Does Affiliate Marketing Work?
It Does and Here’s How
Affiliate marketing can make you a lot of money – in some cases, more than you make on direct sales. The owner of a popular web site for information on women’s health averages $400 a day just in affiliate earnings. And he’s just begun. Adding affiliate marketing to your plan for an on-line business may make a so-so idea a great idea.
What is affiliate marketing?
It’s pretty simple, actually. You become an affiliate of another company that maintains a web site. You place a link to the home site on your “affiliate” site. Then, whenever a visitor to your site clicks through to the home site and performs the MDA (most desired action) you make money.
With some companies, you get a flat fee for each “referral.” Other companies will cut you in on the total spent by one of your customers. Either way, it’s totally passive income (you don’t have to do anything in addition) and it’s a great way to increase the bottom line productivity of your site. If you do it right.
How do I find companies that have affiliate programs?
There are sites that do nothing but hook up web store owners with affiliates. Two of the most popular are Commission Junction and Click Bank. These sites (and others) list hundreds of companies with affiliate programs. On some sites, you can see a list of interested companies. On others, you have to sign up and open an account first, which is no big deal.
Each affiliate agreement is different so be sure to read and understand all of the agreement a company offers. You’ll find companies that are huge, multi-national conglomerates to Pete’s Drywall, all willing to take you on as a partner in selling their goods or services.
There’s another way to become an affiliate – one that can return even more. If you see a product that you think your site visitors would buy, call the producer or the distributor of the item on the telephone or drop the company an email through its company site expressing interest in selling the company’s products on your web site.
It’s not a tough sale because it’s a “no-lose” proposition for the company – it doesn’t cost them anything – so you’re in a good position to negotiate a good deal. All you have to do is capture the sale, pass on order information to the manufacturer and enjoy your margins on each sale you make. Now, instead of being an affiliate, you’ve become a retailer buying at wholesale (usually 40% below retail) and selling at retail. This strategy has worked well for many successful sites and it’s brought in a lot more companies that now recognize the value of these affiliate marketing programs. This gives you more options, but read on. You don’t want to overdo this thing.
What’s the most desired action (MDA)?
In many cases, the MDA is pretty obvious. The visitor has to make a purchase. If the click-through doesn’t buy anything, you don’t make any money. Some companies identify a customer as “yours” for a period of time – six months to forever – and you receive payment even if the visitor returns a few weeks later.
Sometimes, however, the MDA is something other than making a purchase. In some cases, the MDA is an opt-in. If the visitor from your site signs up for a weekly newsletter you get paid. The home site develops a very nice database of subscribers and now that the company and individual subscriber have a relationship, the company can contact the new subscriber and it doesn’t fall into the spam category. Many companies use newsletters or other products (e-books, for example) as bait to build a subscriber list. They then follow up with a series of auto-responders – computer-managed e-mail campaigns – to solicit additional business from the opt-in.
Finally, the MDA may be the completion of a form. It may be an application for a new mortgage or your opinion on world events. You, the affiliate, only get paid when a visitor from your site completes the form.
From this, you can see that the MDA might be harder to achieve if it’s an opt-in or a form to be completed. These are discretionary actions. They aren’t necessities. You’ll have more success if you become an affiliate of a company that sells products. Often, these are needs-driven sales so you’ll see a higher conversion rate.
How do I know how much I’ve earned?
When you decide to become an affiliate, you register with Commission Junction and/or Click Bank and you open an account. These companies then manage all of the book work for a small percentage, of course, but you know you’re being paid what’s coming to you.
With your registered account, you can also track your progress each month. You can see how much each affiliate is making for you, how many have clicked on the link and how many have performed the MDA.
There’s absolutely no hassles or additional bookkeeping involved. All you’re doing is renting a little space on your site in return for (hopefully) steady revenue each month.
How do I choose the companies that I want to work with?
You have to do your research. Take your time. Compare programs.
For example, you’ll find a number of companies listed on Commission Junction that sell products specifically for children. If your site is “family-oriented,” you could become an affiliate of all of these companies, but some are going to draw more attention from visitors than others. It helps to know what your customers like, and what they want and need.
Now, it’s not a good idea to load up your web site with affiliate links. It makes your home page look cluttered, for one thing. But more importantly, each one of these links is a doorway off of your site. With dozens of doorways to other sites, you may find that you’re losing direct sales in exchange for affiliate earnings. Not a good idea.
You have to grow your business, your mainline, direct sales business, and view affiliate income as an adjunct to your main revenue stream. Chances are, if you load up your site with affiliate links, you’ll lose in the search engine page rank competition, too. Spiders will count up those links and, if there are too many, identify your site as a “links farm” – a site that simply contains links to other sites in order to generate PPC and affiliate income. Basically, a waste of time for the search engine user and a big no-no for site owners.
Limit the number of companies with which you partner. Select the company that offers the best terms and has the widest brand recognition within a particular product category, i.e., children’s toys, children’s furniture, kids clothes and so on. This, of course, assumes the site is kid-related, which gets us to another critical consideration when selecting companies with which you might do business.
Don’t become an affiliate of a company that sells products that aren’t related to the topicality of your own site. If you sell home furnishings, a link to a tire company, no matter how good the terms, is not going to do you any good.
First, it’s not going to generate many click-throughs because the visitors arriving on your site are looking for drapes or a couch, not snow tires. Second, and more importantly, search engines take a very dim view of this type of non-related link. Remember the prime objective of a search engine is to deliver relevant, useful results to its users. Well, if you have a link to a tire manufacturer on your home décor site, spiders will determine that’s a useless link and you’ll get spider-slammed.
Stick with links that will actually help your visitors further their searches, but don’t overstuff your site with affiliate links. It won’t deliver the desired results and you may get hurt in your PR.
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