It’s impossible for me to overemphasize the importance of finding and selecting good merchants. As an affiliate your job
is to presell a merchant’s products or services. No matter how good your marketing is, the merchant still has to close
the deal.
I’ve met several experienced affiliate marketers who seem to be doing everything right, but are unable to be profitable
when promoting certain merchants.
In addition to selecting the best merchants for your website, you need to make sure that you are promoting the
merchant’s best converting products and services. There’s no substitute for experience when it comes to selecting
the best products or services to promote, but using some due diligence may help you filter out some poor converting
products in advance.
Saturday, October 25, 2008
Sunday, October 19, 2008
How Does an Affiliate Earn Money?
There are four basic actions in which affiliates are paid when they send their visitors to a merchant’s website.
The visitor buys something from the advertiser (Pay per Sale).
The visitor completes a lead form (Pay per Lead).
The visitor downloads, installs, or uses some product or service (Pay per Action).
The visitor clicks on a link and visits the merchant’s website (Pay per Click).
Below are detailed explanations of each action:
Pay Per Sale:
Pay per Sale is the most common type of affiliate program on the web. With Pay per Sale you refer visitors to a merchant
that sells products or services. You earn a commission when that visitor buys something from the merchant. In most
cases you earn a percentage of the sale, but in some instances you may be given a flat dollar amount.
Most merchants that sell products online pay their affiliates a percentage of sales. Merchants that fall into this category
include, Home Depot, REI, Dell Computers, and most big e-tailers on the Internet.
Most of the merchants that pay their affiliates a flat dollar amount sell services. Merchants who sell web hosting, online
dating, and other online services tend to compensate their affiliates with a flat dollar amount, rather than a percentage
of the sale.
Advantages of Earning a Percentage of Sales
You can earn a ton of cash on big ticket items.
(Example: You refer a customer who buys a $2,500 computer).
You can earn a ton of cash when your visitors buys multiple items at once.
(Example: You refer a customer who buys a pair of shoes, matching purse and jacket).
Some merchants will pay their affiliates commissions on repeat purchases.
Disadvantages of Earning a Percentage of Sales
Your visitor may by a small ticket item.
(Example: The customer you referred buys a pair of socks, and never returns to purchase anything else).
Your visitor may return the merchandise, which could result in your commission being reversed.
(Example: The shirt your visitor bought last week just doesn’t fit right. They return it, and your commission
is reversed).
Pay Per Lead.
Pay Per Lead merchants are some of the most desirable merchants to promote. With Pay Per Lead you are compensated
when your visitor completes an online lead form. Popular Pay Per Lead programs include merchants in the insurancemortgage, and service businesses.
Merchants will only pay affiliates for qualified and legitimate leads. For example, if you send a California insurance
company a lead from New York where the company cannot provide insurance, that is an unqualified lead, and chances
are you will not be compensated for it. Another no-brainer is that merchants won’t pay their affiliates for leads with fake
or incomplete data. A lead without a phone number or e-mail address is no good to a merchant.
Conversion rates on Pay Per Lead programs tend to be higher than Pay Per Sale programs because the visitor isn’t
buying anything, they’re simply completing an online form. It’s much easier to get visitors to fill out a form than to buy
something online. However, the payout for a lead may be less than the payout for a good Pay per Sale program.
Advantages of Pay Per Lead Programs
The conversion rate for Pay Per Lead programs can be better than Pay Per Sale.
You can earn big commissions in industries like mortgage loans and insurance.
Disadvantages of Pay Per Lead Programs
The commissions can be less than Pay Per Sale programs.
Some of the leads you send from your website may not be qualified.
Pay Per Action:
Pay Per Action programs pay their affiliates when their visitors download, install, or use some product or service. Many
of the merchants in this space are software companies or web service companies that want customers to try their
products or services.
A good example of a Pay Per Action affiliate program is Yahoo!. They compensate their affiliates when their visitors
download and install their Instant Messenger application, Search toolbar, or Music Jukebox software.
Advantages of Pay Per Action Programs
Your visitors don’t have to buy anything. In most cases they just have to try some software or web service.
Disadvantages of Pay Per Action Programs
A visitor you refer may not meet the minimum software or hardware requirements to install the software.
Pay Per Click:
Pay Per Click affiliate programs are almost non-existent now. Once a good idea, too many affiliates defrauded merchants
by clicking on their own affiliate links, or by creating “click-bots” (software applications) that would automatically click on
their links. The cost and time involved with monitoring the fraud had become cost-prohibitive for many merchants.
Advantages of Pay Per Click Programs
• Good conversion rates - The user simply clicks a link and visits the merchant’s website.
• If you have a lot of traffic, you could make a lot of money.
Disadvantages of Pay Per Click Programs
• Merchants that offer this type of affiliate program are few and far between.
• The payout per click can be very small.
An Important Note About Pay Per Click Programs
While many advertisers with affiliate programs are moving away from this payout model, there are some popular
contextual advertising networks such as Google AdSense, and the Yahoo Publisher Network that are thriving under the
Pay Per Click model. Contextual Ad networks are outside the scope of this book, and will not be covered in detail.
