Affiliate Programs
How
do Affiliate Programs work?
GET
RICH? -
You've heard the story before. Some local
"dot-com" startup company sells out for
millions of dollars and the 21-year-old wiz kid
owner waltzes off into the sunset with a mansion
and a fleet Cadillacs and sports cars. I'm not
saying it hasn't happened, but it certainly hasn't
happened to us. We're not talking about
get-rich-quick schemes here. We're talking about a
way to generate a steady monthly income through
genuine hard work, a little ingenuity, and an
Internet phenomenon called Affiliate Programs.
THE
REFERRAL SYSTEM
- The concept is really quite simple. Everything
is based on a paid referral system. Visitors come
to your website, you introduce them to a product
or service from a third-party vendor through a
banner or text link, and if your referral decides
to buy, you get paid a commission. While it sounds
simple, there are a few important details to know
before you begin. Let's look at an example.
CASE
STUDY - Joe
is interested in parakeets, so she sets up a web
site called Petkeets.com to share some of her
ideas with others who are interested in the same
thing. She begins to build up a loyal following of
people who visit her site frequently for weekly
tips and ideas. She signs up as an affiliate with
a merchant called Pet Bird Supplies Online, and
places their small banner link on her site. For
each of her site visitors who clicks on the banner
and visits the merchant, Mary receives $.10 per
click (click-throughs) for introducing that person
to the merchant services. In addition she might
receive 15% of any purchases (sales/leads) that
person might make. Everyone wins.
COUNTING
THE CLICKS
- Right now you're probably wondering who keeps
track of all these clicks and how you eventually
get paid. That's where web services like Befree
and Commission Junction
come in. They make the whole process simple by
doing all the tracking through your personal
affiliate i.d. and then send you one check at the
end of the month for all your commissions. That's
how the whole thing works. But at $.10 a click,
can a small web site really make any money? That
depends on a few important factors.
EVERY
SITE CAN MAKE MONEY - Every web site,
no matter how small can make some money with
Affiliate Programs. Slap on any affiliate banner
or text link and you're bound to get some clicks
eventually. But to really make money you have to
have the right combination of key elements.
CONTENT
+ TRAFFIC + THE RIGHT AFFILIATE PROGRAM = $
Without these three key elements you probably
won't see much in the way of income: (1) A website
must be built and updated in such a way that the
content brings people back to the site over and
over again. (2) The affiliate programs must be
related to the site content, so that the site
offers are of significant interest to the
visitors. (3) The referral fee must be substantial
enough to make you want to promote the offer. When
all three elements are in place, you are on your
way.
WHAT
CAN I EXPECT TO MAKE?
Click-through rates are considered good if .5% to
5% of your referrals actually buy something. You
do the math for your website. If you're only
getting 50 visitors a day, it probably won't ever
amount to much. But if you build up your
traffic so you're getting 100 to 1000 visitors
a day, then you are in a position to make a
substantial monthly income.
CASE
STUDY
Derek's site, Skateboardguy.com is geared to
skateboard enthusiasts. He publishes a guide to
all the skateboard events and competitions,
provides a series of how-to articles, reviews new
products, and offers free e-mail problem-solving
advice. In time he becomes the Internet
"guru" for skateboard enthusiasts. His
content-rich site is now getting 500 hits a day
(15,000 a month) from all over the world. He joins
an affiliate program and places a banner link to
Boardsonline.com which offers discount deals. He
gets $.10 per click-through and 15% of any
purchases made. In July Derek reviews a new
skateboard kit and tells his readers they can get
it at a great price from Boardsonline.com During
that month 150 of his readers take his advice and
visit Boardsonline.com (150 click-throughs) of
which 15 people decide to purchase the kit for
$200 (15 sales leads.) His affiliate check for
June would include $15 for his click-throughs and
$450 for his sales commissions.
INCREASE
YOUR OFFERS
While Derek isn't going to get rich from his
single affiliate, it does make his computer
payment, his dial-up account fee, and some bonus
money that month. But he can do better when he
adds five more affiliate links to other related
products such as books, magazines, newsletters
etc. Why not? It costs nothing and his efforts are
now multiplied times five. He now has five
salespeople working for him instead of just one.
There are literally hundreds of thousands of
affiliate programs on the Internet.
The key to success is finding programs that
appeal to your audience and pay acceptable
commissions, and pay them promptly.
As soon as you join each program you should
place promotional material on your web site, send
an announcement to your list, and schedule
additional promotions on your calendar.
A consistent Marketing
Program is essential to generate an acceptable
revenue stream from affiliate programs. You must
continually work to drive
traffic to your affiliate sites.
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