Marketing - What Is It And Why Use It?
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
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
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.
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