The visitor buys something from the advertiser (Pay per Sale).
The visitor completes a lead form (Pay per Lead).
The visitor downloads, installs, or uses some product or service (Pay per Action).
The visitor clicks on a link and visits the merchant’s website (Pay per Click).
Below are detailed explanations of each action:
Pay Per Sale:
Pay per Sale is the most common type of affiliate program on the web. With Pay per Sale you refer visitors to a merchant
that sells products or services. You earn a commission when that visitor buys something from the merchant. In most
cases you earn a percentage of the sale, but in some instances you may be given a flat dollar amount.
Most merchants that sell products online pay their affiliates a percentage of sales. Merchants that fall into this category
include, Home Depot, REI, Dell Computers, and most big e-tailers on the Internet.
Most of the merchants that pay their affiliates a flat dollar amount sell services. Merchants who sell web hosting, online
dating, and other online services tend to compensate their affiliates with a flat dollar amount, rather than a percentage
of the sale.
Advantages of Earning a Percentage of Sales
You can earn a ton of cash on big ticket items.
(Example: You refer a customer who buys a $2,500 computer).
You can earn a ton of cash when your visitors buys multiple items at once.
(Example: You refer a customer who buys a pair of shoes, matching purse and jacket).
Some merchants will pay their affiliates commissions on repeat purchases.
Disadvantages of Earning a Percentage of Sales
Your visitor may by a small ticket item.
(Example: The customer you referred buys a pair of socks, and never returns to purchase anything else).
Your visitor may return the merchandise, which could result in your commission being reversed.
(Example: The shirt your visitor bought last week just doesn’t fit right. They return it, and your commission
is reversed).
Pay Per Lead.
Pay Per Lead merchants are some of the most desirable merchants to promote. With Pay Per Lead you are compensated
when your visitor completes an online lead form. Popular Pay Per Lead programs include merchants in the insurancemortgage, and service businesses.
Merchants will only pay affiliates for qualified and legitimate leads. For example, if you send a California insurance
company a lead from New York where the company cannot provide insurance, that is an unqualified lead, and chances
are you will not be compensated for it. Another no-brainer is that merchants won’t pay their affiliates for leads with fake
or incomplete data. A lead without a phone number or e-mail address is no good to a merchant.
Conversion rates on Pay Per Lead programs tend to be higher than Pay Per Sale programs because the visitor isn’t
buying anything, they’re simply completing an online form. It’s much easier to get visitors to fill out a form than to buy
something online. However, the payout for a lead may be less than the payout for a good Pay per Sale program.
Advantages of Pay Per Lead Programs
The conversion rate for Pay Per Lead programs can be better than Pay Per Sale.
You can earn big commissions in industries like mortgage loans and insurance.
Disadvantages of Pay Per Lead Programs
The commissions can be less than Pay Per Sale programs.
Some of the leads you send from your website may not be qualified.
Pay Per Action:
Pay Per Action programs pay their affiliates when their visitors download, install, or use some product or service. Many
of the merchants in this space are software companies or web service companies that want customers to try their
products or services.
A good example of a Pay Per Action affiliate program is Yahoo!. They compensate their affiliates when their visitors
download and install their Instant Messenger application, Search toolbar, or Music Jukebox software.
Advantages of Pay Per Action Programs
Your visitors don’t have to buy anything. In most cases they just have to try some software or web service.
Disadvantages of Pay Per Action Programs
A visitor you refer may not meet the minimum software or hardware requirements to install the software.
Pay Per Click:
Pay Per Click affiliate programs are almost non-existent now. Once a good idea, too many affiliates defrauded merchants
by clicking on their own affiliate links, or by creating “click-bots” (software applications) that would automatically click on
their links. The cost and time involved with monitoring the fraud had become cost-prohibitive for many merchants.
Advantages of Pay Per Click Programs
• Good conversion rates - The user simply clicks a link and visits the merchant’s website.
• If you have a lot of traffic, you could make a lot of money.
Disadvantages of Pay Per Click Programs
• Merchants that offer this type of affiliate program are few and far between.
• The payout per click can be very small.
An Important Note About Pay Per Click Programs
While many advertisers with affiliate programs are moving away from this payout model, there are some popular
contextual advertising networks such as Google AdSense, and the Yahoo Publisher Network that are thriving under the
Pay Per Click model. Contextual Ad networks are outside the scope of this book, and will not be covered in detail.
What is Affiliate Marketing?
In simple terms, affiliate marketing is where you refer visitors from your website to a merchant’s website. A merchant
is any individual or company that sells products or services online. Wal-Mart, Home Depot, eBay, and Yahoo are all examples of merchants with affiliate programs. These companies pay their affiliates to promote their products and
services online. Merchants with affiliate programs range in size from small businesses to Fortune 500 companies.
You earn commissions when the visitors you refer complete some type of action on a merchant’s website. For example,
you may earn a commission if the visitor you refer makes a purchase, completes a lead form, or downloads some
software.
How Does Affiliate Marketing Work?
