How Do Affiliate Programs Work?
You've heard the story before. Some local "dot-com" startup company sells out for millions of dollars and the 25-year-old wiz kid owner waltzes off into the sunset with a mansion and a new Mercedes. I'm not saying it hasn't happened, but it certainly hasn't happened to me. We're not talking about get-rich-quick schemes here. We're talking about a way to generate a steady monthly income through genuine hard work, a little ingenuity, and an Internet phenomenon called Affiliate Programs.
The Referral System
The concept is really quite simple. Everything is based on a paid referral system. Visitors come to your website, you introduce them to a product or service from a third-party vendor through a banner or text link, and if your referral decides to buy, you get paid a commission. While it sounds simple, there are a few important details to know before you begin. Let's look at an example.
Case Study
Mary is interested in scrapbooking, so she sets up a web site called Scraptips.com to share some of her ideas with others who are interested in the same thing. She begins to build up a loyal following of people who visit her site frequently for weekly tips and ideas. She signs up as an affiliate with a merchant called Scrapbook Supplies Online, and places their small banner link on her site. For each of her site visitors who clicks on the banner and visits the merchant, Mary receives $.10 per click (click-throughs) for introducing that person to the merchant services. In addition, she might receive 10% of any purchases (sales/leads) that person might make. Everyone wins.
Counting the Clicks
Right now you're probably wondering who keeps track of all these clicks and how you eventually get paid. That's where web services like Commission Junction and BeFree come in. They make the whole process simple by doing all the tracking through your personal affiliate i.d. and then send you one check at the end of the month for all your commissions. Or, you use your affiliate's tracking software to keep track of the sales and clicks. That's how the whole thing works. But at $.10 a click, can a small web site really make any money? That depends on a few important factors.
The concept is really quite simple. Everything is based on a paid referral system. Visitors come to your website, you introduce them to a product or service from a third-party vendor through a banner or text link, and if your referral decides to buy, you get paid a commission. While it sounds simple, there are a few important details to know before you begin. Let's look at an example.
Case Study
Mary is interested in scrapbooking, so she sets up a web site called Scraptips.com to share some of her ideas with others who are interested in the same thing. She begins to build up a loyal following of people who visit her site frequently for weekly tips and ideas. She signs up as an affiliate with a merchant called Scrapbook Supplies Online, and places their small banner link on her site. For each of her site visitors who clicks on the banner and visits the merchant, Mary receives $.10 per click (click-throughs) for introducing that person to the merchant services. In addition, she might receive 10% of any purchases (sales/leads) that person might make. Everyone wins.
Counting the Clicks
Right now you're probably wondering who keeps track of all these clicks and how you eventually get paid. That's where web services like Commission Junction and BeFree come in. They make the whole process simple by doing all the tracking through your personal affiliate i.d. and then send you one check at the end of the month for all your commissions. Or, you use your affiliate's tracking software to keep track of the sales and clicks. That's how the whole thing works. But at $.10 a click, can a small web site really make any money? That depends on a few important factors.
Can A Small Web Site Make Any Money?
Every web site, no matter how small, can make some money with affiliate programs. Slap on any affiliate banner or text link and you're bound to get some clicks eventually. But to really make money you have to have the right combination of key elements.
CONTENT + TRAFFIC + THE RIGHT AFFILIATE PROGRAM = $
Without these three key elements you probably won't see much in the way of income: (1) A website must be built and updated in such a way that the content brings people back to the site over and over again. (2) The affiliate programs must be related to the site content, so that the site offers are of significant interest to the visitors. (3) The referral fee must be substantial enough to make you want to promote the offer. When all three elements are in place, you are on your way.
Without these three key elements you probably won't see much in the way of income: (1) A website must be built and updated in such a way that the content brings people back to the site over and over again. (2) The affiliate programs must be related to the site content, so that the site offers are of significant interest to the visitors. (3) The referral fee must be substantial enough to make you want to promote the offer. When all three elements are in place, you are on your way.
WHAT CAN I EXPECT TO MAKE?
Click-through rates are considered good if .5% to 5% of your referrals actually buy something. You do the math for your website. If you're only getting 50 visitors a day, it probably won't ever amount to much. But if you build up your traffic so you're getting 100 to 1000 visitors a day, then you are in a position to make a substantial monthly income.
CASE STUDY
Bob's site, RCguy.com is geared to radio-controlled airplane enthusiasts. He publishes a guide to all the RC events and competitions, provides a series of how-to articles, reviews new RC products, and offers free e-mail problem-solving advice. In time he becomes the Internet "guru" for RC enthusiasts. His content-rich site is now getting 500 hits a day (15,000 a month) from all over the world. He joins an affiliate program and places a banner link to RCstuffonline.com which offers discount deals. He gets $.10 per click-through and 10% of any purchases made.
In June Bob reviews a new airplane kit and tells his readers they can get it at a great price from RCstuffonline. During that month 150 of his readers take his advice and visit RCstuffonline (150 click-throughs), of which 15 people decide to purchase the airplane kit for $200 (15 sales leads). His affiliate check for June would include $15 for his click-throughs and $300 for his sales commissions.
In June Bob reviews a new airplane kit and tells his readers they can get it at a great price from RCstuffonline. During that month 150 of his readers take his advice and visit RCstuffonline (150 click-throughs), of which 15 people decide to purchase the airplane kit for $200 (15 sales leads). His affiliate check for June would include $15 for his click-throughs and $300 for his sales commissions.
INCREASE YOUR OFFERS
While Bob isn't going to get rich from his single affiliate, it does make his computer payment, his dial-up account fee, and some bonus money that month. But he can do better when he adds five more affiliate links to other related products such as books, magazines, newsletters, etc. Why not? It costs nothing, and his efforts are now multiplied times five. He now has five salespeople working for him instead of just one.
