Affiliate marketing is the process of promoting another company’s products or services for a commission. For some, affiliate marketing can feel complicated and foreign, but with just a bit of effort you could earn some serious cash.
How Affiliate Marketing Works
Anyone who has a website or blog can use affiliate marketing to generate revenue via the site. Your website likely has a general theme (baby products, electronics, clothing, etc.) and you will casually recommend products that are related to your topic. These products will link back to a company’s website, and when your readers purchase products or services via the links from your site, you receive a commission in appreciation, as it were, for driving traffic to the other site.
How You Receive Credit
In order to get paid for your efforts, you’ll need to be able to prove that buyers came directly from your site. Luckily, there is a simple technology called “cookie tracking,” which works with web browsers to store information like user preferences, login or registration information, and shopping cart contents.
In affiliate marketing, cookies are able to identify the link or ad the website visitor clicks on. When a user visits your website and clicks a product you promote (or an advertiser’s ad on your site), the visitor’s browser receives the tracking cookie that identifies the advertiser, the publisher, the specific creative and commission amount. This ensures you get paid for all of your hard work.
What to Look for in an Affiliate Program
- One way to determine your opportunities as an affiliate marketer is to consider the products and services that you yourself use and like. The makers of these products may already have affiliate programs in place.
- Make sure the program has an established presence online. Look for websites which have been online a while and are trusted before you join their program. This is essential as you want to be paid what you’re owed, on time.
- It’s vital that the program has a commission rate of no less than 20% to 25% of the product price. There are affiliate programs offering up to 65% but programs such as these are rare.
- Be aware of minimum quotas. Some programs impose prerequisites before they pay out commissions. Be sure you can match their requirements, or move on to something else.
- All good programs have excellent tracking systems; you want programs that track visitors to their site using both CGI and cookies so you always get credit for sales that originate from your site regardless of when the sale is completed.
- Look at the program’s “hit per sale ratio.” This is the average clicks or “hits” on a banner or a text link that it takes to generate a sale. This will tell you how much traffic you must generate before you can earn a commission.
- Look for programs that are “2 tiered.” A 1 tier program only pays you for the business you personally generated. A 2 tier program pays you for the business, as well as a commission on the sales generated by an affiliate you sponsor in your program.
Being a Responsible Affiliate Marketer
When you represent other companies on your website or blog, you are ethically bound to both the merchant and your readers. Keep in mind the following points, and you should create happy customers easily:
- Your affiliate links need to be relevant or logically connected to your content (if you write about frugal living, linking to luxury items will make you look foolish, at best).
- Be able to recommend anything you represent wholeheartedly, or you will lose credibility with your readers.
- Play with the ways you represent the affiliate program. Small changes in button or banner placement or even in ad sizes may make a difference to how often your readers access your affiliate program and how much ROI you see.
- Avoid any actions that will brand you a “spammer,” such as promoting poor quality goods, or you will have to fight hard to restore your reputation with your readers.
- Read the fine print in the affiliate program’s Terms of Service to make sure you fulfill all requirements.
Make sure that you review all affiliate terms. Some companies offer better compensation when accessed through an affiliate network; others make it clear that reaching them directly is to your advantage.
3. Top Affiliate Programs
Reputation matters when it comes to affiliate programs. It matters that you sign with a reputable agency that is committed to the terms of the program, and it matters that you promote responsible providers of the products and services advertised. Remember that niche merchants may be your key to revenue, and recognize these three general affiliate marketing programs, because they are among the best:
- Amazon Associates –Amazon.com offers such a wide array of products that there’s bound to be something to fit your niche. Amazon Associates is a pay-per-sale affiliate program offering affiliates a commission of up to 10% for direct sales of certain products.
- eBay Partner Network – With a vast inventory of products, eBay enables you to promote almost any product. Affiliates receive a percentage of eBay fees, rather than a percentage of the product price, and bringing new customers to eBay earns you a 200 percent bonus.
- Rakuten Affiliate Network (formerly LinkShare) – This is an affiliate network, which connects affiliates with cost-per-sale and cost-per-action affiliate programs. Since LinkShare is an affiliate network instead of a direct affiliate program, it’s an excellent choice for marketers that want to promote products and services from a wide variety of merchants.
Note that these programs primarily offer their affiliates cost-per-sale commission. Cost-per-action (CPA) affiliates are also very popular, with high conversion rates for leads or actions, and commensurate commission. Affiliate programs can be competitive and require effort to build, but they can also be lucrative, especially as you develop your network and relationships to work for you.