Making Money with Affiliate Programs – Part I

Nowshade Kabir If you have a website and you are not involved in any of the
thousands of affiliate programs available on the Internet, you
are loosing great opportunities to make some extra income. As in
the case of some top affiliate marketers this extra income might
even transform into thousands of dollars.
Affiliate program is one of the most effective methods of
producing sales second only to direct mail. According to
Forrester Research, a marketing research company, in this year
21% of all online sales will be generated from affiliate sites
promoting affiliate products.

If you do your homework right, you too can earn handsomely from
the correct use of affiliate programs.

What is an affiliate program?

The concept of affiliate program is based on the age-old
business practice of referral service. This is quite common
in many industries. An attorney, for example, gets a certain
percent of commission if he refers a client to another lawyer.

Back in 1996 Amazon.com started the first widespread use of
referral service on the Internet. If a client comes to Amazon.com
and buy a product using a link provided by Amazon, from a website
which signed affiliate partnership agreement, that site receives
10 to 15% commission from the sale. The Amazon Affiliate Program
became so successful that it prompted others to follow the suit.
Today, affiliate programs became ubiquitous on the Internet making
them one of the primary methods of online marketing of products
and services.

Affiliate Program can be defined as Internet marketing system
where a company allows and helps third party websites, called
affiliates to post link and refer clients in return for a
predetermined flat-fee or percentage-based commission.

Benefits of affiliate programs

Affiliate Programs became so popular because as a partnership
it’s a win-win situation for both the program owner and the
affiliates.

Benefits for program owners include:

Increase Sales
The primary reason for most of the companies to adopt an
affiliate program is the possibility of boosting sales. In fact,
proper implementation of a quality affiliate program is capable
of increasing sales dramatically.

Free promotion
A successful affiliate program can easily become the largest
traffic generator for the company website. Many websites receive
major portion of their visitors from their affiliate links.
To find suitable websites with required content in order to run
a banner or link campaign is time consuming and require large
resources; affiliate programs in comparison can resolve this
issue often with a far smaller investment.

Increase search engine ranking
Search engines, Google in particular, calculate link popularity
as one of the main factors in their ranking algorithm. Backward
links from affiliate sites certainly help improving this.

Branding
Thanks to its affiliate program Amazon.com banner links can be
seen on numerous websites. Popularity of Amazon.com among the
newcomers to Internet proves that Amazon.com was successful in
creating its online brand name. No doubt, omnipresent visibility
of their logo on the affiliate sites definitely had a huge impact
on the brand recognition of the Amazon. Offline companies had to
spend billions of dollars of advertisement money to get similar
results!

How about the affiliates? What are the benefits they get from
an affiliate relationship?

No product or service to carry
Online business with your own product or service might be
rewarding, but it requires substantial investment from your
part. With carefully chosen affiliate programs you can have your
online business without the requirement of having your own
products.

The investment is low as all you need is a website.

No need to have a merchant account
Since you don’t carry your own products or services you do not
have to go through the hassle of having a merchant account to
cater your clients. Your affiliate program owner will do everything.
All you have to do is supply clients through your designated link.

Possibility of residual income
Many programs pay you a commission from the sales made to the
customers generated from affiliates, who have signed up as an
affiliate following your link. This kind of affiliate system is
called 2-tier system.

Visitor tracking system allows affiliate programs to pay you a
commission when same visitor from your website makes repeat
purchase.

Some affiliate programs that promote monthly or yearly
subscription services pay a commission each month as long as
customer referred by you stays subscribed.

Complement you website with added products and services
If your site is dedicated to certain products or services,
there must be other stuffs that go well together with your
own products. It’s a good idea to seek out viable affiliate
products of these items and promote through your site. Your
visitors will love this and this will help building loyalty
among your visitors.

Have new contents for your site
many affiliate programs supply you with valuable marketing
materials. Some of these materials can be nice addition to
your site content bringing further value to your website.

Various Affiliate programs

There are two ways of running an affiliate program:
The company owns and handles the program itself, using
certain software.

The company uses third party administered affiliate programs.
The reasons why many companies prefer to hand over management
of their affiliate programs include technical aspects, cost
factor and human factors.

– Companies do not have to spend money on developing, running
and updating the software.
– Proven technology allows companies to concentrate on their
job of selling their products and services.
– Many prospective affiliates prefer third party managed
programs, because they rightfully ponder, in this case the
program owners have less chance to cheat their affiliates.

Find below a list of some leading third party affiliate program
administrators:

http://www.befree.com
http://www.linkshare.com
http://www.cj.com
http://www.clickbank.com

However, this does not mean that you should avoid company run
affiliate programs. On the contrary, some of the most successful
and best affiliate programs are run by the owners.

If you find an affiliate program that suits your requirement
and you feel that the company is a reputable one, by any means
you should give it a try!

About the Author

Nowshade Kabir is the founder, primary developer and present
CEO of Rusbiz.com. A Ph. D. in Information Technology, he
has wide experience in Business Consulting, International
Trade and Web Marketing. Rusbiz is a Global B2B Emarketplace
with solutions to start and run online business.
You can contact him at mailto:nowshaderusbiz.com,
http://ezine.rusbiz.com, http://www.rusbiz.com