What is an Affiliate Program? And How to Make Money out of it ?
Definition: A way for a company to sell its products by signing up individuals or companies (affiliates) who market the company’s products for a commission. There are two ways to approach affiliate marketing: You can offer an affiliate program to others or you can sign up to be another business’s affiliate.
Simply put, affiliate programs, also called Associate Programs, are arrangements in which an Online merchant Web site pays affiliate Web sites a commission to send them traffic. These affiliate Web sites post links to the merchant site and are paid according to a particular agreement.
How Affiliate Programs Work ?
Affiliate Programs are a rapidly growing sector of the online business world. These programs offer benefits for both parties involved – but how do these programs work? Read on for an explanation of what affiliate programs are, how they work and how you can get involved in one yourself.
An Affiliate Program is a pretty simple concept, although it can be complex to implement. An Affiliate Program is an agreement between a Company which has a product or service to sell (this company is called the Merchant in the context of affiliate programs) and a website owner who is willing to market the products or services which the merchant offers – this person is known as the Affiliate.
Affiliate Merchant Provides Links, Banners and Promotional Tools
The merchant provides the affiliate with a link to use on their website which directs visitors to the website of the merchant; if the visitor makes a purchase, the affiliate is paid a commission on the sale. These programs are beneficial for the affiliate, since they have an opportunity to make money while putting in as little or as much work as they like. The merchant is able to essentially have any number of sales personnel who are paid strictly on a commission basis, making affiliate programs an incredibly cost effective form of marketing for any business with an online presence.
So depending on how savvy an affiliate is about internet marketing and of course, how appealing of a product or service they are marketing, there can be a lot of money to be made in these programs.
Making Money With Affiliate Programs
Affiliate programs can be a very powerful source of income for your website. Affiliate programs offer the best opportunities to start an online business, or to grow and existing one to new levels. They are a great way to monetize your web site and you should definitely take the time to look into them. There are three primary ways to locate affiliate programs for a target website. They are Affiliate programs directories, large Affiliate Networks that provide the platform for dozens or even hundreds of advertisers, and the target website itself.
Affiliate program businesses are still on a roll as the boom in the affiliate industry continues. Many are a part of this industry, and many more want to enter it, either as merchants or as affiliates. The world of affiliate business continues to change and everyone needs to adapt to these changes to be able to stay in the business. The best way to have the ability to go with the radical flow of affiliating is to have firm grasp of the fundamentals. The basics of putting up and operating an affiliate program business are vital to success.
Affiliate Program Business Introduction
A website is the flag that signifies the company it belongs to. In the past only the well established and highly profitable companies have their own websites. But nowadays, thanks to the continuous evolution of the Internet, setting up a website has become so easy anyone can do actually do it. The fastest and easiest way of building a website is by using an online website builder that has ready-made templates and other webpage elements you can choose from to construct your very own unique website design. These sites will also be the ones to provide your sites URL for you. The downside to using these site builders is that most of them attach advertisements on webpages that are made with them, and their greatest advantage is the ability to design a website and get it online in less than an hour.
Design only grabs the attention of human readers, but before people can marvel at the beauty and greatness of your sites appearance, they must first be able to find it. And for people to find your site, the best and fastest way is that they find it in the results page of the major search engines. And one of the best ways you can get good rankings on the trusted search engines is through Search Engine Optimization or SEO. SEO however can prove to be complex and hard to do especially to those who have never even heard of it before. A good alternative to SEO in getting your website seen is engaging in an affiliate program. Such action allows you to profit from your content-driven website’s traffic as well as make sales with the same website.
Some people promoting affiliate programs do not even have a website and they are making thousands of dollars a month. If you are in the affiliate marketing industry you probably know by now that finding great converting offers are not easy to find. It is an internet based marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliates marketing efforts.
Moreover, it is also the name of the industry where a number of different types of companies and individuals are performing this form of internet marketing, including affiliate networks, affiliate management companies and in house affiliate managers and many others. The methods used include organic search engine optimization, paid search engine marketing, e-mail marketing and in some cases display advertising.
