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Affiliate
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Affiliate Marketing What Is It And Why Use It?
by Stephen Warren
Affiliate Marketing What Is It And Why Use It?
Affiliate Marketing is having Affiliates do your Marketing for you. What
I mean by Affiliate is someone who tells people about your product/service
and you pay them for a desired response, such as a purchase.
Affiliate Marketing is one of the best ways to get the word out about
your product/service.
The best way to pay Affiliates is pay per sale. This means that you only
have to pay your Affiliates when they actually make a sale. This reduces
your advertising costs dramatically. your Affiliates take on all the risks
so you don't have to worry about wasting your money on advertising which may
not produce any results.
Using Affiliate is a very cheap way to advertise, however it is very
effective. The software required to start up your own Affiliate program can
cost only about $50 per month.
Then after that just wait for people to start promoting your
product/service for you.
Please remember that 5% of your Affiliates will do 95% of the selling.
What I mean by this is that most of your Affiliates will just sit there and
do nothing. This can be countered if you teach them what to do, exactly how
to do it and providing everything for them so they have to do as little work
as possible.
To find out about teaching your Affiliates please see the "How To Super
Charge Your Affiliates" article
You don't have to use this form of advertising just to sell your product
or service. You can also use it to grow your opt-in mailing list. This is
discussed in another article.
How Much Should You Pay Your Affiliates
How much you pay your Affiliates really depends on how much your
product/service costs, its profit margin, how much you're willing to give up
and what action you want to take place.
Lets say that your product is priced at $100. Lets also assume that it
cost you $10 to make it. This leaves you with $90 profit.
How much of this do you want to give away to the person that made this
sale possible?
Personally, I believe that you should give a rather high percentage of
the profits back to the affiliate (Depending on how many sales they
regularly generate), because without them, you wouldn't have made that
particular sale at all, so reward them for it.
A fairly decent reward is about 50% of the revenue generated. Your
product is priced at $100 so a $50 commission is quite generous. It really
depends on your other costs (such as a mortgage) you have, which would help
decide on a fair commission to both you and the Affiliate.
Another factor which plays a part is how much additional advertising you
do, such as pay per click. For example, if you rely solely on your
Affiliates to Market for you, then you may want to reduce the commission you
pay to them to help you survive. However, you may want to pay them more, to
encourage them to send more sales you way. It really is a judgment call.
On the other hand, if you advertise in other ways effectively, then you
can afford to pay higher commissions, because you're not putting all your
eggs in one basket.
In the end it's all down to how greedy or generous you are. The best
advice I can give you is to pay the affiliate what you think he/she
deserves. Hopefully that way everyone is happy and earning their fair share.
That is the key to a successful affiliate program.
By Stephen Warren, the creator of
http://www.marketershandbook.com,
the completely FREE guide to marketing online, with useful articles and
links. Ambatchdotcom
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