theaffiliates4u

Many online merchants have built successful affiliate programs for their online stores. An affiliate program involves paying owners of other Web sites a commission for referring customers to your online store. In other words, you reward other Web sites for sending new customers to you. The idea is to find Web sites with visitors who are likely to be interested in your products. To this end, Web site owners usually try to find merchants who sell products or services related to their own Web sites. A Web site with movie reviews may try to affiliate with a merchant who sells movies, and a Web site devoted to golf may align itself with a Web site that sells sporting goods or athletic apparel. It’s in a Web site owner’s best interests to identify merchants with compatible products because it will increase the likelihood of making lots of sales. For example, suppose you sell travel guidebooks. You could sign up travel agencies to your affiliate program and invite them to create links from their Web sites to yours. You would then pay the travel agencies a commission on any book sales and/or leads you get from their customers.

Online retailers with affiliate programs compensate customers in different ways. Some merchants pay affiliates strictly for sales (pay-for-sale), while other merchants compensate affiliates simply for sending a potential customer their way (pay-per-lead). Other programs may compensate affiliates if a person clicks on an advertisement, regardless of whether that person turns into a lead or ends up purchasing a product. This is called a pay-per-click program.

Affiliate programs can be extremely powerful because they allow you to increase your revenues by having your brand name displayed on dozens if not hundreds of complementary Web sites. There are literally thousands of affiliate programs on the Web. For an example, visit the online store for Staples (www.staples.com) and read about their affiliate program. Web sites that sign up can earn a percentage of every sale for referring customers to Staples.com.

There is no cost for affiliates of Staples to sign up, but they must first agree to the program’s terms and conditions and then complete an online application form that requests information about their Web site. If a Web site is approved into the program, Staples will provide the owner with a selection of Staples.com graphics that can be placed on the Web site and linked to Staples.com. Every time someone clicks on the link and proceeds to buy something from Staples.com, the Web site owner will be paid a commission. Staples.com says its affiliate program has been a success, with over thirty thousand Web sites signing up since the program was first created.

The commission that you offer your affiliates is up to you. Some firms, like Staples, offer a percentage of sales; other firms offer flat fees. Commission structures can range from less than 1 percent to as high as 50 percent. Flat-fee commissions, on the other hand, can range anywhere from $0.05 to $50.00, or more.

Affiliate programs are popular because they’re an inexpensive way of attracting customers to your Web site. In essence, you are getting other Web sites to market your online store for you. Moreover, it doesn’t cost a lot to get such a program underway. Best of all, you may only have to pay affiliates if they generate sales or leads for you.

Affiliate programs do have a number of drawbacks, however. It can be a burden to keep track of all of your affiliates and process all of the commission checks. Keep in mind that the number of affiliates you have really has no direct bearing on how successful your program will be. For example, even though Staples.com has over thirty thousand affiliates, what really counts is the number of affiliates that are sending significant amounts of business to Staples.com. A lot of online stores have found that many of the Web sites that sign up for their affiliate programs bring in very little business. That is why when you are setting up an affiliate program, your focus should not be on signing up as many Web sites as possible, but finding those Web sites that can generate the most sales for you. Obviously, it’s hard to screen Web sites in advance but eventually you will discover which affiliates are valuable and which are immaterial to your business.

As you might imagine, setting up an affiliate program can take a lot of time and effort, especially once you begin to sign up hundreds of affiliates. You need to screen applicants, track sales from each affiliate, prepare commission checks, and spend time on other administrative functions that take you away from running your online store. For this reason, many online retailers hire organizations called affiliate program providers that specialize in running affiliate programs on behalf of online stores.

We’ve listed some of the more popular affiliate program providers in the table below.

My Affiliate Program : www.myaffiliateprogram.com
Affiliate Program Providers : Commission Junction : www.cj.com
LinkShare : www.linkshare.com

The cost of using an affiliate program provider varies depending on the affiliate provider. For example, some companies charge a one-time fee plus they receive a monthly commission based on a percentage of affiliate sales. Others may charge a one-time setup fee, an annual renewal fee, plus a percentage of your payout – the amount of money you pay your affiliates. Still others have no set up fee, or commission charge but have a flat monthly fee. Which affiliate program provider is best? It all depends on what you are looking for. Services and program features vary from one affiliate program provider to the next, so make sure you carefully consider all your options before making a final decision.

