How to Set Up an Affiliate Marketing Program – Small Business Guide

If you are not currently doing affiliate marketing then you are really missing a trick.

Affiliate marketing evolved from the simple concept that if another website sends you a visitor and that person becomes a customer of yours then you should say thanks to the other website by giving them a small piece of the pie.

Affiliate marketing has now become a lot more complex but the basics are still the same. You want as many sites as possible to be shouting about you to their visitors so that they come and see your wares, and then in return you pay a suitable reward to that site based on your business profitability and margins.

In this article I will go through a few of the things that a newcomer should consider when setting up an affiliate marketing programme:

1) The best commission/reward structure for your business

2) The best network/s to work with based on their affiliate base e.g. the kinds of affiliates that are with them and that they tend to attract.

3) How to get visibility on the key affiliates websites and with the affiliate network.

4) Working on new promotions and incentive schemes to motivate affiliates to promote you rather than your competitors.

Deciding on an affiliate reward structure for your business The first thing to look at is your new customer recruitment costs, e.g. If over one month you spend £5000 on marketing and you recruit 100 new customers then your new customer recruitment cost is £50. Cross reference this with your customer lifetime value(if you know it) to work out how much commission you can pay your affiliates.

A Basic explanation of how you could calculate this is as follows: The customer lifetime value will be the average top line profit that each customer brings you over their lifetime.

To calculate a customers life time value the best way maybe to take a group of customers that you recruited within a months date range and to track their spend over a few years, you will lose some of these customers, but others you will maintain so you need to have a good sample size for the calculation to be worthy.

e.g.

1000 customers recruited in June 2008.

  • Over the following 2 years they spent an accumulative 1,000,000GBP therefore you have a customer lifetime value of 1000GBP
  • BUT
  • Cost of goods sold were 700,000GBP
  • Business fixed costs were 100,000GBP
  • Variable business costs were 80,000GBP

Therefore a total profit for these 1000 customers of 120,000GBP over 2 years, and a per customer profit of 120GBP/customer.

This is obviously a very rough fag packet example but it is worth doing this exercise so that you can then determine the profitability of all of your marketing channels through looking at what their cost per new business customer acquired is and comparing it to the customer lifetime value.

Anyway, to keep from steering too wide form the point of the post… From this figure you can then determine how much you are willing to spend per customer on your affiliate marketing.

You now know that if you spend 120GBP per customer acquisition then you will break even on that customer so if you build in that you want to make 50% profit and spend 50% of the customer value then you can spend 60GBP per customer acquired.

Now, if you work out the average number of orders of those 1000 customers over the 2 years then you will know your average order size through dividing total revenue by total orders.

Say for example that the average number of orders was 4 then you will have an average order size of 250GBP.

So based on this if you can spend 60GBP per new customer order then your commission level for “new” customers can be just under 25%.

However, not all orders are from “new” customers so you could do one of 2 things:

1) Decide to average out commission across all sales by saying that every 1 in 4 customers is new therefore you can pay 6% commission overall

2) Decide to have a higher level of commission on new business orders and a lower level on other orders e.g. 10% and 5% respectively (although you will need to have the backend website functionality available to track different customer segments).

As well as the cost to the end affiliate you will need to figure in a network cost. As a basic guide this is about 25-35% of the commission paid to the affiliates. Therefore if you pay affiliates £1000/month then you will also need to pay your network a fee of around £300/month so this needs to be factored in when determining commission levels.

Always set your commission levels slightly lower than you can afford so that you have the option of increasing commissions for seasonal promotions and for giving high performing affiliates added incentives etc.

What is the best affiliate network for me? The amount that the affiliate networks are willing to disclose to you will depend on your skills as a negotiator and also the potential size of your business for the affiliate networks.

Approach all of the big networks – Tradedoubler, Buyat, Linkshare, Commission Junction, Affiliate Future and Clickbank, explain that you are going to be setting up an affiliate marketing program and that you want as much information as possible on why you should go with them.

