Choosing an Effective Affiliate Program

It can become a little overwhelming. Are they all a hoax? Can you really make money with affiliate or reseller programs? How do you know if they are legitimate and on the up and up?

Well, let me tell you, web partnering, affiliate programs and reseller opportunities are here to stay on the net. Major companies like amazon.com and disney.com realize that affiliate programs are well worth the effort to set them up. Why are they so ubiquitous?

The reason is that until now, there has never been a fail-safe and cost effective way to attract partners, sign them up, track their performance, and properly credit them for all their sales. With the Internet, all that is now possible.

Here is an example. A visitor arrives at amazon.com, looking for a particular book title that they could not find in their local mall. They surf around amazon for a bit, then they see the bold and beautiful banner, at the top of the page that says "You can make money by teaming up with amazon", or "Click here to join our affiliate program". The visitor clicks, enters their email address, and the process has begun.

Email is so quick and easy for the user. Best of all from amazon's perspective, it costs practically nothing to send that visitor the information he needs by autoresponder. Soon the visitor checks his mail box... An enticing letter is waiting inviting them to return to the web site to fill out an online form. It is free, so the visitor fills out the form and soon the visitor is in business.

Good affiliate programs are easy and uncomplicated to join. Most established affiliate programs have a powerful backend software that manages the entire relationship between the affiliates and the parent company. The system should give the new affiliate a password, username and a sample banner (coded with a unique affiliate password); That is all that is required to get started. The user is now free to post the banner on their web site and wait for surfers to visit amazon and buy something. Not until then does the affiliate make money.

It seems obvious why companies would want to set up affiliate programs. The sheer size of the web makes it impossible for them to communicate effectively with all potential customers. That may be true, but the real genius of an affiliate program is its ability to share risk.

Advertising is risky. You never really know what is going to work until you try. By then, it may be too late; the money has been spent. Big advertising campaigns are even riskier, since more is at stake. Spending millions on advertising in the wrong place, with the wrong message could spell disaster for a company.

Affiliate programs effectively shift that risk burden onto the little guy. With affiliate programs, such as amazon's there are countless small businesses with banner ads and links on their sites. Some will be effective, some will not. Some will succeed, others will flop horribly. Frankly, it matters little to amazon.com which ones work and which do not. It cost them nearly nothing to set up each individual affiliate, so if some of them prove to be duds, then they do not really care. The risk of failure has shifted from amazon, to their affiliates.

So, if the affiliates are getting used, are affiliate programs really a good thing for the small business person?

Yes, they often are. If your website generates a significant amount of traffic, then you stand to gain from affiliate programs. However, before you decide which affiliate programs are best for you, you should be aware of a few important issues. Here is a checklist that you can use to evaluate different affiliate programs.

1. Quality Product.

Is it a good product?

Always purchase the product and use it. Determine if it has "real value". Does it make your life or job easier as promised? Was the purchase process smooth and uncomplicated? There are a number of products and services out there that you may not want to be associated with. Choose carefully.

Ask yourself:

Is it a product that fits into my current product line? Would it sell well to my current web site customers?

2. Customer and Affiliate Support.

Determine up front the company's support structure. Find out who you can call when problems arise. Who handles customer complaints or questions? This is a big one, if you are not familiar with a product, it is often better to let the company provide all the customer service. Or at least be confident that there is a resource available for you to find the needed information.

3. Inventory Management.

Do you have to carry inventory of a company's product, or do they deliver? When you're just beginning with a new product, you do not want to carry any inventory. You want to be able to forward your order to the company, and have them fill the order. Down the road, you may determine the product sells well and it is to your advantage (a bulk discount on a large order for example) to carry a small inventory of the product. Of course, most Internet based affiliate programs will meet this criteria.

4. Payment Details.

Who actually collects the customer's money?

You or the company? Some of us do not have a choice. If you can not accept credit cards, or do not yet have a business bank account, then it is best to let the company collect the moneys. This often means a smaller commission for you. However, it also saves you the potential complications of dealing with refunds, credit card fraud, etc.

Other questions to ask: What percent of the sale is yours? How often do you get paid, once per week, once per month, only if they owe you more than a certain amount? Ask these questions.

5. Sales Tracking.

How are you notified of orders? If you collect the customer's money, then you will know of every single order that is placed. But if the company collects the money (usually this means they provide customer service), then make sure there is a foolproof system in place that guarantees every sale is properly credited to you. This can be done through coded order forms, that email you and the company to announce the purchase.

6. Sales Support.

Does the company provide sales literature or a web site for you? Often, companies have been in the marketing game for a while and have tried and true advertising literature available. This can help you in getting started quickly.

These are six important elements of an effective associate program. They can help you avoid costly mistakes and wasted efforts in promoting programs that just do not work!

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Kevin Needham

Publisher, A.I.M. Ezine

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