About Affiliate Programs
Marketing What Is It And Why Use It?
by: Stephen Warren
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"
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
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
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
That is the key to a successful affiliate program.
About The Author
Stephen Warren is the creator and webmaster of http://www.marketershandbook.com,
a completely free business and marketing resource
which anyone may use.