Ask them:

  • How many affiliates drove a sale for them last month?
  • So that you can compare their size and reach with others
  • How many affiliates are promoting merchants in your industry?
  • So that you can see their reach in your vertical
  • How much revenue did they drive for your entire industry last month?
  • To judge the level of bottom line success in your vertical. You should also look (if possible) at the % breakdown of the revenue by affiliate e.g. what % of revenue is made up by the top 5 affiliates? Is there a lot of long tail/small affiliate opportunity?
  • How many new affiliates did they recruit last month?
  • To judge how actively they are growing and how proactive they are.
  • How many new merchants did they recruit last month?
  • Ditto, are they an arrogant and lazy network?
  • How many merchants from your industry are with them? (good to go with the bulk as there will be a good affiiate base ready to promote you if they are already promoting your competitors).
  • Who are the biggest 5 affiliates working with them?
  • Who are the biggest 5 affiliates with them for your industry?
  • How much commission will they charge on sales?
  • Can they run multiple commission rates?
  • Can they do lead generation on a fee per lead basis?
  • What does their management fee include? How much support and help can you expect from them with affiliate recruitment/reporting/problem shooting/industry updates?
  • What technology do they offer that is unique to them?

If you can get a fair bit of detail on all of these questions then you should be in a good position to approach the negotiating stage and play them off against each other. Obviously the amount of leverage you have and how far you can go will largely depend on the size of your business and what kind of revenue you will bring the affiliate networks. Make the networks excited about your marketing and growth plans. Explain your past performance and what your plans are for the next year – if they see you as an expanding and growing brand then they will stretch further to meet your needs.

By the time you have got to this stage you will have your preferences, go with the data, the best deal and your gut feel. If you like and get on with the people on a genuine level and trust that they will take your business seriously and will spend time promoting you then go with them, but only if the commercials and their business proposition stack up too. Getting visibility with the key affiliates for your market Once you have your account set up and you are ready to go the first thing to do is to put together a target list of affiliates that you want promoting you. Rank the affiliates on the list by potential and then work with the networks on getting the best real estate possible on the affiliates sites.

Get the affiliate network to give you a list of every affiliate who has driven a sale for any competitor of yours (that is in their network) within the past 6 months. Ask the affiliate network to rank the affiliates in order of revenue driven (obviously without the sensitive data) if they mess up and give you the sensitive data (unlikely) then all the better. Put together a promotional plan for the first 3 months and make sure that your offers blow the competition out of the water. Affiliates are businesses in their own right so are just interested in promoting the merchant who can earn them the most cash, so if you give them a better % commission and your conversion rate is as good as your competitors or better then you will quickly win them over. Check out the top affiliates EPC (earnings per click). You then need to work out how you can give them the opportunity to earn over this with you – basically calculate: (site conversion rate x (commission rate per sale X Average order size).

Ensure that the affiliate network have agreed to give you featured merchant status for the first month and that you are featured all over their website/blog/twitter/facebook etc and emails.

Email all of the other affiliates straight away introducing yourself as their support at your company, explain your proposition, affiliate program terms (commission rate etc) and explain that you have an unbeatable offer for the first month that is going to have sky high conversion rates.

Save some fat in the promotional spend plan for the top affiliates so that you can offer them something special for a great location on their site.

Once you have the top 10 on board and are recruiting the long tail through the email then get on the phone and work your way down the list getting more and more affiliates on board, there will be many that you cannot get hold of and/or who do not reply; do not be disheartened as this is normal, affiliates are busy people. Just try to think of good ways to grab their attention and leverage all contacts at the network to aid you in getting in contact with the affiliates.

Keep in close contact with the network – let them know that you will make them work for their commission, be thankful and complimentary when they are good but beware of them being more lazy after the initial flurry – you need to hold the pace for at least the first 3 months and then it should start to get easier as you have some secure relationships that do not need too much maintenance. This applies to both affiliates and the networks.

New affiliate promotions to get the affiliates promoting you instead of your competitors This is obviously a tricky one with no clear right/wrong way. There are a few rules that I would stick to though:

Keep things fairly simple – as mentioned above affiliates are busy so if you come up with a highly complex (however fun) promotional idea they may just switch off before you sell it in to them.
Keep things fresh – do not just dole out the same old promos every month to the affiliates, there will be no real incentive for them to keep promoting you and trying new things for you if they already know how it will perform on their site.