When a visitor comes to your website and clicks on one of your merchant’s links, a tracking cookie is set on the visitor’s
computer. A cookie, in Internet terms, is nothing more than a small text file that is placed on a user’s computer when
they visit a website. This cookie tells a merchant that a visitor was referred by your website. When that visitor makes a
purchase, or completes some other action on a merchant’s website, the merchant gives you a commission. That’s it!
You don’t have to fulfill any products, handle customer service issues, or do anything else. All you’re doing is referring
visitors from your website to a merchant’s website.
The Benefits of Affiliate Marketing
Almost as nice as the flexibility, is the money. I don’t consider it easy money; I’ve worked hard for every dollar I’ve
earned. However, I’m in control of what I make! When you own an affiliate business you’re in the driver’s seat. If you
need to make more money, you just spend more time working on your affiliate business.
The nice thing about earning money from an affiliate business is that it can be residual. Wait! What do I mean by
residual? It means that my websites make money even when I’m not working on them. This frees me up to build more
money-making websites, which also earn residual income. As you can see this has a multiplying effect. In the last 2
years I have developed over 100 websites that have helped me to earn a substantial monthly income. For the most part,
these websites are self-sustaining. If I take a week off and go on vacation my affiliate websites are still making money.
My affiliate websites are not 100% maintenance free. However, I only have to spend a minimal amount of time each
month maintaining them. This maintenance is mostly just reviewing reports and trying to determine ways to earn more
money.
Low Start-Up Costs - You don’t have to mortgage your house to launch an affiliate business
The costs associated with starting up a typical brick and mortar business range from tens of thousands of dollars, to
millions of dollars. This presents a huge obstacle for most aspiring entrepreneurs. Even starting your own e-commerce
website can be expensive and difficult.
You can launch a quality affiliate website that can start generating instant cash for just a few hundred dollars, even if you
have little or no experience developing websites.
No Employees - Unless you count yourself
One of the biggest challenges facing business owners today is finding and managing good employees. Employees can
cost a business a lot of money. When you add up the cost of an employee’s salary, benefits, and other entitlements, it
can add up quickly! There are also hidden costs associated with having employees. Consider the costs of unemployment
if you have to lay off an employee. Consider the liability if an employee gets hurt on the job. What if an employee sues
you for wrongful termination? What if an employee goes to work for one of your competitors?
is any individual or company that sells products or services online. Wal-Mart, Home Depot, eBay, and Yahoo are all examples of merchants with affiliate programs. These companies pay their affiliates to promote their products and
services online. Merchants with affiliate programs range in size from small businesses to Fortune 500 companies.
You earn commissions when the visitors you refer complete some type of action on a merchant’s website. For example,
you may earn a commission if the visitor you refer makes a purchase, completes a lead form, or downloads some
software.
How Does Affiliate Marketing Work?
When a visitor comes to your website and clicks on one of your merchant’s links, a tracking cookie is set on the visitor’s
computer. A cookie, in Internet terms, is nothing more than a small text file that is placed on a user’s computer when
they visit a website. This cookie tells a merchant that a visitor was referred by your website. When that visitor makes a
purchase, or completes some other action on a merchant’s website, the merchant gives you a commission. That’s it!
You don’t have to fulfill any products, handle customer service issues, or do anything else. All you’re doing is referring
visitors from your website to a merchant’s website.
The Benefits of Affiliate Marketing
Almost as nice as the flexibility, is the money. I don’t consider it easy money; I’ve worked hard for every dollar I’ve
earned. However, I’m in control of what I make! When you own an affiliate business you’re in the driver’s seat. If you
need to make more money, you just spend more time working on your affiliate business.
The nice thing about earning money from an affiliate business is that it can be residual. Wait! What do I mean by
residual? It means that my websites make money even when I’m not working on them. This frees me up to build more
money-making websites, which also earn residual income. As you can see this has a multiplying effect. In the last 2
years I have developed over 100 websites that have helped me to earn a substantial monthly income. For the most part,
these websites are self-sustaining. If I take a week off and go on vacation my affiliate websites are still making money.
My affiliate websites are not 100% maintenance free. However, I only have to spend a minimal amount of time each
month maintaining them. This maintenance is mostly just reviewing reports and trying to determine ways to earn more
money.
Low Start-Up Costs - You don’t have to mortgage your house to launch an affiliate business
The costs associated with starting up a typical brick and mortar business range from tens of thousands of dollars, to
millions of dollars. This presents a huge obstacle for most aspiring entrepreneurs. Even starting your own e-commerce
website can be expensive and difficult.
You can launch a quality affiliate website that can start generating instant cash for just a few hundred dollars, even if you
have little or no experience developing websites.
No Employees - Unless you count yourself
One of the biggest challenges facing business owners today is finding and managing good employees. Employees can
cost a business a lot of money. When you add up the cost of an employee’s salary, benefits, and other entitlements, it
can add up quickly! There are also hidden costs associated with having employees. Consider the costs of unemployment
if you have to lay off an employee. Consider the liability if an employee gets hurt on the job. What if an employee sues
you for wrongful termination? What if an employee goes to work for one of your competitors?
Subscribe to:
Posts (Atom)
