programs using this service. Websites wanting to implement an affiliate program find it much easier to do so through a service that already has everything figured out and will help you set up your program.
However, other alternatives are available where you can set up an independent affiliate program. Software is available from companies such as has offers ($0 set-up and $0-$1,000/month), My Affiliate Program ($2,500 set-up and a monthly fee), ClickInc ($30-$400/month) and Affiliate Shop ($25 set-up $100-$300/month plus up to 20% of commissions). Software management and maintenance are included.
You can purchase software for a one-time fee from companies such as Affiliate Wiz ($1,000), OSI Affiliate ($100), iDev Direct ($100-$300), and others. However, it falls on you to manage and maintain your software.
No matter which avenue you choose to pursue, it is important to make your decision based on more than just price as the features and benefits are not the same.
What products and services are best to sell through an affiliate program? Any product or service that can be sold through some sort of website shopping cart is perfect for an affiliate program. Products and services that require pre and/or post-sale communications between the website owner and the customer are not ideally suited for an affiliate program unless you are paying for clicks/leads rather than sales.
Here are a few tips for building your own network of affiliate marketers:
- Design your program well. Consider asking affiliate marketers what they look for in an affiliate program and include as many of these elements as possible.
- Make it easy to locate information about your affiliate program and make sure your offer is appealing.
- Create compelling ad buttons, banners and widgets in a variety of standard sizes, colors and messages so it will complement the blog or website of the potential affiliate regardless of their theme.
- Add your program to all of the affiliate directories you can find.
- Post your program in groups at LinkedIn, Yahoo, Facebook, etc.
- Take care of your affiliates as though they were the lifeblood of your business because they are.
Using Affiliate Programs to Sell Other Peoples Products
If you search the web for affiliate marketing, you will find about 16 million listings. It is very popular! This is all that many folks do to earn a living and if they are good at it, they make a very good one! This is the other side of the coin I mentioned previously. Affiliate marketers select products and services they wish to promote based upon product demand, pricing and the commissions they will be paid.
Some websites sell their own products through affiliate programs and join affiliate programs from complimentary websites. For example, an online fishing tackle website might join the affiliate program of an online archery website. Many people coming to one website may have an interest in the other and by being an affiliate it provides an opportunity to earn revenue from products you don’t sell.
Summary
Allow me to reiterate that most websites with products/services that are ideal to market through affiliate programs, do so. When you find these websites, check their site map for an “affiliate” link. A big advantage of affiliate programs is that they cost very little until revenue is generated through the sale of your products/services. In addition, the ads, banners, and text links on the websites and newsletters of your affiliates will generate a lot of traffic back to your site and increase your own search engine rankings (SEO).
Many people depend on affiliate marketing for 100% of their income and are very good at what they do. If you build your own affiliate program so that it is compelling to these people, they will promote your products/services and you will flourish.
Those that enjoyed this article, also enjoyed:
Web 2.0 Online Marketing Series – Overview
The Elements of a Web 2.0 Website
Web 2.0 Blogging For Business
Web 2.0 SEO – Search Engine Optimization
Web 2.0 Email Marketing & Autoresponders
Web 2.0 Pay-Per-Click Advertising
Web 2.0 Online Press Releases & Articles
Web 2.0 Forum & Blog Commenting
Web 2.0 Professional & Social Networking
Web 2.0 RSS Feeds and Widgets
Web 2.0 Video & Podcasting
Web 2.0 Wikis & Open Source Marketing
Web 2.0 Bookmarking & Reviewing Sites
If you would like to contact me, you can do so by emailing me at mike.clough@bestbizpractices.org or visiting my LinkedIn page.
Posted by: Mike Clough
