Affiliate Programs... A Not THAT Easy Start To Your Own Online Business 

"Where is all the help I`m supposed to get. I have been
buying ezine and classified ad builders and signing up for
Echecks and Virtual credit cards. In the meantime I have no
business and no ads set up. When does all this happen? Let`s
go here. I spent all day on this. I`m running out of time."

I kid you not, this is the sum total of an actual email that
hit my inbox this week. Not only did I not know this person
from Adam, this was the first and only email I had ever
received from her and to this day, I have no idea what she`s
talking about. Presumably, she signed up for one of the
affiliate programs I promote from my site and was asking, in
her own inimitable style, for my help. Although I am always
ready and willing to help anyone I can, this is most
definitely NOT the way to go about asking for it. Needless to
say, I let her know what I thought of her approach in NO
uncertain terms.

The attitude displayed in this person`s email to me (and she is
by no means an isolated example) exemplifies why so many
people fail to make a success of their online businesses.
Leaving aside the utter rudeness of the approach, notice the
impatience, the expectation to be up and running in a day, the
HURRY, the apparent belief that real world principles such as
courtesy and good manners don`t apply online (they do). Think
this person is going to last the distance? What kinds of
tactics do you think she is capable of resorting to in pursuit
of the almighty dollar?

So, 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
them.

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 behalf.

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
business.

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 product/service.

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.

=> Synergistic Products/Services

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.

=> References

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 on.

=> Affiliate Agreement

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.

=> High Commissions

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.

=> Lifetime Commissions

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.

=> Residual Commissions

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 result.

=> 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 looking.

=> 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!

=> Affiliate Support

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
areas.

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.

=> Personal Testimonials

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
send.

=> 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.

Written by Gian Luigi Ruggeri © 2001 - All rights reserved
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