Benefits

As outlined before, an affiliate program provides the same benefits that an outside sales force would offer any bricks and mortar company. You have a full-fledged sales force selling your products for you while you can lay on the beach and read a book. And with affiliate websites, you don’t even have to pay them unless they make a sale.

But most importantly, what comes to mind is “How are you going to convince people that your program is going to make them make money?” This comes first and foremost with a good company infrastructure. Have the tools for your affiliate program created correctly the first time. In fact, big affiliates (the ones that make thousands a month) are very finicky with who and what they sell, and if they, for example, are not paid out on time, they will leave your e-business and cost you thousands in lost sales. So once an affiliate system in put in place, maintenance is key.

Another thing that is key is the fact that you are giving people an opportunity to start a home-based business with relatively small to none start up costs. A potential affiliate may already have a site and decide to put up your banner, or may even create or purchase a small site just to sell your products. They don’t ever have to leave their house, they just have to maintain their site, which may just cost them the domain name annual fee (usually $15 a year) and hosting (ranging from $1 to $20 a month). Once joining the programs, they may be sent recommendations on how to convert sales better, change the designs of their websites to be more buyer friendly or help optimize their key words on their site for the search engines. It is a simple as that. Those simple facts plastered on your main website will bring interested parties in. Unsolicited email regarding your affiliate program is NOT recommended as people most often mistake them for “get rich quick” schemes or fraud. But one avenue that is recommended is for paying for the term of “affiliate program” to a search engine company and seeing who joins up. It has proven to be highly effective for some companies.

Which brings us to the three major ways marketing is priced out. It is important to know these methods as your e-business progresses and you want to pursue other marketing options:

CPM (cost per thousand) - The traditional way marketing prices were evaluated and sold to businesses. A market reach was evaluated (usually in the thousands) and them sold to the businesses at prices accordingly. As you can imagine, TV usually reached the most consumers and hence demanded the highest prices. For internet purposes, CPM can be modified to sites that receive the most traffic, like MSN.com. As you can well imagine, they demand the highest prices for marketing because they reach the most consumers. Simple and productive but expensive.

CPC (cost per click) - In web terms, you only pay for what is clicked on. As discussed with search engines companies, they sell key words click throughs. So as your site is brought up in a search engine and subsequently clicked on, you pay a certain rate for the click through. This often helps you rank higher in the search engines and subsequently sell more of what you want to sell.

CPA (cost per acquisition or cost per action) - This is basically what describes affiliate marketing. Your business only pays for when a sale is made. It is as easy as that. An affiliate site is created by creating a link from the affiliate site to the home site. This is then tracked by a special linking code created by the home site. This linking code is what specifies that a certain product was purchased through an affiliate and hence an account is created for the commission amount. Then, usually monthly, a payout is made to the affiliate.