You want to take your site to the next level. If you have a content-driven Web site, how can you make money off your traffic? If you are an online merchant, how can you get people to your site to buy your products? One popular option that serves both of these functions is an affiliate program.
More people are discovering the power of affiliate marketing to supplement or even replace their existing income. But there are even more people who would like to have a slice of this exciting opportunity but are unsure exactly what an affiliate program is or how they can benefit from it.
Affiliate programs are a type of partnership between a seller and an advertiser.
The advertiser directs visitors to a seller’s website and as compensation for the traffic, the advertiser receives a percentage of the revenue generated from the visitors coming from the advertiser. The advertiser is said to be an affiliate of the seller.
When discussing an affiliate program, it helps to compare it to a traditional networking company where a network of salespeople and distributors are recruited to sell products to across the globe.
In essence, the affiliate programs found on the internet are distribution and sales efforts taken to the online world. The affiliate website takes the place of the distributor and sales network, and the individual is paid by the seller of the product when a sale is made. Of course, there are affiliate programs where physical products have to be shipped, but there are also many other affiliate programs where only software or informational products have to be downloaded.
The percentage paid by the seller to the affiliate is set by the seller and varies depending on the type of products, the profit margin of the products sold, and how keen the seller is to promote his or her products through affiliates. Percentages anywhere between 10% and 75% are common.
The advantage for the seller includes additional sales and that the seller knows exactly what margin he or she will have on products sold to visitors coming from affiliates. If the seller markets his or her products through advertising using sponsored links, banners, or text ads, the seller does not know before starting a campaign what number of sales will be generated per dollar spent on advertising. Thus, the seller does not know if the campaign will pay off or not. With sales generated from affiliates, the seller knows exactly what percentage of revenue from a sale goes to the affiliate and therefore knows exactly how much is left for profit. A seller who offers an affiliate program can have hundreds or even thousands of affiliates.
For the affiliate, participation in an affiliate program allows the affiliate to make money without having a product to sell. For the affiliate, revenue can be generated simply from attracting visitors. The affiliate does not need to worry about procuring or shipping products or about providing any kind of support to the buyer. The affiliate has a wide range of choices for how to attract visitors. In a common setup, the affiliate has a website from which visitors can be sent to the seller’s website. The affiliate may also have a blog that generates so much traffic that it pays off to direct its users to a seller’s website. Since blogs can be created for free, this might seem like an attractive option for affiliates. Additionally, an affiliate may direct traffic to a seller’s website by advertising using banners, text ads, or sponsored links as available through Google AdWords, Overture, or other similar services. If the affiliate attracts visitors from such advertising only, the affiliate does not need to create a website or blog and so does not need to create any content for such.
Affiliate programs and paying commissions to the affiliate can be supported by third parties or be handled directly between the seller and the affiliate. If paying of commission is handled directly between the seller and the affiliate, the affiliate normally needs to sign up for the affiliate program on the seller’s website. In the case of third parties handling payment of commission, it is common that no agreement needs to be set up between the affiliate and the seller. The third party, however, will then have separate agreements with the seller and with the affiliate. Commissions are normally paid by check but in some cases, it is delivered via PayPal or wire transfer.
Affiliate programs use tracking to record a visitor’s IP address when the visitor follows a link provided by the affiliate to the seller’s website. If a purchase is made and payment is collected, the visitor’s IP address is recorded again. The tracking system will automatically match the two IP addresses and often, the commission can be paid instantly. In some cases, a cookie is stored on a visitor’s computer when a link is followed and then it is used to identify the source of the visitor.
In short, affiliate programs allow sellers and affiliates to share the revenue generated for sales from sellers’ websites. These programs, when administered correctly and effectively, can generate considerable income for both parties.
Psycray can provide you with a complete guide on how to make money online with the best affiliate programs. Here you find extensive resources on affiliate marketing. We review and compare all top affiliate programs and rank the best ones. We have all the information you need to take full advantage of affiliate programs.