If possible base your promotions for the top affiliates around their site and what works well for them e.g. if you sell T-shirts and cushions and one site is flying on the cushions then give them special offers around cushions.

Use the data you have after each promo – see what works for who and try to understand their site use profile so that you can meet their needs.
Show your face at affiliate events, make friends in the industry, do people favours and just generally enjoy yourself as if people see you being fun and positive socially then it will impact the business relationship you have with them.

If anyone has anything that they think could be added to this post then just let me know and I will add it in. All the best with your affiliate marketing!

Why Affiliate Marketing Is the Best Way to Start an Online Business

If you’ve educated yourself enough with the information available to us via the internet, then you should have realized by now that your pursuit of a career in the corporate ladder is futile at best. Basically, the idea is to start as an intern, then a regular employee, then move up to a supervisory and/or managerial position and finally up to the executive levels of the corporate business that you’re in. Personally, I have nothing against this kind of aspiration as I too once dreamt of such things myself; however, the toll it takes to get to EXACTLY where you want to be could at least take 30 years; 20 if you’re exceptionally good at it.

The problem is we all can’t be exceptional and aside from the fierce competition in play, you’ll also have to face the insurmountable amount of bureaucracy, racism, favoritism, gender inequalities and other negative things in order to literally move up the ladder. The trade-off is not an ideal payoff even from an optimistically assessed standpoint. Therefore I would advocate that you start your own business and the cheapest way to do it is by building an affiliate marketing blog or website.

Defining Affiliate Marketing

Affiliate marketing is an easy income-generating business method where you take the role of the promoter and help the manufacturers and sellers connect with the end consumers. It should be clear that whether you take a passive or active role in this business, you are by no means the originator or creator of the products/services you promote. But you will get a small portion of the sales as compensation nevertheless. It’s basically a 3-way relationship between you, the seller and the customer.

What Affiliate Marketing is NOT

If you get an unsolicited email inviting you to join an affiliate network and it’s asking for an upfront payment, then you definitely have to scrutinize them and find out whether or not they’re scam or legit. Go to the Better Business Bureau (BBB) and find out about the company, if you can’t find any, then go to affiliate marketing forums and discussion boards. They would know a lot about these scam sites as news spreads fast in social media and forums. Another thing to look for is if these people are selling you unrelated products or something that you will never be able to use, like the $350 “Secrets to Affiliate Marketing Success” book or some other catchy titles; although a few are genuine but they don’t charge you that high.

The truth is you can learn basic affiliate marketing from top ranking websites and blogs. In fact, they can teach you more useful information than all those specialized books and DVDs that other people are selling. Becoming an affiliate is free when you sign up to affiliate marketing programs and the only thing that will really cost you money is web hosting, which is around $70 – $100 a year for your affiliate marketing blog. A few other expenses may include a unique website/blog logo (optional), your electric bill; hire a blog writer (optional because you can write the blogs yourself) and probably paid advertising to promote your website or blog (optional).

Types of Affiliate Marketing

What’s interesting about affiliate marketing is that you can earn commissions in more ways than most people think. Allow me to explain the 3 different types of affiliate marketing and how you can earn through them.

1. Unattached Affiliate Marketing – This type of affiliate marketing will not require too much work from you, you don’t even have to setup an affiliate marketing blog like those for Amazon Affiliate Programs. This is more like a PPC marketing (pay-per-click) where you just show affiliate ads on sites that allow this kind of marketing and then get a commission for each click through that web users make on the ads.

2. Related Affiliate Marketing – This type of marketing is where you are required to have some level of involvement and this is where you create an affiliate marketing blog or website and always show affiliate links on almost all of your website/blog pages. You also earn a commission for each time a web user clicks through the affiliate links.

3. Involved Affiliate Marketing – This kind of marketing may require you to actually use the products/services before you write a review about them and you should be able to write a more comprehensive and honest reviews.

You can choose from these 3 types of affiliate marketing methods, but most affiliate marketing programs uses the Type 2 affiliate marketing, which has some level of involvement and online presence from your end.