One of the major benefits of using an affiliate program provider is that these organizations will help you find Web sites that can begin linking to your online store immediately. If you’re a small business with very little brand name recognition, how is anybody going to find your Web site to learn about your affiliate program? Affiliate program providers maintain a directory of participating online stores so that interested Web sites can quickly find merchants they want to work with. If you’re interested in setting up an affiliate program for your online store, start by getting in contact with the various affiliate program providers we listed earlier in the guide. When comparing affiliate program providers, think about the following questions:

How much does the affiliate program provider charge you to set up an affiliate program?

As explained earlier in the guide, affiliate program providers have different pricing schemes, so make sure you understand how you will be charged. Also find out if there is a minimum escrow amount that you must give the affiliate program provider (this money is used to pay commissions to your affiliates).

What types of affiliate programs are offered? As noted earlier, there are three basic types of affiliate programs that you should be familiar with:

1) pay-per-click programs — you pay a Web site for referring a visitor to your online store regardless of whether a sale results or not

2) pay-per-lead programs — you pay a Web site for referring a visitor to your Web site to fill out a form or perform another action that may lead to an online or offline sale

3) pay-per-sale — you pay a Web site for referring a visitor to your Web site who immediately buys a product or service

What type of performance tracking is provided? How sophisticated is the performance tracking? What information do the performance reports contain? How frequently are the reports updated? Are the reports delivered by e-mail in addition to being available on the Web?

How user-friendly is their affiliate management software? What account management features does their software offer? How easy is it for you to update or replace the ads being served by your affiliates?

What tools exist for communicating with your affiliates, both through the affiliate program provider’s Web site and by e-mail? Can you target certain affiliates with special offers?

Who issues the commission payments to your affiliates? Do you have to, or will the affiliate program provider do that for you?

How does the affiliate program provider guard against fraud? For example, what happens if the same person clicks on a link to your Web site 50 times – do you have to pay for that?

Is there any flexibility with regard to payout rates? Can you customize payout rates for different affiliates or do you have to give the same commission structure to everyone?

Does the affiliate program provider offer any client services to assist you with the implementation of your affiliate program, or are you expected to do it on your own? What technical support is available for both affiliates and merchants? Are any consulting services offered?

How easy is it for Web site owners to join an affiliate program and create links from their Web sites to yours? To get the answer to this question, we recommend you visit some of the leading affiliate program providers’ sites and try signing up with some of their merchants. By doing this, you’ll get a first-hand look at how the process works from an affiliate’s point of view.

What types of link options are available for your affiliates?

Does the affiliate program provide support for e-mail-based affiliate programs? For example, how easy is it for an affiliate to include links to your Web site in their e-mail messages to customers?

How many affiliates are part of the company’s network? What is the company doing to f
recruit new affiliates into their network?

If you decide to work with an affiliate program provider, don’t rely solely on its Web site to promote your program. You should also promote it on your own Web site and get other Web sites excited about the possibility of joining your affiliate program. For a good example of how this can be done, visit the Web site of Shari’s Berries (www.berries.com) and read the section on its affiliate program.

One final note about affiliate programs: many merchants, in addition to running their own affiliate programs, have become affiliates of other Web sites in order to generate some extra cash. If you are thinking about becoming an affiliate of another Web site, we recommend that you proceed carefully. Having an advertisement for another company on your Web site can compromise your image and credibility. Sometimes, the mere presence of an advertisement on your site can make you look unprofessional to potential and existing clients, especially if it promotes products or services unrelated to your current line of business. Accepting advertising for another company is an implied endorsement for that organization and its product or services. Make sure that you are prepared to make that type of public statement. Keep all of these factors in mind when considering whether to accept advertisements for other merchants on your Web site.

This advice may seem contradictory since the whole purpose of an affiliate program is to get other Web sites to display advertisements for your company. Won’t they look unprofessional by displaying advertisements for you? Maybe. When you create an affiliate program, you have to keep in mind that you’re inviting other companies to display your brand name on their Web sites and it’s never a good idea to let another company take control of your brand name. Sometimes it’s hard to control how your affiliates display your advertisements, and in what context. When launching an affiliate program, make sure you carefully screen your affiliates. In addition, you may want to build some rules into your affiliate program so that you have some recourse in the event that an advertisement for your company is being presented in a way that you find objectionable.

Source: Online Marketing Strategies: 16 Proven Ways to Grow Your E-Business by Jim Carroll and Rick Broadhead

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Wednesday, July 30, 2008

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