Affiliate Marketing What Is It And Why Use It?

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Affiliate 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 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.

In The News:

CNET News
Mozilla revenue $75 million in 2007, up 12 percent
Ars Technica, MA - Nov 19, 2008
Other sources of revenue include the revamped Mozilla store, affiliate programs, and interest on investments. The nature of Mozilla's agreement with Google ...
Mozilla Set To Rake in $84 million In Revenues In 2008; Non Profit ... ITProPortal
State of Mozilla Corp. OSDir
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Grubb & Ellis Files Investor Presentation
MarketWatch - 4 hours ago
With more than 130 owned and affiliate offices worldwide, Grubb & Ellis offers property owners, corporate occupants and investors comprehensive integrated ...

Out of the Starting Gate : tyBit's First Payout to Affiliate Partners
Emailwire - Nov 19, 2008
Lastly, tyBit delivers fast, relevant search results to its users and pays its affiliate partners the most robust revenue share in the industry. ...
tyBit Issues First Payout to Affiliates Web Host Industry Review
all 3 news articles

Helmerich & Payne, Inc. Announces Record Fourth Quarter and Fiscal ...
MarketWatch - Nov 20, 2008
Company President and CEO, Hans Helmerich commented, "With 58% of our US land potential revenue days in fiscal 2009 already under long-term contracts with ...

Outdoor Channel Holdings, Inc. Q3 2008 Earnings Call Transcript
Seeking Alpha, NY - 51 minutes ago
I believe we are nearing a point where we will begin to see a drop level with regards to affiliate fee decreases. At any rate, we are taking a cautious view ...

Port Authority OKs bonds for Queen City Square
Bizjournals.com, NC - 2 hours ago
The Port Authority will own the project and lease it to an affiliate of Western Southern with the option to buy. The city and Western Southern are working ...
Financing approved for city's tallest building Cincinnati.com
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Hurray! Q3 2008 Earnings Call Transcript
Seeking Alpha, NY - 12 hours ago
We also tested or invested in music [actually affiliate] for impairment and recorded a write-down of $1.9 million in the third quarter of fiscal year 2008. ...
Hurray! Q3 Loss Narrows; Guides Q4 - Update RTT News
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New Relic Launches Affiliate Program
PR Web (press release), WA - Nov 20, 2008
Rails organizations can generate revenue for recommending popular RPM™ application management tools; nine organizations sign up as charter members. ...

Host Department Launches a New Affiliate Program
MyHostNews.com (press release), OK - Nov 19, 2008
Moreover, to join the affiliate program, affiliates just need a website and a PayPal account to rake this instant revenue.

Ottawa Citizen
The Walt Disney Company Reports Earnings for Fiscal Year 2008
MarketWatch - Nov 6, 2008
The increase in affiliate revenue was due to contractual rate increases and subscriber growth. Increased advertising revenues reflected improved rates and ...
Walt Disney F4Q08 (Qtr End 9/27/08) Earnings Call Transcript Seeking Alpha
Disney's 4Q net income falls 13 percent The Associated Press
Earnings Reports Reveal Economic Pain For Media Giants CNNMoney.com
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Affiliate Marketing What Is It And Why Use It?

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