Introduction to Affiliate Programs
This post is written for folks just starting out in the world of online business. As you may know, one of the easier ways to begin earning an income online is to use affiliate programs. Therefore, I am going to answer the question of how can I make money with affiliate marketing?
We will begin with an introduction to affiliate programs. Then move on to finding the best fit based on your content (what is written on your website). That will be followed by a short discussion on piggybacking affiliate networks and searching for new affiliate programs.
The latter topic I will touch on briefly because I have discussed it before in a recent post. So I will direct you to the relevant page for more information on affiliate networks and how to find private affiliate programs with Google.
Let’s Look at The Basic Affiliate Sales Funnel
This is how we teach folks to create a long-term sustainable business online. You choose an interest, build a website, get rankings and visitors and finally earn revenue. It is crucial to get each step right – not everyone is successful the first time but persistence always results in a financially successful venture.
The basic affiliate sales funnel is just as simple as the above diagram. It is mainly related to the last circle. Let me just say affiliate revenue is only one of the ways to monetize your website but it is the easiest. Adsense may be effortless to set up but it demands an awful lot of traffic to make any money.
Whereas with private affiliate programs or affiliate networks you can choose products with high commissions making the return on your marketing efforts worth your while. So exactly what does the affiliate funnel look like?
[ Merchant =====> Affiliate Program =====> Affiliate Marketers =====> Customer ]
This is the place which sells the product or service you are planning to sell. For example, if my blog is about iPads then the Apple website would be the merchant. My affiliate link will redirect the reader on my site to the Apple Site and if the person makes a purchase I receive a commission.
#2. Affiliate Program
The merchant creates an affiliate program. They recruit affiliate marketers to help market their product or service. We must register and be approved. Marketing materials such as banners, email swipes and the sort are often provided. Sometimes there are tools to record statistics.
#3. Affiliate Marketer
This is you, the person who is sending leads to the merchant with the affiliate program. As explained above you do this with affiliate links. Usually, there are cookies placed on the customer’s site so the merchant understands you are the one sending them the business. It differs from program to program but 30 or 60-day cookies are common.
This is the individual who learns about the product or service from the affiliate marketer. It is significant to connect with the customer on a personal level to create trust so that they do click on your affiliate links.
Why Would a Merchant Want to Initiate an Affiliate Program?
Marketing and advertising can be expensive. It makes sense that businesses would want to set up a program whereby they can have others do the marketing for them at a fraction of the cost. It saves time, energy and money. In return, it provides thousands of people with the opportunity to earn an income online.
Let’s look at an example:
Say Mark has an offline business which sells sporting goods. Nowadays most businesses have an online presence or are in the process of building one. So then Mark has a website which is set up to sell these products to customers. Let’s assume the following is true:
- The product is ice hockey sticks
- Mark’s cost per stick is $30 (fictitious number)
- Retail price is $ 150
- This would give Mark a gross profit margin of $120
Mark being the bright guy he decides to create an affiliate program to lower marketing costs and possibly increase revenue. Once again, for our model we will assume these points:
- A 10% commission will be offered per each sale.
- This means an affiliate will earn $12 on each stick sold.
- Which leaves Mark with a $108 gross profit margin
Now you may say but he is making less money. This is where it gets interesting because he has an army of efficient affiliates working for him (at no cost except the commission) he can actually end up making much more than if he had decided to pay for all his advertising.
- Mark gets 50 affiliates on board.
- Imagine each one sells an average of 10 units a day (which is realistic for top affiliates).
- Earnings per affiliate will be $120 a day or $3,600 per month
How much will the merchant make with the fifty affiliates?
(50 x 10) = 500 units x 30 days = 15000 units x $108 = $ 1,620,000
I can’t vouch for the numbers to be exact but you get the idea about why it is such a fantastic deal for the business owners selling the products to have affiliates promote their items. It is a win-win situation for everybody.