Putting the Cogs and Wheels Together

Now that you have an idea of what affiliate marketing is all about and what its common pitfalls are, you are ready to start your journey to financial freedom and a wealthy lifestyle! Affiliate marketing is just like any other type of business and you’ll have to plan a strategy months or even years ahead before you begin, so I will give you the basic strategy of how to become an affiliate marketer, signing up for affiliate programs, setting up your affiliate marketing blog and all the other important details about it.

Steps to become an affiliate marketer:

1. Decide what niche topic you want to use for your blog or website. It’s better to write reviews or general information about products/services that you’re passionate about, because you will write better articles for them compared to those that you don’t like. For instance, if you’re mad about crochet or kids bicycles, then that is the niche you should pick for your blog! Affiliate programs have a huge inventory of items for sale and they do include crochets and bicycles for a fact. If you’re more of the business-minded individual and you think you can write just about on anything, then by all means pick the niche that’s most profitable among the lot.

2. Create your website and purchase a cheap but reliable web hosting. You don’t need a web designer to build a website or a blog. You can use WordPress, Weebly, Web.com, Blogger, eHost and others to do that. Using their user-friendly “click & drag” features you can create your blog/website in 5 – 10 minutes!

3. Learn basic SEO and use it on your blog or website. Search engine optimization or SEO is a very good marketing strategy to allow your website to be known throughout the entire internet or at least the majority of it. If your website is easier to find in search engines, then it is more convenient for people to visit it, and more visitors means more money for you.

4. Learn social media marketing to extend your presence online. In reality social media marketing or SMM is also a part of the grand scheme of SEO and without it, your SEO campaign would not be as successful as you’d expect it to be. There are literally billions of people hanging around the web on a daily basis and much of them are in social media sites. It would be a logical choice to get visitors there for your website and increase your income potential.

5. Learn about paid advertising and consider it deeply on whether you need to use it or not. Paid ads help because they target the right kind of people who are already looking for products that you promote. Meaning there is a good chance that they will buy. Wouldn’t you want them to buy products through your affiliate links? I would!

6. Start filling up your website with content. In case you plan to write boring and unimpressive blogs and articles, then I’d advise you to no longer continue in your pursuit of creating an affiliate marketing blog, because I promise you people will not want to read your blogs or visit your site. Write articles that will impress you first. This will let you know whether or not people will want to read about what you have to say. If you can find an extremely critical person to judge your writing, then that would be better as it will help you greatly improve on your writing style. Reader engagement is absolute in affiliate marketing. It will determine your income capacity, so do your best in writing content for your site above all else.

How you earn in affiliate marketing:

• The manufacturer/seller signs a partnership deal with the affiliate network or program and in turn, when you sign up with the affiliate network as an affiliate, the partner affiliate network will give you a small percentage share on every item you helped sold.

• You’ll need to embed or display affiliate links on your website or affiliate marketing blog about the products you’re promoting. The purpose of these links is to guide your blog readers to the seller’s webpage (which is usually in the affiliate network’s site) so that they can make purchases of the items they like.

• The percentage commission on each sale range from 1% – 10% (some give more than 10% but rarely) and this is how you generate income. For example, a web user happens by your blog about coffee machines and he/she read your blog review or informative article. The reader was impressed by your blog and decided to click on the affiliate link, then make a purchase of 1 coffee machine worth $350. If the affiliate network allowed 7% of that amount to be your commission, therefore your income for that sale alone will be $24.50.

• You may notice that $24.50 is a small amount and not enough to convince you to become an affiliate; however, if you were able to bring 10,000 visitors to your blog in the span of 30 days and about 4,382 people bought coffee machines for themselves, then your income for that particular month should be $107,359! If you’re able to bring as much visitors to your website on a regular basis, then you can bet that your monthly income should be around these numbers. Now you can appreciate the value that SEO and SMM can do for your affiliate marketing business.

How Much can you Make?

The straight answer to this question is… there is NO LIMIT to how much you can earn. The website called Pickmyshaver.com around October or November 2013 and then 8 months later its regular monthly income became $8,446! If it had continued as is it would earn over $50,000 a month by now, except that it was purchased in Flippa by an anonymous buyer for $60,100 around June 2014. That’s just 1 website and I’m pretty sure on your best day you can manage 2 – 3 sites for affiliate marketing.