Affiliate Program Business Definition
An Affiliate program sometimes also called Associate program in layman’s terms is a system of arrangements in which an online website known as a merchant website pays affiliate websites commissions to send traffic to it. The affiliate websites post links to divert the traffic they receive to the merchant site. They are then paid depending on the affiliate agreement. The commissions may be based on the number of visitors the affiliate site sends to the merchant site, the number of people the affiliate site sends to the merchant site and clicks at least one of the product advertisements, or the number of visitors directed to the merchant site by the affiliate site and actually makes a purchase. The framework of the agreement is that the merchant pays according to the agreement the associate whenever his affiliate site brings site traffic or money to the merchant website. The recruitment of affiliates is not only a great way to sell products over the internet but it is also a great marketing strategy as it provides the merchant website a unique competitive advantage. Networking can be said to be one of the best and most effective ways to get your site famous online.
There are at least three parties in an affiliate program transaction: 1. The Customer 2. The Affiliate Site and no 3. The Merchant Site
The concept of having an affiliate program business which utilizes the World Wide Web as a marketing strategy was first announced to the public in 1996 by Amazon.com CEO and Founder Jeff Bezos. Amazon.com encourages affiliates to post links to the Amazon website in general or to specific books. Whenever someone clicks on the link and makes a purchase the affiliate who owns the link will receive a certain pre-agreed percentage of the earnings. All the affiliate need to do is to send traffic, and the rest is done by Amazon.com like order taking, money collection and product shipment. Amazon.com is not only the first affiliate program business; it is also on of the most successful with more than half a million affiliate websites.
Over the years affiliate programs have grown to epic proportions and have taken many different forms. Affiliate program businesses are now everywhere and they are found in almost every niche of the business world. Many companies specializing in e-commerce now function as merchants while those who do little or totally no e-commerce work as affiliates.
Making Money through Affiliate Programs.
Whether you are just looking to make a little extra income every month or you are making or planning to make a full time living in the world of revenue sharing, it is absolutely important for you to get the best information on the best affiliate programs and how to cash in on these top money making opportunities. There are tens of thousands of affiliate programs on the internet covering just about every product and service you could imagine.
If you are new to promoting affiliate programs and you have completed a fair trial period of the affiliate programs you started with, you are then ready to move on. What indeed are affiliate programs and how can you make money using them. These programs are also known as associate programs or publisher programs, are actually quite simple. For example some companies will pay 10% commission so if a visitor to your web site clicks on your affiliate link and makes a purchase of $100, you will be paid $10.
These type of programs that pay you per sale are normally called pay per sale affiliate programs. There are many different types of affiliate programs so not all of them will pay you per sale or a percentage of a sale. Something that those who are new to these programs do not know how to do efficiently is find high paying affiliate programs that best complement their web site. However, a much better and quicker method to finding quality programs is to search for affiliate program directories online.
Affiliate Program Business Basic Payment Methods
There are three basic types of affiliate program payment arrangements:
- Pay-Per-Sale (Cost-Per-Sale)
The pay-per-sale agreement has been popularized by the mother of affiliate program businesses Amazon.com. Under cost-per-sale the affiliate is earns commissions from the merchant each time he sends a customer to the merchant website and that customer makes an actual purchase. Amazon and many others pay a specific percentage of the sale as commission while others pay a fixed rate for every sale.
- Pay-Per-Click (Cost-Per-Click)
Pay-Per-Click is considered by many as the most popular and common affiliate agreement. Under such agreement affiliates are paid fixed rates based on the number of visitors who click on the links placed on the affiliate website that lead to the merchant website. A purchase is not required to earn commissions, all that has to be done is that the visitor clicks the link and stays for a certain time usually at least 30 seconds on the merchant website. Whatever the visitor does once he gets to the merchant site does not affect the commission.
- Pay-Per-Lead (Cost-Per-Lead)
Under the pay-per-lead arrangement affiliates are paid based of how many visitors they send to the merchant website and subsequently sign up as leads. Signing up as leads means that the visitors fill out the information request form at the merchant site. Leads are used as targets for conversion into customers or are simply sold to other companies which are in search of leads.
Affiliate Program Business Other Payment Methods
A company sets up an affiliate program based on its needs. Therefore, it is very usual for a company to have an affiliate agreement having some variations with the basic payment methods. There are also three common variations of affiliate program payment methods.
- Two – Tier programs
Affiliate program businesses that offer two-tier agreements profit through sales recruitment and commission sales hence thy have a structure similar to network marketing business or multilevel marketing organizations. In addition to the traditional commissions based on sales, clicks or leads facilitated by the affiliate’s site, commissions based on the activity or productivity of referred affiliate sites are also received.
