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How To Identify a Profitable Affiliate Program

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You see them everywhere… affiliate programs. They’re a dime a dozen now days. With so many companies launching affiliate programs, how can you tell which ones might actually help you make money?

1. How long has the affiliate program been around? A new affiliate program is not necessarily a bad thing, but unfortunately they may still be working out some kinks. And they might not have much in the way of promotional material for you to use. An established affiliate program on the other hand, will usually have payment schedules, tracking statistics, and ad creative down to a science.

The longer a program has been around, the better the chances are that it is successful too. A program like ScamFreeZone’s Internet Success Associate Program, for instance, which was launched in August 1999, must be doing something right… otherwise they wouldn’t still be around more than three years later, right?

2. How much commission can you earn? Many affiliate programs pay very little — some as low as 2%! Others offer outrageously high commissions… up to 75% in some cases. Why such a huge difference? Usually, it’s related to the products or services being offered. Unfortunately, the commission structure can cause unbelievable headaches for affiliates, and can even cause a program to fail too though. Let me explain…

A company who sells products or services with a 30% profit margin, might decide to only offer 10% affiliate commissions. This, in their mind, is safe, because it allows the company to generate enough profit to continue operating. Another company however, might decide that paying affiliates more money will make them grow faster, so they’ll decide to offer a 25% commission… leaving themselves with only 5% profit. With very little potential for profit, a company is much more likely to fold, or at the very least close their affiliate program.

Now, most companies won’t share their profit margin details with you. There are things you can do though, that will help you get a better gauge of how stable they might be. Using The ScamFreeZone’s Internet Success Program example above, you’ll find that Neil Shearing, the owner of this program, actually shares with you his profit margin. But even if he didn’t, you can get a feel for him and his company by browsing his website. In doing this, you can tell that he doesn’t have one or more offices to maintain, no employees to pay, and no high-falutin’ executives or board of directors siphoning off profits. So, do a little research. Dig into the company’s website and see what you can find. And if you’re still not sure, try asking them! Just send a brief, polite email… you never know what they might be willing to share.

On the affiliate side of things, the commission structure can be a headache. If for instance, you join a program which pays just 2%, you’ll only make $2 for every $100 in sales. If you’re paid 10% commission, then you’ll get $10 for every $100 sold, and 50% will get you $50 for every $100 sold. Now, at first glance, it looks like you’d choose the highest commission offer, right? But you have to look at the products too. If you’re only able to sell $100 every six months, then you’re not making much money are you? If on the other hand, the smaller commission offer is much easier to sell… say for example you can sell $1000 worth of stuff every month… then you’ll make more money in the long run with the lower commission structure.

So, try to weigh the long-term value of a given commission structure, with both stability and profitability of the company, before choosing which program to join.

3. Would you use the products? This may seem like a strange question, but the answer can actually determine how successful you might be with any given affiliate program. You see, if you really like something, really believe in it, that is going to show every time you talk about it. You’ll find yourself writing articles or testimonials to use on your website… if you really like a product. You’ll find yourself referring to something you personally use, or found useful, just in casual conversations. And those casual conversations, or brief mentions on your website… they can turn into sales. Sales that you’ll make commissions from.

4. How many products do they offer? If a company offers just one or two products, but you really like, use, or recommend them, and the commission is good, and/or the sales volume is good, then great — there are no problems. Generally though, you’ll want to partner with a company that offers at least three or more quality products or services. Why? Because you can increase your income much easier if you have additional products to promote.

This concept is called “back-end sales”. You’ve probably heard of it before, right? In general, you work your tail off to convert a prospect to a customer. They become a customer as soon as they buy one item. After that, the hard part is done! Once a prospect becomes a customer, it is much easier to sell them additional, related things. So, if you have partnered with a company that offers a few quality items, you can contact previous buyers and offer them those additional items.

Following our examples above, The ScamFreeZone’s Internet Success Program offers several related, high-quality products. As an affiliate, once you have made a sale to one person, that person is much more likely to come back and get another ScamFreeZone product later… which means you earn commissions again — every time they buy.

