Affiliate Marketing – The Basics
Affiliate Marketing is a great way of making money online and increase the revenue from your website. While it is generally quick and easy to set up an account as an affiliate, there are many things that you should know before you get started. My goal is to provide you with the knowledge and tools you need to get the most out of your website.
What is Affiliate Marketing?
Affiliate marketing is the selling and sharing of revenues between advertisers, merchants and publishers online. It is a method for promoting business on the web by connecting buyers and sellers and rewarding facilitators that referred the connection.
Who Are the Affiliate Marketers?
Publishers and Salespeople are referred to as affiliates. They sell their leads to the advertisers and merchants who are then regarded as the affiliate merchants.
There are several technological solutions for advertisers, merchants and companies that would want to adopt affiliate marketing as an added strategy to their business. Common types of solutions include third party affiliate net works, hosted services, stand alone software, and shopping carts with affiliate features.
Benefits of the Affiliate Marketer!
Applying affiliate marketing strategy will generate potential for automating most of your advertising, like generating linkages, accepting applications, reporting and the tracking of results.
Compensation of an Affiliate Marketer!
Payment is based on performances, the same as a sales person receives commission for a sale generated. An affiliate marketer is paid in terms of clicks (pay per click), registrations (pay per lead), sales (pay per sales) or its combinations.
Compensation schemes are as varied as the merchants that have adopted the strategy. Depending on the company, the item that is being sold, and the value of the lead, commissions generally range anywhere from 1% to 20%. Some commissions are paid at a flat Dollar rate.
Because of the online traffic, many merchants have built programs known as affiliate networks. This marketing technique has helped many businesses with making money online.
What you do?
- Sign up to sell merchants products.
- You advertise products to attract visitors to your site.
- You generate referrals and sales to your client company
- The company pays you for (pay per click), registrations (pay per lead), sales (pay per sales) or its combinations.
What you do not need to do?
- Since you are simply advertising or helping to advertise a merchant’s product or publishers’ materials, this is a business that you do not have to come out with a product of your own.
- Aside from your computer, phone lines and DSL routes, you do not need anything else.
- No putting up of capital, no overhead costs, no commuting needed.
- No particular area that is being franchised. No geographic limitations.
- You have a free reign on your choice of products to endorse.
- No inventories, shipping, freight, sales processing, the merchant does all those functions.
- No renting of office spaces. Your office is where you are.
Brief History of the Marketing Affiliate Program
Affiliate marketing started in 1996 with Amazon.com when it launched its affiliates program. Today the company has 450,000 sites in its network.
The basic idea is for small website owners to register with Amazon. The website owner then displays links, banners, and product descriptions on his website. When visitors to his site clicks and buys a book, the website owner is paid a commission on the generated sale.
As Amazon gained success other companies followed. Soon after, spamming caused a temporary negative reaction to affiliate marketing programs. It has since then matured where merchants have pushed for refinements in their program where affiliates were prohibited from spamming.
Today, affiliate marketing is a good marketing tool that is being adopted by companies and being enjoyed by affiliates. It is now common to see big businesses adopting the strategy in growing their respective businesses.
Adding affiliate products to your site will not only increase the earning potential of your web site, but also increase its value to your visitors. By recommending solid products that you would consider using, you provide a valuable recommendation for you site visitor.
Why use Affiliate Programs on your existing site.
One advantage to adding Affiliate programs to an existing website is that the new program and the existing site will both benefit from the exchange of traffic. Websites need to continually grow and increase in fresh original content in order to reach their full potential in the search engine “SERPs” (Search Engine Result Pages). Adding affiliate programs to your site may be an ideal way to add this additional content, while also giving you an additional way of making money online from your site.
Likewise your affiliate marketing endeavor will benefit from the age and traffic of your existing site. Newly registered domain names take time to gain trust by the search engines, and so, take time before they will rank well in the SERPs. By using an existing site you bypass this search engine restriction allowing you to start gaining traffic quickly.
Why use a single product for your Affiliate Website.
If you choose to use only a single product, or line of products, from one affiliate program this will give you the benefit of being able to devote more resources to one highly profitable affiliate program therefor increasing the chances of making money online. For larger or more expensive products this is often the best choice. By keeping to one product you are able to concentrate the keywords, keeping your site devoted to one idea. This often produces better traffic than having multiple themes to your site.
If possible, try to buy or use an existing domain name. It may take 9 months to a year for the search engines to start to trust a new domain. Using a domain that was registered longer than that will help.
Why use Multiple Affiliate Programs for your website.
When considering smaller, less expensive affiliate programs and products it is often more cost effective to have many programs on one site. The cost of the domain- name and hosting are cheap, but the cost of promoting the site, both in time and in monetary cost can be quite high. By having many products on your web site, you increase the chance of making a sale.
The downside to this type of Affiliate site is that you are likely to dilute your key-words; this can mean less traffic that what a web site with a smaller number of main keywords might produce. In this case it is often better to try to keep all of your affiliate programs related to a single subject.
Expectations – What is in it for the Affiliate Marketer?
An affiliate marketer site could be a virtual shopping center for online buyers to buy products and give the vendor an opportunity of making money online.
The possibility for continued viability of this marketing tool, at selling online, is now even better than it was when it started years ago because of the innovations and continued refinements in merchant’s policies to enable them to cope up with the current marketing climate.
Commission scheme that is to be expected as a Marketing affiliate.
Commission schemes vary from one merchant to another. The most popular practice remains to be the pay per click, pay per lead and the pay per sales. There are also variations, depending on the merchant, like multi-tiered commission packages. Some merchants offer a combination of all these variations.
With the pay per click/hit, the usual commission that a merchant affiliate receives is $0.05 to $0.10. per click.
For pay per sale, commission rates come as low as 1% to 50%. There are companies that offer a lifetime commission scheme. However bear in mind that the higher the commission gets, the more effort is applied in the process of selling. Most of those that really offer very high commissions are based on cookie identification that usually does not work our very well.
To get the most out of being a marketing affiliate, you should choose merchants that offer not only the products that can easily be identified with your website; but also maximize the benefits as well.
Use of tracking software.
Find out if you can have access to a merchants tracking software. Cookie tracking will not be a reliable device for the affiliate as cookies can be deleted by the buyer. If the merchant uses cookie tracking, you have to find out the duration of the cookie. Join an affiliate merchant that uses the services of an ASP that is reliable and can track all kinds of sales.
Affiliate network services are also widely used by merchants. Affiliate network are safe in conflict resolutions, and payments on time.
Terms and conditions of payment
You also incur expenses as a marketing affiliate aside from the hard work that you put into the business. You should therefore be paid promptly.
Before joining a merchant, look into its terms and conditions for payment. There are merchants that could have terms that may not be favorable for you. In order to avoid finding yourself on the other side of an undesired deal, look closely into the merchant’s rules and regulations before deciding to advertise for him.
Things to look out for are:
You should check the frequency of payment and the rate of the payout.
The affiliate merchant must ensure that you get paid at the end of every month or a few days after that.
Future sales pay structure.
Most buyers do not make a purchase during the first visit. Make sure that you get credit for future purchases by buyers that you refer to the merchant. This is also one of the reasons why you should join a merchant that does not use cookie tracking.
These are the minimum requirements that an affiliate marketer should look out for when joining a merchant when making money online is the goal. Having these benefits and knowing what it is that the merchant offers can make affiliate marketing a more rewarding business for you.