Using an Affiliate Program To Make Money

Aug.11, 2010 in Internet

Affiliates are the real moneymakers of businesses. It’s called word of mouth marketing and you can expand your business through people who refer new customers in exchange for a percentage of the profit. The first thing to do is to set up your affiliate system. The following are the things you must take note of when you’re managing your own affiliate program.

Product Prices

Proper pricing is crucial if you plan on splitting the revenue with affiliates. Strike a balance between reasonable pricing and generous incentives. Price becomes a non-issue only if you’re selling virtual (downloadable) items. But if your products have to be delivered and inventorized, you need to make sure the price covers the costs before you think of splitting the profits with affiliates.

Affiliate Incentives

You must make sure the incentive you’re offering will attract the most aggressive affiliates. The thing is, these affiliates are not employees. They get paid only after they make a sale. If your incentives are not exciting enough, affiliates will go to your competitors.

Affiliates will work hard for you if they know they are being rewarded fairly for doing so. Affiliates will be working for free for your in exchange for a percentage of the profit. The best affiliates set up websites to promote your products, and those things cost money. Do a little research by finding out how much your competitors are giving out.

Compute the amount you spent on product development, and include this factor when setting a percentage for your incentives and commissions. The average commission for digital products like ebooks and MP3s is 50-70%. If you’re selling software, you can give 20% commission because you may have to hire someone for updates and maintenance. For physical products, you can give around 10-25% especially if you’re in a competitive market like exercise machines.

Cookie Management

Affiliate programs work through the use of cookies. A cookie acts as a tracking system that automatically reports which affiliate landed a sale. Most affiliates look at the cookie duration when choosing an affiliate program to join.

Cookies are useful for when a potential customer referred by an affiliate visits the sales page but doesn’t buy anything. A non-buying customer may decide to buy only after 20 days. If the cookie’s duration is 30 days, the affiliate who referred that customer will still get commission for the sale.

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