What do the 2 largest shopping sites on the Internet have in common? They both use affiliates to build their sales and increase their visibility and traffic.
It’s true, Amazon has done it for much longer, in fact it is probably the sole reason they are what they are today. From the start they incorporated affiliates into their business plan, and have done so with great success.
For those reading this and scratching your head wondering just what is an affiliate, there is an easy explanation. They are commissioned sales agents. In the world of the Internet, an affiliate is paid a commission for doing one of three things: simply clicking a link to visit a site; visiting a site and performing a specific action, such as completing a loan or insurance application or making a purchase.
By far most affiliate programs pay for sales. From just one or two percent of the sale up to 90 and even 100% of the sale. In the case of Amazon, it’s generally 5% of the sale of a specific item. Why would someone pay 100% of the sale as a commission, you may wonder. Simple, to get a new customer.
There are “internet marketers”, the guru guys, who will give you the entire sale amount, even paying the PayPal fees, for bringing in a new sucker. They figure once they have the name and email address they will more than make that first commission back.
So, how can you make this work for you? What can you do to convince others to promote your site for a percentage of the sales? Just how does it work and how do you go about recruiting?
Let’s start with how it works. There are any number of affiliate sales tracking programs around. And many of the leading shopping cart packages come able to integrate an affiliate program into the cart. Some even have their own built in affiliate program.
If they do not have a built-in program, many carts will export the information to a stand-alone affiliate program. These are often a web based application you can buy and manage on your own. Or, there are affiliate system providers who will manage the entire program for you, from tracking the clicks and sales to issuing the commission checks.
As an example, CubeCart offers interfaces for these affiliate management packages: iDevAffiliate, Affiliate Manager, Trade Doubler and ClixGalore. You can Google each for more on them and for an overall look at how they function.
By far the leading online affiliate marketing site is Commission Junction. There you will find many brand name retailers, as well as some lesser known companies which offer affiliate programs.
If you were to offer an affiliate program, you must be prepared to be prepared. As the seller, it is up to you to furnish your affiliates with banners and possibly email messages and suggested forum posts. And you must be prepared to be the head cheerleader of the group.
Just signing them up and leaving them to their own resources will do little or nothing to improve your bottom line. You must have a program, you must offer attractive commissions and you must stay in communication with your affiliates. Frankly, many wholesalers may have a hard time finding a percentage they can afford that will attract affiliates.
Retailers, though, should have no problem with a 5% or so commission. You may find a few lower, but that is what it will probably take for a small online retailer to attract any affiliates. Of course, you need to do the math and see what you can afford.
Keep in mind this will not be what you can afford with your current level of sales. The whole purpose is to increase sales and you will have your program set up so there are no commissions paid on sales to existing customers. You are interested in new customers and that is the only thing you pay for.
You can customize your plan in a number of ways. Pay on first sale only. Pay on first and all continuing sales. Pay for all sales within the first year. Pay the first affiliate, even if another affiliate later send the same customer back. Etc.
You can also set the “window” for returning prospects. If an affiliate sends a looker, who bookmarks your site and later comes back to buy, you can set a time limit for that return to still count as a sale for the affiliate. 90 days, a year, you name it.
Virtually anything is possible with an affiliate program, and they can bring new traffic and sales to your website. But they are not “set it and forget it”, they take time to manage, just like a real live commissioned salesperson does.