At this point I will let you use your imagination as to how much you can earn; or is it how hard you desire to earn. It’s entirely up to you. I am confident that this article should help you get started in creating your own affiliate marketing blog and earn not just money, but your freedom from the everyday worries of life. Once you start earning over $8,000 a month, then you can buy more time to spend it with the people that matters to you most – your family. I wish you all the best and don’t forget to drop a comment below and tell me how affiliate marketing has changed your life like it has changed mine.

Affiliate Marketing Secrets, Strategies, and More!

Step-by-step Guide of Affiliate Marketing Strategy

Making money from affiliate marketing is an art. Only writing a great product review or promoting a great product will not work to make any sales from your affiliate links. But you have to do many other things to make money from your affiliate links.

Most of the Blog and website owners think that writing a great product review will work. But this is not enough. You need a perfect Affiliate Marketing Strategy and MUST work on it to generate sales from your links.

Here is a Affiliate Marketing Strategy Model. You can simply print out this page or save it on your desktop.

Step 1: Take Time (10-20 hours or even more) to chose a product to promote and write down a great, unique, and informative product review. This is very important.

Step 2: Become an Affiliate of ClickBank, Amazon, or Commission Junction and generate an affiliate link for your product and put it on your review page and publish it on your website or a blog. Now, suppose if you are not the owner of any website or a blog then it’s also perfectly alright. You can post your review on Squidoo, HubPages, WetPaints, and other sites of that nature.

Remember, all we need to do is publish your web page containing your affiliate link anywhere on the web and divert the web traffic towards it.

Step 3: Link Building: This is very important. Your Affiliate link is live now. The only thing you have to do is drive web traffic towards it (the more the better). For this, you have to create and publish the content on other popular websites on the Internet and then put a link of your affiliate page.

Examples are EzineArticles, Squidoo, HubPages, WetPaint, YouTube, Xomba, eHow, WikiHow, Triond, Associated Content, Knol… etc…

Post content having your affiliate link page link on each of the above websites.

Step 4: Social Media: Try Facebook, Orkut, Twitter, Digg, Delicious, StumbleUpon & Reditt to divert more web traffic towards your affiliate links.

Step 5: Now sit back and wait for the web traffic to accelerate. This will probably take 1 week to 15 days to drive web traffic towards your affiliate page. Once the web traffic comes toward your page, you will definitely make money.

This is the Model of Affiliate Marketing Strategy. Nobody will teach you this.

Affiliate Marketing Secrets

Secrets of Successful & Profitable Affiliate Marketing

In fact, after reading this article, you will understand that there is no secret at all. But everything about affiliate marketing revolves around the one basic principle and that is:

“To make money from affiliate marketing, you have to drive more web traffic towards your affiliate links.”

The more web traffic you divert towards your affiliate links, the more sales it will generate and the more money you will make. It is this simple. And I believe you should not spend money on those products which claim that they are offering you some kind of secret.

Once you generate an affiliate link on your website or a blog, all you have to do is divert more and more web traffic towards those affiliate links by Twitter, Facebook, Digg, Delicious, StumbleUpon, Reddit, Articles Directories, SEO and many other things.

The more web traffic that you divert towards your affiliate links, the more sales it will generate. There is nothing secret about it. Even a School going Kid can do this to make 6 figure Income every year by following this basic principle.

What is important, is the proper mindset. You have to understand the principle and develop a mind frame and stick to it and prevent this mind frame by eroding from your emotions. That’s it. This is all you have to do to make money from affiliate marketing.

You don’t have to be a popular product review writer for this. Nor do you need to be the owner of an Authority Blog or a Website. Of course, if you are an owner of a successful blog or a website, it will be easy for you to make money from affiliate marketing because you can leverage your existing reader/customer base.

Thus, these are the secrets of successful affiliate marketing.

Now, Take Action and start making money.

Affiliate Marketing eBooks

Should I Buy Affiliate Marketing eBooks?

You are here on this page probably because you have searched in Google for “Affiliate Marketing eBooks”. I am sure that you have already gone through several websites and reviewed lots of books on affiliate marketing. But after watching literally hundreds of dollars of prices of those eBooks, you probably landed on this page.

