What Is The Concept Of Affiliate Marketing?
Affiliate Marketing is where a product developer pays commissions on sales to another party for marketing their product. Let's take a look at the two roles in affiliate marketing:
• The Merchant creates a product/service and pays a commission
• The Affiliate markets the Merchant's product/service to make a commission
I play both of these roles and will market other people's products to my newsletter subscribers while allowing others to promote my products for a generous commission (usually 70% per sale). Affiliates are a great strategy for increasing your exposure: PPC and SEO are incredibly powerful, but somewhat limited in scope.
How? Let's say someone is interested in marketing your product. Rather than optimize around keywords or create PPC campaigns- both of which you currently do- they fire off an email to their newsletter subscribers describing your product in a positive light. Assuming they provide real value in their correspondence, their subscribers are more inclined to purchase the product.
You cannot access people from this element of trust through SEO or PPC. Rather than arrive at your site cautious, confused and skeptical, they are recommended from a third party they have grown to trust, and are in effect pre-sold on you and what you can offer them.
The Affiliate: Marketing Other People's Products
All you need to do is sign up with an affiliate directory like ClickBank or Commission Junction. They will give you a specific line of code to add to your links (so they can keep track of who sold what). Make sure to include this specific reference when you link to an affiliate's sales page. Becoming an affiliate is free; you only pay if you decide to list your own product for other people to sell.
There are several successful ways to market other people's products (or OPP, unless you're a Naughty By Nature fan).
Create a review site, and link to affiliates. This can be very lucrative, but you MUST have firsthand knowledge of the product in question. If you don't you are attempting to profit at someone else's expense. We follow a simple rule: never include an affiliate link if we don't personally use and receive value from the product.
I figure that by following this rule, everyone wins:
• The creator of the product gets more sales.
• The buyer purchases a product that provides real value.
• Visitors to our site can access the information for free, thanks to the revenue these links provide.
• Only then do I (the affiliate) deserve to get paid.
Let that sink in: As an affiliate, you are only entitled to profit if you bring real value to your visitors.
Recommend a product to your newsletter. After working in this industry for awhile now, I've come to suspect many so-called "free" newsletters are little more than sales pitches for affiliate products. While they may or may not make money, they provide little value to their visitors, and must constantly strive to get more traffic.
Having said that, I have actually gone out of my way to click on someone's link because of the value they have brought to me. For example, Dr. Howie Jacobson, author of a popular AdWords guide has provided key insights to my business model over the past year and a half. When he sent out a recommendation for a new product, I wasn't that interested at the time.
But I kept the email (which he had pointed out contained an affiliate link, always a good strategy). Several months later the product rose in priority, and I actually went back to that email and purchased the product, just so he could get his referral fee. This is achieved by providing someone with real value, and stating publicly that you will profit from the relationship.
The Merchant: Finding Affiliates to Sell Your Products
If you currently sell a product, you can list your ad in an affiliate marketplace such as ClickBank. Be sure to include information about your product, a copy of the sales page and what percentage of each sale you give to affiliates.
Sharp business people go above and beyond, and will provide template emails for newsletters, promotional discounts, and PPC ads with their historical results (should you want to advertise this way). Believe it or not, there are people out there who use Google AdWords to promote other people's products as their sole business model, and they make a ton of cash doing it.
However, my advice is to create your own products, so you ensure total control over your business model. You don't want the merchant to change their price, provide
less-than-satisfactory customer service, or pull the product and kill your business. Create your own product and begin building a list, then occasionally recommend one of these products to your audience.
I also recommend offering the largest commission possible to your affiliates. They shoulder the majority of risk marketing a merchant's product, and should be compensated accordingly. In short, you'll earn more if you offer more.
Options for Creating an Affiliate Program
As a merchant, there are two routes you can go with affiliate programs:
• join an existing affiliate network
• create your own from the ground up
Joining an affiliate program is quick and easy... in theory. I have had products denied from www.ClickBank.net, with no explanation given.
E-junkie has an affiliate program that you manage yourself, and like the rest of their services, it rocks! I recommend this for anyone wanting to get started right away with affiliates.
Once your systems start to take off, you may want to develop your own affiliate program. You can buy PostAffiliatePro for $149- plus an optional $299 for installation- and start right away. While you have complete control over the relationship, there isn't a built in marketplace for you to list your product- making you solely responsible for recruiting affiliates.
If you're up to it, research the top sites in your market and approach the owners with a personalized email (or, God forbid, call them) demonstrating your knowledge of their site, and how marketing your product can be mutually beneficial.
Most affiliates are looking for quality products that convert well, have a low refund rate and offer generous (+$50) commissions. By offering additional marketing materials, you set yourself above other merchants. You have a choice: set up the marketing materials for affiliates once, or expect each one to start from scratch.
Remember Archimedes: leverage your efforts by doing the work once and help your affiliates- and you- make more money. Set up autoresponders and send them new marketing ideas, ask them for feedback, create pre-sell pages for them, five-day autoresponder templates, product reviews, etc. An affiliate should take less than an hour to set up an income stream with your system.
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