Introduction to Affiliate Programs

Introduction to Affiliate Programs
By Edvard Halupa

Definition of Affiliate programs

Affiliate programs enable affiliates to leverage their traffic
and customer base in order to profit from e-commerce while
merchants benefit from increased exposure and sales.

www.sitenexus.com/glossary.asp (http://www.sitenexus.com/
glossary.asp)

Affiliate programs allow you to pay and track incentives to
other websites that send you visitors, leads or paying
customers. You decide on the incentives you pay.

www.infront.com/web-development-glossary.asp (http://www.
infront.com/web-development-glossary.asp)

These are programs permitting you to earn money based on the
visitors to your site who click through to another`s Web Site.
Some pay a token amount for the click through and others
provide a percentage of sales when a visitor "clicks through"
your site and buys a product or service on the other party`s
site. This could represent a value added service to your
visitors, but carried to an extreme, can delude your own
message by cluttering your pages with banner ads many find
more annoying than useful.

www.danznet.com/Glossary.htm (http://www.danznet.com/Glossary.
htm)

First Affiliate program

Originally, affiliate marketing, as we know today was born in
1995 when Jeff Bez launched Amazon.com (http://Amazon.com).
This online shopping portal used “associate program” to rank
itself as one of the best selling sites on the internet. While
paying commissions base to “associates” Amazon expanded its
product range from books to jewelry, DVDs and online auctions
what else. Basically, anyone owning a homepage could join in
just a few minutes and was provided a link to send his
visitors, potential shoppers to Amazon`s site, for a commission.

However, not everyone who joined was lucky enough to build
profit. For example, not every visitor, sent to Amazon, was
within a “target group”. The system is more sophisticated
today with links leading to certain group of products or
special “promo” offers, increasing incentives.

Later, new shopping sites were jumping out of nowhere: CDNow,
Sparks.com (http://Sparks.com), 1-800-flowers.com (http://1-
800-flowers.com), are just a few names that were promising you
a fortune if you join and start advertising what they sell.
Internet also brought new packing for a very old product: E-
books. After entering credit card number you could be enjoying
your favorite genre in just a few moments. No shipping. No
handling. Low costs for the seller and immediate download for
the customer. Sites offering e-books for download became a
magnet for affiliates. Profits in this sector are very high
and offered commissions reach level up to 50%. Commissions for
music CDs, DVDs, are up to 10%. The higher commissions are
offered only between online dating sites (some personals
networks offer up to 75%).

New startup dot-com companies brought affiliate marketing to a
new level: second-tier.

This system supposed to make recruiting affiliates easier and
for current affiliates create one more cash source and
motivate them to recommend program to other fellow webmasters.
Upper affiliate usually earns between 5% and 25% (of what
affiliate below him) on every transaction affiliate they
recommended makes.

Written by Gian Luigi Ruggeri © 2001 - All rights reserved
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