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Affiliate Marketing - Page 7 of 9

Affiliate Marketing


Affiliate marketing isn’t a new concept in the marketing world. Simply put, it’s the idea of paying a sales force only on a commission-basis. If they perform, they make money – lots of money if they do it well. If they do not put any energy into selling your product, they make no money and you aren’t out anything in the process.

An affiliate marketing relationship has three players – the merchant/advertiser is the company selling the product or service, the affiliate/publisher is the sales person (which for our purposes is a webmaster or website manager/owner) and finally, the customer. The process goes something like this:

  1. A customer surfing the web goes to one of your affiliates’ sites and sees your link or ad on their page.
  2. The customer clicks the link, arrives at your website and decides to purchase a product or service.
  3. The sale to that customer is confirmed, and the affiliate is paid a commission on that sale.

There are many different models for affiliate programs depending on the type of business. Some pay commissions on sales only, some pay commissions on leads, some on registrations, etc.

Some questions to think about before starting your own affiliate program are:


  • If you don’t have e-commerce, are you able to determine the quality of a lead before you pay the commission? If not, make sure you only allow affiliates you trust to join or the unknown ones will take advantage and find ways to submit false leads.
  • Is your product something the end user will need to research some before the purchase? If so, they might leave your site to go find more information. If this is the case, it’s possible, depending on your program settings and the length of time before the actual purchase, that the affiliate will never get credit for the sale. That may sound good because you don’t pay a commission, but when the affiliate doesn’t see any money they will be quick to switch to running ads for a competitor instead.
  • Do you have enough margin built in to your product sales to pay a competitive commission rate? If not, it will be difficult to find affiliates to join your program.



 

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