How to Find Affiliate Programs That Best Fit Your Content
The affiliate products or services you promote need to be relevant to your website content. There is no point trying to sell a bathtub if your site is only about toilets. I used to live in Japan and while I was there I became fascinated with Japanese style toilet seats.
Amazing for sure! Canada is just beginning to catch on and demand is starting to grow. We are at least five years behind the Japanese technology. Anyway, let’s use that as an example going forward.
My niche is Japanese Toilet Seats
So the content I write about needs to focus on topics such as:
- Japanese Toilet Seats (maybe best brands).
- How to Convert Your Toilet to Japanese Style
- Toilet Accessories
- And Other Related Information
Therefore, when searching for affiliate programs we need to search for any company that sells these toilet seats, accessories, retrofit kits, cleaners, remote controls and so on.
The question then becomes how do we do that? Well, there are two ways and it is probable that you will use a combination of both. The first and simplest is to use affiliate networks. The second is to use private affiliate programs.
Piggy Backing Affiliate Networks
What is an affiliate network? Simply stated it is a place that houses several merchants. The merchants offer individual affiliate programs for marketers to join. This is of benefit to marketers because visiting one location or a couple of networks makes researching a heck of a lot easier.
There are many affiliate networks but here is a list of the major players:
- Amazon Associates
- Ali Express
- Rakuten Affiliate Network (Linkshare)
- CJ Affiliate by Conversant
- eBay Partner Network
Hence, after registering as at one of the networks we could do a search for Japanese toilets. Then we would sign up as an affiliate with the merchant offering the product or service we intend to promote on our website.
There are two kinds of items available at these companies. Some such as Amazon Associates specialize in physical products. Others, for example, ClickBank narrow their offerings to digital products. A few both digital and physical.
The difference is mainly in the commissions. Digital products require far less overhead or expense to create while physical products obviously involve more expenditure to manufacture. Therefore, there is a slimmer profit margin for the latter.
The commissions for affiliates range from 1% to 15% for physical products and I’ve seen up to 75% for digital products. In any event here’s something for you to think about. It takes just as much time, effort and money to sell a product with a high-profit margin as it does for a low-profit-margin.
So whatever you decide to sell make sure the items you promote provide you with a healthy commission. Do you have an e-commerce store? Then make darn sure you only choose store products selling for over $200 – better yet $500. Otherwise, you won’t be able to cover your expenses and make a profit.
In my case as an affiliate marketer, I am promoting an honest, legitimate make money online training program with an affiliate commission of about 40%. The owners have been running the program since 2005 and have never missed a payment. This is the type of company you want. Good return on investment and reliable.
Searching For Affiliate Programs With Google
I have written in detail about several affiliate networks under the category Affiliate Money. There will be more to come as my website grows. In addition, the second most popular way to find unique affiliate programs to promote is to do a search on Google.
If you are interested in the technique please go to my blog post titled How to Earn Money Blogging in WordPress and scroll down to the section Google It Works Like a Charm.
The great thing about using this method is you may find some fabulous affiliate programs which your competitors may not know of yet. Also, they tend to be more affiliate friendly meaning fewer affiliates and a chance to really develop some good working relationships with the owners.
Special Search Hack:
If you visit a website and cannot find their affiliate program then type:
site: website name affiliate
into the search engine. it will return the affiliate program if they have one.
Conclusion to Affiliate Programs and How They Work
I hope this has answered some of your questions concerning how one can make money with affiliate marketing. It is not a difficult process to find affiliate networks and products you may want to promote. Tracking affiliate links and stats is also a breeze.
Despite that, as with any online business, I believe the most difficult part is receiving website traffic and converting it into sales. There are many parts involved in operating a successful affiliate marketing business. If you are prepared to take the next step, you must get the proper training and guidance.
This can be a very rewarding a lucrative business and with persistence, anyone can succeed. As usual, if you have any questions or advice to offer my readers, we would be very grateful to hear from you!