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Affiliate Programs

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How Do Affiliate Programs Work?

An affiliate program is a partnership with an online merchant in which the affiliate earns a commission for referring sales and/or leads to the merchant’s online store.

Affiliate programs are also known as associate, referral and partner programs.

From a merchant’s perspective, partnering with affiliates is an inexpensive marketing strategy to increase sales, drive traffic, generate qualified leads and extend brand reach.

Click here to join the best affiliate programs

Affiliate marketing:

is as easy as 1 - 2 - 3:

  1. You join the affiliate program and place links on your site, or in your newsletter.

  2. Your visitor clicks that link and buys a product, service or fills out a form.

  3. You earn a commission for sales and/or leads generated through your links.

3 types of commissions:

  1. Pay-Per-Sale: Pay-Per-Sale programs are also known as Partnership and Percentage Partners programs. These programs pay either a fixed dollar amount or a percentage of sales generated by your links.

  2. Pay-Per-Lead: Earn a set amount whenever your customer fills out a survey or requests a quote or information.

  3. Pay-Per-Click: Pay-Per-Click affiliate programs are similar to Pay-Per-Lead. Essentially you are paid each time one of your visitors clicks on the link through to that programs site.

How does the Merchant know that the visitor came from YOUR site?

As an affiliate you will be assigned a special link coded with an ID that is unique to you.

Software on the merchant’s site tracks sales and leads generated by that unique affiliate link.

By attaching your affiliate link to a banner ad, small graphic or a text link you earn a referral fee from every sale generated through that link.

SuperAffiliateHandbook

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In her down-to-earth, sincere and often humorous style, Rosalind Gardner guides you through the entire process of building an affiliate marketing business on the 'Net. In 236 pages, and more than 68,000 words, you'll learn how to pick the best programs, negotiate a commission raise and save time, money and effort on everything from affiliate software to web hosting. To learn exactly how she does it, Click Here.

An affiliate business is one of the easiest ways to get your feet wet in e-commerce. You send visitors (i.e., potential customers) to a merchant's Web site that you are representing. If they buy (or complete a required action -- for example, fill in a form), the merchant pays you a commission. Uncomplicated, right?

That, in essence, is the beauty of the affiliate concept. You can be up and building a business in record time, at minimal risk...

  • you don't have to spend large amounts to manufacture and store inventory

  • there is no need to take and process a single order, or worry about getting paid (you don't even need a merchant account!) -- you simply send people to your affiliated merchants, then get paid when they buy

  • you don't have to handle or ship a product -- your merchants do that

  • you'll never have to answer customer e-mail (inquiries and support are 24/7 issues that can easily eat up 50% of your day)

  • they cost nothing to join (beware of the few that do)

  • your affiliate business can be started part-time, on a shoestring.
With the affiliate model, you can earn as you learn.

If you're a Netrepreneur in need of a product, affiliate programs are the answer. Top-notch merchants supply everything... excellent products, ordering, credit-card processing, and delivery -- you supply the marketing.

All you need to do is to put yourself in the path between customers and quality merchants... and earn a commission for your efforts. But, like any "true" business, effort and passion are essential ingredients for longevity. This is not a "get-rich-quick" scheme.

In order to be a successful affiliate, it's important that you...

  1. Do the critical upfront thinking and planning...

    • develop the best site concept/theme, based on what you know and love. Perhaps a hobby or past work experience can be your springboard

    • brainstorm most profitable topics related to your theme

    • select best related affiliate programs.

  2. Then put yourself into your visitors' "click" path. You achieve this by...

    • delivering customer-focused content (i.e., information that meets the needs/wishes of your target group). PREselling through valuable content establishes credibility and, once you have that, your recommendations carry more weight. The difference in Conversion Rates between visitors who arrive PREsold to your merchant's site via an in-context text link vs. a banner can be as high as 20-fold.

    • building Search-Engine-Optimized pages that rank highly on a search results page. The higher the ranking, the easier it is for interested and targeted traffic to find you. More traffic means more potential sales which means more potential commissions for you.

    • publishing a regularly scheduled e-zine. This lets you build trust over time with your visitors. You change from being a "stranger" to being a "friend" who has their best interests at heart. Your recommendations are worth heeding.

  3. Eliminate dependency on any one single source of income. By diversifying into other, complementary monetization models beyond affiliate programs, you reduce risk. You are protected in case, for example, your merchant partner goes bankrupt, or shuts down their Web division, or reduces commissions, or fails on their payments.

    Multiple income streams stabilize your online business and potentially make every visitor to your site count. As a matter of fact, the ideal diversification strategy for the affiliate monetization model is to combine Google's AdSense Program with a few top-notch affiliate programs, blending in a finder's/lead-generation relationship or two.

    So build traffic first and then monetize it using the low-risk affiliate model -- as a primary source of income (if you have no product or service of your own to sell) or as a profitable secondary source.

Affiliating vs. Reselling

Click here to join the best affiliate programs

Many new Internet marketers mistakenly use the terms 'affiliate' and 'reseller' interchangeably. To set the record straight, I compare and contrast the two marketing methods below.

  • Cost to Join: Affiliate programs are FREE to join, whereas resellers must BUY products the products they sell.

  • Payment Scheme: Affiliates typically earn a percentage of the purchase price, while resellers retain 100% of the proceeds from product sales.

  • Product Fulfillment: Resellers must handle their own product fulfillment, including carrying inventory, order processing and shipping. In the case of affiliate marketing, the merchant handles all of the above.

  • Product Pricing: Each affiliate sells the product for the same price. Resellers can often set their own prices, although competitors may undermine their efforts by offering the same product for a lower price.

  • Lead Generation: Although affiliates can collect names and email addresses from visitors to their sites, the affiliate rarely knows exactly who buys their affiliated merchants' products. Because resellers handle product fulfillment themselves, they collect names and email addresses from those who buy their products, in addition to those who sign up for their opt-in lists on their sites. This benefits the reseller in that they can do follow-up or 'back-end' sales to existing customers.
As you can see, there are advantages and disadvantages to both types of Internet marketing, however, both methods can yield decent profits and are worth the effort.

Whether you choose to become an affiliate or a reseller depends on your current level of experience, as well as how much time, money and effort you can or want to put into your business venture.

Affiliate Programs I recommend James Martell's Affiliate Marketers Handbook.

James is a real been-there-done-that super affiliate.

His instruction manual shows you how he builds sites using web authoring software.

One particularly useful feature is his explanation of how he uses an innovative page-linking strategy to concentrate Google PageRank and send visitors to a small number of selling pages.

He doesn't merely show how to do all this, with 40,000 words and 107 helpful illustrations. He also shows you his own network of successful affiliate sites.

The most important fact is that James is highly successful, and shows you how exactly he does it.

You can check out James's Affiliate Marketers Handbook here.

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