- Residual Programs
Affiliates under this arrangement are continuously paid commissions if the visitors they get to go to the merchant website also continue to make purchases of products and services from the merchant. This king of arrangement is usually utilized by online merchants who require regular payments usually on a monthly basis from their customers.
- Pay-Per-Impression (Cost-Per-Impression)
Online merchants who make use of this arrangement which is also sometimes referred to as pay-per-view pays commissions according to the number of visitors affiliates can cause to see the merchant’s banner ad. Such arrangement has been developed as an advertising strategy but has now been adopted as an affiliate strategy.
The reduced risk is the biggest advantage of the payment methods utilized by affiliate program businesses because a merchant pays out commissions only when its desired results are met. Traditional advertising like television and radio ads as well as online banner ads are relatively risky on the part of the advertiser because they are like placing their money on a bet that the advertisements will be effective and achieve whatever they are suppose to achieve. The ad is considered as a success when it brings to the merchant more money than what was spent, but this is unfortunately not always the case. With affiliate programs on the other hand, the online merchant only pays out commissions when things are going the way he wants them. It is far easier for websites to join affiliate programs than it is for them to attract advertisers but much less risky for merchants.
Affiliate Program Business Administration
Affiliate programs are relatively simple and easy to manage, all they need is some dedication and patience because there should always be someone tracking the actual activity of all affiliate’s links to be able to provide them proper commissions.
Common data an affiliate program business should always be aware of are as follows.
- The number of people who click on the merchant site’s link on an affiliate site
- The number of people who end up buying something or performing some other action once the affiliate sends them to the merchant site.
- The number of people who see the merchant site’s banner link on an affiliate site
- The original arrangement between the merchant and each affiliate as well as changes if any.
Both merchant and affiliates need a lot of effort to enter the affiliate industry. Merchants need to actively seek and recruit affiliates while affiliates need to actively search for affiliate programs they might be interested in. Many huge and successful affiliate programs like Amazon.com even deal with their affiliates directly because the benefits they reap from their associates are more than worth direct administration. Such companies are in complete control of the payout process and the merchant is the sole entity that determines the amount of commission each affiliate will receive. In spite of this fact, these companies still attract a lot of associates due to the fact that there is no real risk or cost in their program. Affiliates simply put links up and wait for commissions.
Affiliate Program Business Networks
Affiliate networks composed of affiliate brokers serve as mediators between merchants and affiliate program websites and affiliates. They assist the associates put up the links in their websites and also track all the activity of these links as well as arrange all payments. Affiliate networks are also beneficial to merchants in the sense that they help recruit affiliates by including the merchant’s website in their online affiliate program directory. Help centers and report centrals are the common features of affiliate networks though additional features may vary.
Affiliate networks are most beneficial to aspiring affiliates because through them a wide variety of affiliate programs become available in one central location making finding a good and suitable program that fits your site much easier. Affiliate networks of course, as payment for the convenience they serve take a certain cut on each transaction they facilitate which is usually around 20% of the affiliate commission.
Any type of website can involve itself into an affiliate program though most affiliate network service agreements forbid offensive and pornographic content. Successful affiliate program businesses though referred to as merchants do no even need to make sales to gain profits. Content based affiliate businesses in fact get most of their earnings from advertisers which where attracted into advertising on the merchant website because of the high volume of traffic its affiliates are sending to it; hence there is direct conversion of traffic into profit. Pay-per-click affiliate programs are one of the most efficient means of increasing traffic.
It can be said that there are as many kinds of affiliates as there are types of businesses. Generally, any website from top sites to personal pages can take part in an affiliate program, and with the correct choices can earn themselves some money. There also exist affiliate businesses which are just actually huge collections of many affiliate programs. These sites operate by joining a lot of pay-per-click or pay-per-lead advertisement programs and then offer their visitors a portion of the commission they receive on each click or offer them a chance to win big rewards.
Becoming an Affiliate Program Businessman
The first choice for anyone wanting to involve himself in affiliate programs is whether to be a merchant or an affiliate or both. Setting up an affiliate program and becoming an affiliate merchant is the best choice for those who operate an e-commerce site and desire to improve their sales. Becoming an affiliate of several merchants is the best choice on the other hand for people who own small content sites and run them only as a hobby. The choice is likely to be influenced by the budget and the element of affiliate programs what suites your website the most.
