If you have ever considered trying to earn money online you probably didn’t have to look far to see all kinds of products and websites about Affiliate Marketing. Affiliate Marketing is one of the most common ways for the average person to earn and income on the internet. As you may already know an affiliate is simply an internet based salesperson for someone else’s products. Most of the e-books and internet marketing courses you have seen online were in fact probably advertised by an affiliate marketer. So whether you realized it or not you have already been involved with affiliate marketing, except you were the prospect or customer rather than the marketer.
What follows is an overview and some information most gurus won’t tell you. Incidentally, the reason why gurus who write these materials so highly recommend affiliate marketing is because they are the ones who produce (and profit from) the products that many affiliates sell. By encouraging their readers to become affiliate marketers (especially for their products) they build a virtual army of salespeople promoting and selling their e-books, online videos, and courses for them. Guru internet marketers create and sell products about internet marketing to others wishing to make money online. Indeed, courses and e-books about internet marketing are the top digital info products purchased online. So, lets take a look at the affiliate business.
Most affiliate programs will have a single commission compensation plan but some will utilize a multi-tiered system. Here’s the difference: A single commission plan will pay each affiliate a set percentage for each sale they make through their affiliate link. A multiple tiered program will pay the affiliate a commission on their own sales but also will pay a percentage on the sales of affiliates referred by the primary affiliate. For instance Mary promotes ‘Jumpin’ Juice’ for ABC Company. For every person that buys a bottle of the juice through her website the company pays her a commission. Mary also advertises for others to sell ‘Jumpin’ Juice’. Joe sees Mary’s affiliate link and want to be an affiliate himself. When Joe chooses to become an affiliate like Mary and signs up through Mary’s website Mary will get paid a percentage of all the sales Joe makes. If another tier is available Mary will also earn a small percentage on the sales of the people Joe signs up as affiliates. Now this may sound a little like network marketing but let me explain the difference.
Tiered affiliate programs generally will only offer one or two tiers. There will be a high percentage paid on the affiliates personal sales and then a small percentage paid on the 1st tier. One company I’m associated with for example pays me 50% on my personal sales and then 10% on the sales of the people I recruit as fellow affiliates. So you can see in multi-tiered affiliate programs there is not a big motivation to do a lot of recruiting. It is a nice feature though if so if you do happen to tell someone else about your program you will earn a little for doing so. Affiliate programs are focused on the personal sales volume, not recruiting. Network marketing on the other hand, goes beyond a retailing commission and emphasizes the recruiting of others who will both purchase/sell products and recruit others who do so. MLMs encourages perpetuation of recruiting by spreading the commission through multiple tiers (referred to as levels).
There are affiliate programs for virtual (digital) products, like e-books, etc. and there are affiliate programs for services and solid products. Generally virtual products pay a single commission. Services and solid products are typically where you will find multiple payout tiers. You will also find that virtual products and services will usually pay you more than solid products, sometimes as much as 70% or more. Also typically you will get paid less from companies whose affiliate programs are managed by the major affiliate networks. Often you will only earn 2%-5% on most product sales with an occasional 10% on vitamins and certain other products through affiliate networks. Needless to say often it is not worth the effort and expense to promote these products. The best most marketers can hope for is to earn a recurring commission on repeat purchases of customers they refer but not every product is a repeat sale and not every company will offer repeat sales commissions. Marketers who have succeeded with them have done so by driving massive targeted traffic to web pages they’ve created that review or compare products or services. For example, they might build a web page comparing the different types of single-serve cappuccino coffee makers and then put a purchase link for each. Another instance where affiliate networks might be useful are for those who operate a primary non-product oriented website but will advertise a link for a product. Either way, massive volumes of traffic are required for even a small response.
An important thing I want to emphasize about affiliate programs is they usually will not provide you with a recurring income. You will have to constantly look for, research and test new products to promote in order to keep the income flowing in. What is popular and very salable today probably won’t be a year (or perhaps even a week) from now. Some products are really short-run or time sensitive. The exception to the one-time commission would be affiliate programs for membership sites where you are paid each time your customers renew their subscription. You should know that member sites have a very high attrition rate however (on an average 60%-90% of members will quit within a year) so you still need to continually promote to keep members coming in to replace the drop-outs.
Why should you bother with affiliate marketing at all? Mainly because of the high percentage payout potential and the ability to earn quickly. For instance, if you sell a product that pays you say, $20 a sale and you sell 2 a day you will get a check for $1200 next month. And that is just one product. So if you sell 3 or 4 products that sell like that you would be pulling in 3 or 4 times more. By contrast, an MLM program will take you months or even years to build a network large enough to produce that kind of money. So you can see the appeal and another reason why most of the gurus teach people affiliate marketing as a primary business.
As I mentioned above, as an affiliate marketer you will constantly have to seek out new information products to sell in order to keep a steady income flowing in. Smart affiliates will seek out highly specialized niche products. The marketing competition is less fierce and since niche buyers are very devoted to their niched interest they make excellent targeted prospects. Additionally, most niche products have a very good ‘shelf life’, meaning the product is less likely to reach internet saturation and the information contained less likely to become stale. Many a marketer has made a very comfortable income online by simply finding a group of hungry niche buyers and providing those people with the info products they crave.
In closing, Affiliate Marketing certainly can be a great way to make money online but it is not as easy as some would have you to believe. You will have to work at finding products to promote, build basic websites and utilize a variety of techniques to drive traffic to your product sales pages. You will also need plenty of patience because overnight online riches are more rare than big time lotto winners. But if you take the time to learn, work hard and apply yourself you can earn a very good living online. Who knows, perhaps in time you might even become an affiliate marketing millionaire.