Don’t Worry… After reading this Article, You won’t need to buy any Affiliate Marketing eBooks from the Internet. And Yes, I am giving this Information to you for FREE!

Let me tell you that all of those eBooks are revolving around the one basic core principle. And this Principle of making money from Affiliate marketing will never even change in the near future. And that Principle is:

“The Key of Successful Affiliate Marketing is Web traffic. The more web traffic you divert towards your Affiliate Links from all around the web, Naturally more Sales it will generate and the more money you will make.”

Everything about Affiliate marketing ultimately revolves around this simple but very basic principle. You will find literally millions of eBooks on this topic. All of those eBooks are written around this basic principle. So if you understand this basic principle, there is No Need to buy any eBooks.

I have given you the principle of profitable aff. marketing right? So Now, you have to use your mind and figure out “How to Divert more web traffic towards your Affiliate Links?” Lets discuss the example provided below:

Suppose I want to make money from Affiliate marketing so What Will I Do? Well, First of all I go to ClickBank.com and chose a product to sell. Well, I advise you to start from Digital Downloadable products first, this is because they are easy to deliver and the commission per sale is very high (20-75%) in these products.

OK so now I have chosen the product. So the next step is to create an Affiliate Link. So What will I do? Well, I will write a keyword rich Product review having affiliate link and post it on my blog or a website. Or any other social network that we have discussed earlier.

After that process, the affiliate link is on the web. It’s live now. So your 50% of the job is complete. The rest of the 50% is to divert the web traffic towards your blog/social network/website page on which you have put the affiliate link.

You can do this several ways.

One is Link Building. There are 2 advantages of link building. One is that they will divert more traffic towards your web page as well as it will increase the search engine rankings of your web page so drive organic (Search engine) traffic.

For this you have to write down and post articles on various 5,6, & 7 Page rank articles directories such as:

– EzineArticles
– Squidoo
– HubPages
– WetPaint
– YouTube
– Xomba
– Triond
– Knol
– eHow

You post articles on the above web directories. This is because Google simply loves and trusts these websites. So if each of these websites direct towards your web page having affiliate links, it will shoot up the page rank and thus more web traffic.

Now, the second way to drive more traffic towards your websites is Social Networking & the third way is Social Media. Here are the examples:

– Facebook
– Orkut
– MySpace
– Digg
– Delicious
– Stumbleupon
– Reddit

In short, you have to use your mind to find out more and more possible ways to divert the web traffic towards your affiliate links. Once you do all of this hard work. Just sit back and enjoy the steady passive income coming into your bank accounts.

Facebook Affiliate Marketing

How to Make Passive Income from Facebook Affiliate Marketing?

Affiliate marketing means selling other people’s products from your web properties (Blogs & Websites) and getting commission for each sale you make. Many people have asked me: “How they can make money from Facebook Affiliate Marketing?”

Well, As far as I know, there is not any direct method of doing affiliate marketing on Facebook. But let’s go to the basics and find out how we use Facebook to do affiliate marketing?

What is the Basic Principle behind Successful Affiliate Marketing?

Well, the basic principle of profitable affiliate marketing is – “The more web traffic you divert towards your Affiliate Links (Web pages having your affiliate links), the more Sales your affiliate links will generate.”

This is the basic principle of Affiliate marketing and every theory and techniques of profitable affiliate marketing revolves around this simple basic principle.

Now, here we want to make money from Facebook affiliate marketing. So obviously, we need to find out the ways to divert traffic from Facebook to our affiliate links. Is this Possible? Well, Yes. There are several ways by which you can divert the web traffic on Facebook to your affiliate links.

Say for Example, Fan pages, Comments, News Feeds, Facebook applications, Direct Advertising on Facebook… etc…

By these methods, you can easily divert web traffic from Facebook to your own web property having affiliate links. The more web traffic that you divert to your affiliate links, the more sales it will generate and thus the more money you will make.

However, There is only one problem with Social Networking sites traffic and that is the traffic of social networking sites is not a buyer’s traffic. They are there on the Social Network for being Social. So making money from Social Network traffic is really a difficult task.

And for Affiliate Links to work, you need the Buyer’s Traffic.