Affiliate programs (also called reseller or partnership or associate
programs) are revenue sharing arrangements set up by companies selling products
and/or services online. Webmasters are rewarded for directing customers to the
business.
Most affiliate programs have a minimum "pay-out" balance. For
example you would have to accumulate $20, 50 or 100 in commissions (whatever
amount they choose) before they issue you a check. Some pay monthly, some
quarterly.
Q: How does the affiliate
program track my commissions?
With the
use of a tracking software that determines where the visitor comes from. On
visiting the page the visitor gets a cookie that will identify him as 'coming
from that link'. Imagine a store with thousands doors. 'John' is an
affiliate and his link is a door. As someone gets into the store through John's
door gets 'sealed' that says: 'This visitor is John's, whatever he buys John
will earn the commissions!'.
The best affiliate programs pay you
a commission for generated sales and a (smaller) commission for sales generated
by others you refer. Some even pay you for your referral’s referrals’ sales,
several levels deep.
Anyone who
sells a product online should develop an affiliate program. With the exception
of a few products, almost every product or online service is MUCH more successful
if you offer an Associate Program for it. Instead of being the only one to work
on the marketing of your product, you’ll have 100’s even 1,000’s of people
engaging themselves for you!
Basically,
an affiliate (or associate, or reseller) is an independent representative of
your company. He or she tries to sell your product and take a
"referral" fee (commission) for all the products sold. You track
those visitors and sales, and give them a "referral" fee for all
sales generated from those visitors.
Q: Why are affiliate programs
the most effective way of advertising?
Once your affiliate program is set, every new affiliate
will post a banner and/or a text link on his/her site. Since most affiliates
pick a program that’s somehow related to the content of their sites, there are
chances that your ad targets the right people.
Q: Why are affiliate programs
the cheapest way of advertising?
Once you have setup your
affiliate program, the operating costs are virtually the same if you have to
track '1' associate or '10000' associates. It's zero, nothing, nada.
Q: How much work does it involve to run an affiliate program?
Besides
organizing yourself to receive an increasing amount of orders, your extra work
will consist of answering email enquires from your affiliates. You can
considerably reduce the amount of stress setting up a clear and complete
Affiliate FAQ page. In addition, you'll have to write commission checks in favor of your affiliates at the end of each month. The
tracking software will take care of the rest of the work.
For
the same reason why you should set up an affiliate program! An affiliate
program raises your sales chances. A two-tired program raises the chances of
your affiliate program to increase the number of affiliates, because your
affiliates will engage themselves in both marketing the products and the
affiliate program. In addition your program will get listed in all affiliate
programs directories (like this one). Most affiliate programs directories
won’t list single-tired programs since for them to earn from it. Would you work
for free?
So if for
example you plan to give out a 15% commission, you’d better offer 10% first
tier and 5% second tier pay out.
With the
use of a tracking software that determines where the visitor comes from. The
visitor gets a cookie that will identify him as ‘coming from that link’.
Imagine a store with thousands of doors. ‘John’ is an affiliate and his link is
a door. As someone gets into the store through your door gets a ‘stamp’ that says:
‘This visitor is John’s: whatever he buys John will earn commissions!’.
