Affiliate Marketing What Is It And Why Use It?
Affiliate Marketing is having Affiliates do your Marketing for you. What I mean by Affiliate is someone who tells people about your product/service and you pay them for a desired response, such as a purchase.
Affiliate Marketing is one of the best ways to get the word out about your product/service.
The best way to pay Affiliates is pay per sale. This means that you only have to pay your Affiliates when they actually make a sale. This reduces your advertising costs dramatically. your Affiliates take on all the risks so you don't have to worry about wasting your money on advertising which may not produce any results.
Using Affiliate is a very cheap way to advertise, however it is very effective. The software required to start up your own Affiliate program can cost only about $50 per month.
Then after that just wait for people to start promoting your product/service for you.
Please remember that 5% of your Affiliates will do 95% of the selling. What I mean by this is that most of your Affiliates will just sit there and do nothing. This can be countered if you teach them what to do, exactly how to do it and providing everything for them so they have to do as little work as possible.
To find out about teaching your Affiliates please see the "How To Super Charge Your Affiliates" article
You don't have to use this form of advertising just to sell your product or service. You can also use it to grow your opt-in mailing list. This is discussed in another article.
How Much Should You Pay Your Affiliates
How much you pay your Affiliates really depends on how much your product/service costs, its profit margin, how much you're willing to give up and what action you want to take place.
Lets say that your product is priced at $100. Lets also assume that it cost you $10 to make it. This leaves you with $90 profit.
How much of this do you want to give away to the person that made this sale possible?
Personally, I believe that you should give a rather high percentage of the profits back to the affiliate (Depending on how many sales they regularly generate), because without them, you wouldn't have made that particular sale at all, so reward them for it.
A fairly decent reward is about 50% of the revenue generated. Your product is priced at $100 so a $50 commission is quite generous. It really depends on your other costs (such as a mortgage) you have, which would help decide on a fair commission to both you and the Affiliate.
Another factor which plays a part is how much additional advertising you do, such as pay per click. For example, if you rely solely on your Affiliates to Market for you, then you may want to reduce the commission you pay to them to help you survive. However, you may want to pay them more, to encourage them to send more sales you way. It really is a judgment call.
On the other hand, if you advertise in other ways effectively, then you can afford to pay higher commissions, because you're not putting all your eggs in one basket.
In the end it's all down to how greedy or generous you are. The best advice I can give you is to pay the affiliate what you think he/she deserves. Hopefully that way everyone is happy and earning their fair share.
That is the key to a successful affiliate program.
By Stephen Warren, the creator of http://www.marketershandbook.com, the completely FREE guide to marketing online, with useful articles and links.
Latest News
Affiliate of Pentland Enters Into Monetization Transaction FOXBusiness - The monetization transaction (the "Transaction") permits Pentland and its affiliates to monetize a portion of their holdings of these shares in order to ... |
Rally Software Awarded Affiliate Company of the Year by ... MarketWatch - (R), the Agile lifecycle management leader, was awarded the 2008 Affiliate Company of the Year by Entrepreneurs Foundation (EF). Rally was selected for this ... |
New Relic Launches Affiliate Program PR Web (press release), WA - Eight companies and one Rails community user group have already joined the program as charter affiliates. The charter affiliate companies are Atlantic ... |
PubEasy Adds Southern Book Service as New Affiliate Partner MarketWatch - As the newest PubEasy affiliate, the company will now be able to offer their customers the ability to check price and availability on various book titles, ... |
CJRW and Burson-Marsteller Sign Affiliate Agreement MarketWatch - CJRW is currently Burson-Marsteller's only US-based affiliate. Through this relationship, CJRW clients will have access to Burson-Marsteller's global ... |
T-Shirt Monster Launches Affiliate Program for Web Owners and Blog ... Emediawire (press release), WA - T-Shirtmonster.ca, Canada's leader in online T-Shirt customization, launches it's Affiliate Program for blog publishers and website owners looking to ... |
Vaporizer Store - VaporNation Announces Vaporizer Affiliate Program 1888 Press Release (press release), TX - VaporNation.com presents Vaporizer Affiliate Program. It is a program that helps in developing a network and earning in the process. ... |
Court blocks Sprint Nextel affiliate iPCS’s motion to delay WiMAX deal Bizjournals.com, NC - s $14.5 billion WiMAX deal can continue — for now — without trouble from affiliate iPCS Inc. An Illinois circuit court said Monday that iPCS must withdraw ... Sprint affiliate backs down in Wimax case Clearwire Path Clears OMS: We are not a telco, says Xohm |
Purdue Research Park Affiliate Company Launches Educational ... MarketWatch - The new program is available from Computer-Aided Learning LLC, which is an affiliate company of the Purdue Technology Center of Northwest Indiana. ... |
The Whitlock Group Achieves IOCOM Preferred Affiliate Status MarketWatch - With this Preferred Affiliate status, The Whitlock Group has enhanced flexibility in using IOCOM's products to deliver sophisticated videoconferencing ... |
Resources
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