Entering an affiliate program as an associate is quite easy. Just go to the merchant website and fill out the online affiliate application form. The form is likely to ask of your name, address, desired payment method and other personal information as well as information on your website like URL, name, and content description and then of course have you agree to the merchant’s service agreement. Affiliate networks are generally free.
Once you receive the approval of the affiliate network you are then ready to start selecting the affiliate programs that interest you. Since most affiliate programs accept affiliates at no cost al all, it is best to immediately discard all programs than charge membership fees. Once selection is complete, the merchants you have selected will then review our site and once they accept your site they will guide you step by step on the process of appropriately posting links. Payment arrangements will also be finalized during this guide. Most affiliate programs require associates to reach a minimum earning threshold before they release commissions because of the fact that the amount an affiliate earns per transaction is relatively small. This means that no payment will be received by the affiliate until he reaches the particular minimum amount. After everything is set up and all has been explained to you, you can then start working on your website to help you earn more money.
Basic Tips to Make Living From Affiliate Programs
A small group of people might have used Affiliate Programs to earn a living few years back but now the concept has changed. There are thousands of thousands people who earn their living on this and many of them are very successful earning six figure income. It is also known as referral programs or associates or partner. Different companies name it differently but the ideas remain the same. The simple idea is selling other product through your website and earning flat commission or percentage revenue sharing.
Since it offers great potential, you can see millions of people who are involved in these programs but not all are successful. I come across hundreds of website on a daily basis where I could see hundred of referrals link posted in a single website. I wonder if they make any money out of their website in this way of promoting affiliate links. I have a plan to post quality affiliate programs details in the coming days, where you can benefit with participation. However before doing so, I would like to go through basics of affiliate programs which will be useful for the beginners.
First let me explain about affiliate programs and how it works. As discussed above, this is also called as referral programs, partner or associates. When you don’t have any product to sell to your customer, this offers a great substitute to let you sell other company product and you earn a commission for that. For example, you offer advice on friendship, dating or sex topic to your website visitor but you don’t have any product to sell, it will be great to affiliate with some dating website and promote their link in your website. Your website visitor will find your link relevant and you earn a commission for that reference whenever your website visitor make a purchase using the affiliate program link given in your website. There are few programs, where you get flat commission on per visitor basis, whether they make any purchase or not are irrelevant.
There are very few programs, where you have to pay fees to become affiliate while most of them are free. There are some where they even provide you customized website to get web traffic. When you register for an affiliate program, you get a link where your affiliate ID is embedded and you need to use the same link while sending your visitor to the affiliate websites and your website visitor and sales will be tracked.
Earning Potential There is a huge earning potential and there could be many ways to earn money depending on your agreement with the affiliate programs. It could be classified into following:
(1) Pay per click: Here you get paid based on how many of your website visitor click on your affiliate links.
(2) Pay per sales: In this case you will get paid flat commission say $50 on per sale
(3) Percentage earning per sales: You will get paid certain percentage of transaction value, it varies between 10% to 75% depending on programs.
(4) Pay per leads: these programs pay their affiliates based on the number of visitors they refer who sign up as leads. This simply means the visitor fills out some requested information at the merchant site, which the merchant site may use as a sales lead or sell to another company as a sales lead. Many also pays you in slabs. For example, if you have done 100 sales in a month, you will get paid 40% of the transaction value, for 100-149 sales in a month the commission will be 50%, while for 150-199 sales the commission will be 60%.
Does it really help to become affiliate of many programs!
Not really. I have come across thousands of website who wants to make money through affiliate programs and displays hundreds of affiliate links. These sites focus only on affiliate links and do not support the program with content. These links may help webmaster to pick up some new programs but will not help your website visitor to buy any product from your link. Since most of the affiliate programs are free and easy to join and also you get free web page, people sign up for many affiliate programs and they find it difficult to focus on any product. Instead I think the best way to promote affiliate links supported with lots of content. You should promote few affiliate programs which are related to the content of your website. Also you should be careful while promoting any affiliate programs. You should concentrate only on high quality programs where your website visitor should feel satisfied with your recommendation. You should target promoting any affiliate programs with detailed review on that program. If your website visitor find that review relevant and useful, they will visit your affiliate link and conversion ratio will be very high. And if your recommended program satisfies your website visitor, there is more chance for your visitor to come back to your site and look for another review.