It's easy to increase your offers, but how do you go about increasing your web traffic? Well, that's the next step and it takes more work and a little ingenuity.
It's easy to increase your offers, but how do you go about increasing your web traffic? Well, that's the next step and it takes more work and a little ingenuity.
Is There a Secret to Increasing my Website Traffic?
You will never make any substantial money with affiliate programs until you build up your traffic to a reasonable level. You should use every avenue possible to promote your website. People are going to find out about you basically through three avenues: search engines, publicity, and word of mouth.
HOW SEARCH ENGINES WORKGenerally when you want to find something on the Internet you will do a search on one of the major search engines, such as Yahoo, altavista, or Google or maybe on a meta search. Each search engine has its own way of conducting the search, but basically they're looking for keywords or phrases imbedded in your site. Make sure you use words in your title, metatags, and text that your site visitors are likely to think of in a search for you. If you want to see what works, select a few appropriate keywords and do a search. See who comes up on the first page and see how they are using those keywords in their site. Then do the same on your site. Your goal here is to get listed in the top 10 or 20 sites, as most people won't look beyond that in a search.
SUBMIT OFTEN TO SEARCH ENGINES
Many people think that search engines scour the whole Internet and if you're out there they will find you. Wrong! If you go to a search engine homepage, you will find a link for submitting URLs for inclusion in their searches. That's the first step. Submit your website to any and all you are aware of. The biggest search engine, Yahoo, accounts for over half of all web searches. Follow their guidelines carefully as they are notoriously difficult to get accepted to, but it's well worth it if you can pull it off. There are also "pay for placement" services like FindWhat.com where you can bid on the keywords that best describe your site, and the #1 position goes to the highest bidder. They're worth checking into because they can send you considerable amounts of traffic for as little as a penny per click. The best part is you can get traffic to your site fast; it only takes about 10 minutes to open an account.
SPREAD YOUR WEB ADDRESS
Although search engines account for much of your new traffic, make sure you take advantage of all other avenues. Find other websites with similar content and exchange links with them. Place your web address on every printed piece you produce. Make sure it's on your business cards, your letterhead and anywhere else you can get it. If you have unique site content, let your local newspaper know and you'll probably get a free article. The Internet is a big interest area right now.
WORD OF MOUTH IS STILL BEST
Here's the best way to increase your traffic. Give your site visitors a good reason to come back again and again. Update your site content as often as possible, and make sure those who come to your site find what they are looking for. The word spreads quickly on the Internet and your audience is as big as the entire world.
Increasing your daily traffic not only increases your affiliate opportunities but also opens up a few other income avenues as well.
Are There Other Ways to Make Money With My Website?
Remember the keys- Before looking for other income avenues, make sure you have followed the steps for affiliate success. The keys that bring success there also can be applied to other income opportunities. First of all, develop your content and increase your traffic - then choose your deal.
ONLINE STOREFRONTS
Many people are setting up online storefronts where they offer a number of different products for sale from one portal. Although this is not my favorite approach, some people are finding success this way. Many programs provide all you need to establish a storefront, select your products and be online in a few hours. People shop at your site, the program fills the orders, and you get a commission.
Many people are setting up online storefronts where they offer a number of different products for sale from one portal. Although this is not my favorite approach, some people are finding success this way. Many programs provide all you need to establish a storefront, select your products and be online in a few hours. People shop at your site, the program fills the orders, and you get a commission.
GETTING PAID TO SURF
Programs such as All advantage and gotoworld actually pay you to surf the net. You are provided with a navigation bar which contains an ad banner and search element. In exchange, you get paid so much an hour as long as the banner remains live on your screen. It's really another form of paid advertising, but it works. There's usually a limit to the number of hours you get paid, so you probably won't make much more that $20 or $30 a month. But once again, it requires no effort, so why not take it? At the very least it'll pay your Internet dial-up fee each month.
The Advantages of Using An Affiliate Network
Though not all affiliate programs are administrated through an affiliate network, there are some advantages to using ones that are. Affiliate networks take the head-ache out of tracking and receiving payment and can help webmasters concentrate their efforts on driving traffic instead of maintaining affiliate programs.
What is an Affiliate Network?
Affiliate Networks act as the trusted third party to track and report sales and traffic from ads, they send monthly payment, and often provide online tools to help affiliates optimize their performance. They provide webmasters with access to hundreds of affiliate programs all in one convenient location.
Affiliate Networks act as the trusted third party to track and report sales and traffic from ads, they send monthly payment, and often provide online tools to help affiliates optimize their performance. They provide webmasters with access to hundreds of affiliate programs all in one convenient location.
If You DON'T use Affiliate Networks
Webmasters who don't utilize affiliate networks, and use affiliate programs from independent parties may suffer from inaccurate tracking, late or no payment, and dead links and banners.
Should all Affiliates Use an Affiliate Network?
We recommend using an affiliate network to webmasters who are signing up for more than one affiliate program.
Should all Affiliates Use an Affiliate Network?
We recommend using an affiliate network to webmasters who are signing up for more than one affiliate program.
Can Affiliates Be Part of Multiple Networks?
Yes. We advise affiliates to sign up for as many affiliate networks as they would like to. Sign-up is free to affiliates and Affiliate Networks partner with different merchants. For example, Ebay uses Commission Junction to mediate their affiliate program, whereas 1-800-Flowers.com uses Linkshare. If you want to sign up for both affiliate programs you should be a part of both networks. Using multiple networks can give you access to more merchants and affiliate programs.
Are Some Networks Better Than Others?
While all affiliate networks have their strong points, we like Commission Junction the best. They have the best optimization tools for affiliates, so affiliates can make the most money possible from each click of traffic.
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