AFFILIATE MARKETING

What Is Affiliate Marketing Anyway?

As you probably know, a "business model" is simply a blueprint for a business. It describes how the money is made, how the profits are generated, and the plans for growing the value of the business over time.

Affiliate marketing is an established business model in the online retail world. It has been around for more than 14 years. There are thousands – perhaps hundreds of thousands – of affiliate marketers worldwide, with more people trying affiliate marketing every day. Affiliate marketing can be a highly lucrative way of making money on the Internet. It is based on a very old business model – referral marketing. In other words, paying someone only when they
produce results.
In affiliate marketing, online retailers, called merchants, allow outsiders who
are not employees, called affiliates – people like you and me – to advertise
the merchants' goods on our websites. In return, the merchants pay us a
commission when our visitors make a purchase through our websites. When visitors click on the affiliates link and buy a product, the affiliate earns a commission.

What Is an "Affiliate Program"?
You’ll hear the term "affiliate program" used a great deal. When you join a merchant’s “affiliate program,” it means you are signing up to promote the merchant's products or services online. An "Affiliate Program" is the administrative setup that manages the relationship between a merchant (like Amazon.com) and the people (like you and me) who make online sales for the merchant.

Joining an affiliate program is relatively easy. It usually involves filling out a form and agreeing to abide by the "affiliate agreement." This agreement spells out the legal arrangement that governs how and when
the merchant pays you, what constitutes a valid sale, what you can and can't do when selling the product, and much more.

"Affiliate marketing program" is the most common term used to describe this arrangement between merchants and affiliate marketers. But there are other terms used to describe the same arrangement. Some of the other terms you might find are:
· Associate Program
· Referral Program
· Partner Program
· Bounty Program
· Revenue-Sharing Program
All these words can be used interchangeably with the term "Affiliate Program."

Who Are "Affiliates"?
People who make money by promoting for merchants as described above are called “affiliates.” If you choose to try this method of making money online promoting products for an affiliate merchant - you can call yourself an "affiliate marketer." Some other terms for "affiliate" that you may see used are:
· Publishers
· Associates
· Program Partners



What It's Like to Be an Affiliate ;Your Role as an Affiliate
As mentioned in the previously as an affiliate marketer, you're notan employee of the merchant. Instead, you're an independent businessperson who invests your time and resources into promoting the products and services owned by the merchant. In exchange, you're paid a percentage of the sales price.
However, even though affiliates are not employees, they are, in a very real sense, members of a merchant's sales force. You are very much like an independent salesperson — free to sell as much as you wish, but bound by the merchant's terms, conditions, and payment schedule.
Lots of Freedom, Within Limits For example, as an affiliate you act independently because you:
· Own and operate your own website, which operates completely
independent of the merchant's website
· Can choose the products you wish to sell and the merchants you will
represent
· Can choose the topics about which you will build websites
· Can choose to stop selling for one merchant and switch to another at
any time
· Can make your own hours and work from home
However, even though you are an independent salesperson, there are some limitations:
· You’ll spend money and time up front to start your affiliate business —
the merchant won't foot the bill.
· You must abide by the merchant's rules for appropriate sales behavior.
· Some merchants require affiliates to apply for their program. While it's
free to join, every merchant may not always accept you.
· Some merchants may also restrict you from doing certain types of
marketing, such as email marketing.
In the end, most affiliates agree — the enormous freedom and independence of affiliate marketing more than justifies the limitations. And, even though you're an independent businessperson, you're also a member of a marketing team.

The Affiliate Marketing
Team — Part 1
As an affiliate, you're an independent businessperson, with your own hours,your own websites, and your own responsibilities. But just like any
other business, you are also part of a larger "team."

The Team
Let's take a look at the components of the affiliate marketing team and how it contributes to your success.

The Affiliate Marketer
That's you, of course. As an affiliate, you actually perform many of the functions that a salesperson does, such as:
· You connect potential buyers with the product.
· You describe its many benefits to them on your website.
· You might even anticipate questions or objections that potential customers might have, and answer them on your website.
· You offer firsthand knowledge of the product, if you have had the opportunity to purchase it, adding credibility to it. There are some other things that you will do that is not like the typical salesperson, such as:
· You'll absorb what are called "customer acquisition costs" for the merchant. That means you'll spend some of your own time and money building a website, getting people to visit that website, and inspiring them to click on your affiliate links.






· You'll help the merchant acquire customers it might never otherwise reach.
In return, the merchant pays you a commission on any sales made through your web links and marketing efforts.

The Product
The world is full of products, but there are two types you must distinguish between right from the start — good products and weak products. To give yourself the best chance for success, you'llneed to avoid weak products. This is because, even though the merchant has to support the customers, you have absorbed the customer acquisition costs. When you promote a product that turns out to be defective or fails to live up to the merchant's promises, returns and chargebacks are inevitable.
Remember: Merchants don't pay commissions on returns or chargebacks.
Therefore, the expenses you incur to get the customer to the merchant will not be recovered.It just makes good business sense to cast a critical eye on any product you consider promoting, and do some online research about it, such as searching online for customer reviews. This is also another reason why owning the product is an advantage - you have firsthand experience with it.

The Merchant
The merchant might be an individual or a multinational corporation, but the merchant is always the owner and/or licenser of the product or service. Like products, there are "good" merchants and "weak" merchants. And yes, there are even some disreputable merchants you'll want to avoid.
As an affiliate, you should always look for good merchants. Some general characteristicsof good merchants include:
· They always supply their affiliates with plenty of support, such as
good advertising materials.
· Their sales sites are easy for your customers to navigate.
· The order process has no glitches.
· Their websites have shopping carts that work flawlessly.
· They have a well-staffed customer service department.
In other words, good merchants do their best to take the visitors that you send to them and turn them into buyers.

The Affiliate Program Manager
Many merchants hire a dedicated affiliate manager; someone whose job it is to make sure that affiliate sales are properly tracked, that all affiliates abide by the program's guidelines, and that affiliates are supported and paid promptly. In small businesses, one person may be a solo "merchant-manager." And in some very large
companies, the affiliate program may be staffed with a manager plus additional staff. Many small to medium-sized companies will sometimes contract their affiliate program management to a firm that provides OPMs (Outsourced Program Managers).
While an OPM may manage several programs for several merchants, this often provides them with a wider perspective, making them good to work with when you need
a question answered or additional support.

As an affiliate, you should give special consideration to any merchant that
has hired a dedicated affiliate manager. This shows the merchant cares
enough about the program to put financial support behind it, and affiliate
managers can be more assured this is a good merchant.