5. How many ways can you make money? This may seem like a strange question at first, but the fact is: some affiliate programs offer just one way to make money, while others offer several. Direct sales is the primary way of course, with back-end products being an additional revenue stream. Additional sales of the same product, or recurring revenue on the product — i.e. the customer pays a monthly subscription fee — can make you additional money as well. In some cases, you’ll get paid for every month that the customer keeps their service active.

Another common way to make money with an affiliate program, is through 2nd-tier sales. 2nd-tier sales is simply another form of referral income. In other words, if you send a prospect to your affiliate site, and they sign up as an affiliate themselves instead of buying something, then you wouldn’t make any money from them. If however, the affiliate program is set up in a two-tier structure, that new affiliate would be listed as a sub-affiliate of you. And, any time that new affiliate made a sale, you would get a percentage. The 2nd-tier commission percentage is usually a small portion of direct sale commissions, but it can still add up nicely.

So, two-tier structured affiliate programs can be beneficial in a couple of ways. First, you’re not in a fierce competition with other affiliates. If you had a retail store, and your customer went to your direct competitor, you would not get any money from the purchase they made at that other store, right? As an affiliate though, in a two-tier program, if your customer signs themselves up, or buys from someone you signed up, then you still earn a reward. So, in effect, you’re working together instead of against each other. Each time you or one of your sub-affiliates makes a sale, you both earn money.

In The ScamFreeZone’s Internet Success Associate Program for instance, you can make 10% of every sale made by a sub-affiliate. Your sub-affiliates still earn a full 50% on their direct sales, so your commission does not come out of their pocket. Programs structured this way give you the potential to add several hundred dollars to your affiliate income each month, without essentially lifting a finger.

The second advantage to a two-tier system is that you can choose to be more managerial instead of direct sales. If you prefer not to sell products and services to customers directly, you can instead concentrate on recruiting sales people. Then you simply mentor, teach, and encourage them… they make the direct sales, and you both profit.

6. What kind of support, motivation, or training do they offer? Unfortunately, many modern-day affiliate programs are simply looking for people to put up their banners and links. They don’t have a systematic teaching or support system in place, and if you send email to them it can take days or weeks for a response… if you get a response at all.

A sign of a good affiliate program is one that’s devoted to helping the affiliates achieve. Usually this type of program will have a dedicated affiliate manager, and will keep in constant contact with you through newsletters or other similar means.

Now, a newsletter in and of itself can be slightly misleading. Many companies today — affiliate related or not — tend to send email that they *call* a newsletter, but in reality that email is more promotional than anything else. Have you gotten “newsletters” from companies which essentially looks and feels like a sales flyer? If you’re like me, you see that as borderline spam, and not overly useful… especially if you’re trying to make commissions from the company’s products or services.

A good affiliate program is going to have a useful and informative newsletter. It may only come out once a month, or it might arrive every week. Either way, it is usually chock full of help, information, tips, and tricks… all designed to help you increase your income through their program.

The ScamFreeZone’s Internet Success Associate Program is another good example in this case. They send a weekly newsletter to their affiliates, and in that newsletter you’ll find helpful articles focused on marketing. You’ll also find tips and short articles about how other affiliates have succeeded, and you’ll find ideas about how to best utilize the ad creative they provide for you. Sometimes, they even send out special new creative in the newsletter, before it is available anywhere else.

7. How often do they pay? This isn’t so much the mark of a good affiliate program as it is a convenience, but it is important to note. Some affiliate programs only pay once every three to six months. Some require you to earn a minimum amount of commissions before they’ll pay. In some cases this minimum is not unreasonable — $25 — but in some cases you have to earn $100 or more before you get paid.

There are also a few key affiliate programs which offer faster payment options such as direct to a PayPal account, or direct deposit to your regular bank account. So, knowing how they pay, as well as how often they pay, can be a deciding factor in whether you choose to partner with them.

And there you have it :) A nice, not-so-quick, but informative, list of things to look closely at when you’re selecting affiliate, associate, or partner programs. Now you can go out and make decisions about those companies with confidence, and start letting yourself really profit in the affiliate game! :)

For additional information on the examples given here, please visit The ScamFreeZone’s Internet Success Associate Program

Need some quality content for your publications? Check out The Guru
Gazette! http://www.GuruGazette.com
And you can find out more about Kathy at
http://www.ElectronicPerceptions.com

How To Identify a Profitable Affiliate Program
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