What I mean to say that if your website focus on dating advice, matrimonial issues etc. you should pick up programs which are dating or matrimonial websites. You can also promote books on the same subject preferably with your affiliate links of Amazon. But you should not give link of search engine Optimization Company in your dating website. This will not lead your website visitors anywhere. However when your website focuses on creating a website related stuff, you should consider search engine Optimization Company as an affiliate programs.
I also prefer to consider 3-4 affiliate programs in the same category. For example if your website discuss topics related to matrimonial issues, you should consider 3-4 quality affiliate links in this category and you should give your honest opinion for each programs with your affiliate links. Based on your review, each visitor will find different reviews useful and would like to go for your recommended product. Once they feel satisfied with your recommendation, they become your repeat customer and your website gets credibility among your visitor. This will also help you to get lot of traffic through word of mouth publicity.
So the idea is you should not focus on affiliate links, instead you should focus on your website content and your affiliate links should support your website content. so keep the content unique in your style and update it frequently.
Which Affiliate Programs to choose:
There are many affiliate programs to pick up. Many operate independently while many operate through affiliate network like commission junction or click bank etc. To start with, you should sign up with commission junction or click bank and search for the related category. You will get many programs related to your website theme and commission junction will do all to support you. They will provide you all the historical data of particular affiliate programs, banners and text links etc. You can check your report (traffic and sales data etc.) at anytime by going to commission junction website and you will get paid every month directly from commission junction.
Steps to start
— Book a domain name and web space
— Publish website based on any topic of your interest
— Search for the appropriate affiliate programs based on your website theme
— Sign up for affiliate program, write a review and publish it in your website with your referral link
— Start promoting your website through forum, classified etc.
— Work on search engine optimization and start getting traffic from search engine
— That’s it, your website visitor will help you to earn through your affiliate programs
Steps to Consider When Choosing an Affiliate Program
With the introduction of the internet, various affiliate programs have been born. But along with this, many scams have also arisen. Let’s find out the steps needed to avoid falling for an affiliate program scam. A scam can be defined as an event that occurs due to a misrepresentation or non-fulfillment of promises made by certain programs or businesses.
As a means of marketing and encouraging traffic to websites, affiliate programs can genuinely become a good source of income. However, some affiliate programs swindle people into selling their wares without paying their affiliates. Vigilant people avoid such scams by following some simple tips and looking out for the loopholes affiliate scammers are taking advantage of. Some of the points that must be considered before choosing an affiliate program are as follows:
Before selecting any opportunity, one must ensure that the merchant or the affiliate program has adequate contact information. Do not hesitate initially to inquire about the payment status. If there is no contact numbers or an email address, you can be sure that this is a good sign of an affiliate program scam.
If a Merchant asks for a joining fee or charge of some sort, be cautions. This is a good sign that the Affiliate Program is a scam. Affiliate marketing is beneficial for both the merchant and the affiliate. This is a partnership that requires no charges. The vendor wants as many genuine affiliates marketing their products as they can. If a merchant requires any sort of upfront fee, it is a good sign of an affiliate program scam.
Be sure that no Business pays higher than what is possible. If affiliate programs claim to pay a very high commissions and promise to earn you millions of dollars a month, this should be an instant alert. ‘Too good to be True’ offers are usually scams.
A fake affiliate program would collapse within six months of launching. So the best way to decipher the genuineness of a program is to watch for at least six months. Try Whois.net and type the domain name in. Check to see the domain age and how long the domain is registered for. These are good indicators of if the program has been around for a while and how long the owner intends to keep the site live. Most scammers that setup an affiliate program will only register a domain for a year. Also if the program is genuine, it would keep a clean record of the commissions paid in the past. New affiliates can always check these commissions and validate with other affiliates. Another way of checking the validity of affiliate programs is by visiting online forums or reviews sites and getting feedback on them.
By following these simple tips you can avoid from falling into the trap of marketing an affiliate product only to see your effort be eaten by the void of a scam and your profits filling the scammer’s pockets. Always select legitimate affiliate programs and keep track of all your affiliate activity.