Affiliate Marketing - A Basic Introduction for E-Merchants

[mandy]

Affiliate Marketing - A Basic Introduction for E-Merchants
By Chuck Lasker

One of the most popular methods of web site marketing is called Affiliate Marketing. Affiliate marketing is a method of paying "affiliates," who are basically online sales people earning commissions based on sales from their referrals. Commissions are usually a percentage of the referred sale, but may include pay per click or a set dollar amount per referral. Once an affiliate signs up, they place some form of advertisement on their site. An example of this process follows.

A music review site applies for the Apple iTunes affiliate program, which pays a 5% commission on referred sales. Once approved, Apple gives the new affiliate a special URL to use that includes their affiliate code. The music review site places some text, maybe some graphics and banners, in their site that links to the iTunes site with their URL. Apple site uses the special URL/affiliate code to track sales that are referred by the music review site, and sends monthly checks to the affiliate for 5% of those sales.

Examples of highly successful affiliate programs to look at and learn from are amazon.com, landsend.com, buy.com, clubmom.com, allposters.com, and ehealthinsurance.com.

Becoming an affiliate is easy. There are thousands of programs available. Beginning your own affiliate program at your site is more difficult. Done right, your affiliate program can boost sales many times over, or even become your sole source of sales. Done poorly, and you can waste a lot of time. It is worth studying, preparing and even hiring help to do it right.

Affiliate Marketing requires a serious commitment. Affiliates are basically a sales staff that uses their site to sell your products and services. So, as sales people, they need ongoing sales management. This could be in the form of e-newsletters, personal e-mails, telephone contact, being available to answer questions, providing training and advice, creating incentives to keep them motivated, etc.

To set up an affiliate program, you must answer some questions:



How much are you able to pay in commissions? Keep in mind that you’ll probably want to have occasional short term incentive programs with increased payouts.

Do you want a few strong, committed affiliates who have the ability to bring a lot of traffic, or many affiliates who may each bring only a few referrals?

Will you set up your own affiliate tracking system (www.myaffiliateprogram.com, www.vikingcoders.com), or will you contract with an affiliate tracking company (www.ecomaccess.com, www.clixgalore.com, www.directtrack.com, www.cj.com, www.linkshare.com, www.performics.com, www.kowabunga.com)?

Will you manager your affiliates yourself, or hire a third party affiliate management company (www.team-affiliate.com, www.affiliatemanager.net, www.partnercentric.com)?

When setting up an affiliate program, keep in mind these items:



You need an affiliate agreement that protects your rights, especially your trademark rights, and provides affiliates with the confidence that they are protected, too. The affiliate agreement is highly important in attracting professional affiliates, so give it serious attention. Look at the agreements on other affiliate programs, and hire a professional and/or a lawyer to do it right the first time.

Affiliates will only promote high conversion sites that provide superior customer service. Is your site ready to respond to affiliate referrals? Some affiliates might send an e-mail to 50,000 people and your site could get hit hard and fast. Be prepared.

Affiliates expect fast and accurate payment and solid reporting of their results. Test your software for accuracy before beginning your program. With thousands of affiliate programs available, affiliates won’t stick around if they believe they are not being properly paid.

You need to provide the proper tools for your affiliates to succeed. These might be sample text to put into their sites, product graphics, logos, banner ads, and even customization of your site for each affiliate.

Once you commit to an affiliate program, and you have your program set up, it’s time to find and recruit affiliates. There are many methods:



Place a link, or even a banner ad, on your site promoting your affiliate program. Your best affiliates might be your customers.

Look for non-competitive, related sites, especially content sites, and invite them to join your affiliate program.

Public relations – press releases to news sites, content sites and blogs in your industry.

Go to abestweb.com and purchase an announcement for $50. Be sure to look through previous announcements, as well as the responses they’ve gotten, so your announcement gets the response you want.

Look for other announcement services, such as www.affiliate-announce.com/ and www.makelinks.com/.

Promote with Google Adwords and Yahoo Search Marketing pay per click programs.

To learn more today about affiliate marketing, go to: www.abestweb.com, www.revenuetoday.com, and www.affiliatetip.com.

As an e-commerce consultant for over three years, and Web designer for over ten, Chuck Lasker has been helping individuals and organizations utilize the Internet in almost every arena. Chuck's e-newsletter and blog, The MerchantHowTo.com Report, at http://www.MerchantHowTo.com, is free and popular amongst e-store owners.

Article Source: http://EzineArticles.com/

[bargainbloodhound]

There is a glaring omission in that article: the subject of affiliate fraud.  During 1998-2001 when we used to use a combination of Commission Junction, ClickXchange, and ShareASale to run the affiliate programs for our sites we were losing $1000s of dollars a year due to being ripped off by fraudulent clicks and sales leads by our affiliates.

Here's an article from earlier this year on preventing affiliate fraud.  Do a search  and you'll find several other articles/sites on the 'net with tips on how to prevent/reduce affiliate fraud if you setup an affiliate program for your business.