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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.
TechCrunch
TechCrunch
Will a few dollars in affiliate revenue motivate people enough to use Refer.ly? Don't we just share products with friends and family because we genuinely love to help other people out? Morrill said she doesn't expect Refer.ly users to make a living off ...
Danielle Morrill leaves Twilio to start Y Combinator-backed ReferlyGeekWire
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MarketWatch (press release)
... online marketing expenses, and increased hotel commission payments to third-party affiliates and distribution partners. Sales and marketing expenses increased to 43% of net revenues in the first quarter of 2012 from 35% in the same quarter of 2011.
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Chicago Tribune
Scripps Networks Interactive, parent of Food Network, HGTV and The Travel Channel, said strong advertising and affiliate revenue boosted profit last quarter despite hefty programming costs. Net profit rose to $115 million from $101 million.
Ad & Affiliate Revenues Boost Scripps ResultsWorld Screen
Scripps Networks 1Q Net Up 14% On Stronger Ad RevenueWall Street Journal
Scripps Networks Interactive reports first quarter financial resultsMarketWatch (press release)
Zacks.com -NASDAQ
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Huffington Post
My local affiliate has been making its quota for the last four years running. There is a lot of concern from me and others on the mix of ads, sponsors, and reviews on the NPR website.. I sent the NPR Ombudsman, 72 screen grabs documenting how sponsor ...
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KPVI News 6
In the case of KFXP, the fees are higher than the advertising revenue the station currently brings in. The local Fox affiliate in Twin Falls, KXTF, is also losing its network affiliation. At this point it's not clear how people in eastern Idaho will be ...
KXTF in Twin Falls will no longer broadcast FOXKTVB
Fox TV Programming to End in Magic ValleyNews Radio 1310 KLIX
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Reuters
Bumrungrad posted a 40 percent increase in quarterly profit to 583 million baht thanks to growth in outpatient revenue, an increase in foreign patients and profit sharing from affiliate hospital Bangkok Chain Hospital Pcl. The broker raised its 2012 ...
and more »
Business First
KentuckyOne Health, which was formed this year by the merger of Louisville-based Jewish Hospital & St. Mary's HealthCare Inc. and Lexington-based Saint Joseph Health System, is an affiliate of Denver-based Catholic Health Initiatives.
and more »
Wall Street Journal
Wall St. Cheat Sheet
Two questions first on the affiliate revenue growth, 8% in the first quarter, two things there. Number one, it is an acceleration from your full year rate from last year. Does that acceleration represent some – or is that primarily due to some of the ...
AMC Networks 1Q Net Rises 45% On Strong Advertising RevenueWall Street Journal
AMC Reports Higher First-Quarter EarningsBroadcasting & Cable
AMC Networks quarterly profit jumps 45%MarketWatch
Chicago Tribune -paidContent.org -MediaPost Communications
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Malaysia Star
BANGKOK: Asia Aviation Pcl, owner of the Thai affiliate of Malaysia-based budget carrier AirAsia Bhd , has set an IPO price of 3.7 baht (37 sen) a share to raise 4.5 billion baht (RM443mil) in the Thai market this month, sources close to the deal said.
and more »
Centralia Chronicle
Danielle Morrill's been thinking about this idea for at least three years. I know this because it was almost all she could talk for an hour straight at a dinner party several years ago. An online service is needed to view this article in its entirety.
and more »
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