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So, just what is an affiliate program? An affiliate is someone who partners with another online merchant to help drive targeted business to that merchant's web site in order to increase sales. An affiliate program is an inexpensive marketing strategy used by an online merchant in which a monetary incentive is offered to webmasters (affiliates) to drive traffic to that merchant's web site. The monetary incentive is usually in the form of a percentage-based commission or a fixed dollar amount. Affiliate programs are sometimes referred to as associate programs or referral programs. Affiliates are also referred to as publishers in many cases.
Sponsoring an affiliate program makes sense for an online merchant because it helps to
Increase online exposure
Increase traffic leading to greater sales Generate more targeted leads
For an Internet entrepreneur there are many more reasons it makes sense to start an Internet affiliate business. Here are just some of them:
Low cost set-up Affiliate programs are free to join
24x7 passive income
No employees
No inventory
No order processing
No product shipping
No merchant account needed
Minimal risk
Large income potential
There are three general types of affiliate programs:
Pay-Per-Sale (PPS) - in which an affiliate earns a commission or fixed dollar amount based on each sale made through links from the affiliate's site.
Pay-Per-Lead (PPL) - in which an affiliate earns a fixed amount every time a customer directed from their web site fills out a survey, requests information, joins a program, etc.
Pay-Per-Click (PPC) - in which an affiliate earns a fixed amount every time a potential customer clicks on a link from the affiliate's site to the merchant's site.
Once you are affiliated with a merchant, you may place their ad(s) on your web site. When a customer clicks on one of these ads and is taken to the merchant's online store, if they then make a purchase, fill out a survey, etc., you get a commission for that sale or referral based
on the merchant's payout structure.
The 'million dollar' question that I had when I first started, and that you may be wondering about right now, is "How does the merchant know that the sale/referral came from my site?"
When you join an affiliate program, you are assigned a tracking number or code, usually referred to as an affiliate ID. This ID is unique only to you. When you create a link from an ad on your web site, you simply include this ID in the link.
Once a customer clicks on your link, a tracking cookie with your affiliate ID is placed on the customer's computer. If that customer then makes a purchase, the tracking cookie will identify them to the merchant as being referred from your web site. Depending on the affiliate program, the tracking cookie may be valid for just that one visit, up to a lifetime for that customer.
Most merchants realize that a customer may not make a purchase during the same visit in which they were directed from an affiliate site. As an incentive to the affiliate, if a customer returns directly to the merchant site within the time specified by the cookie duration and makes a purchase, the affliate will still get credit for the sale.
While a normal link to a page that is selling product 'abc' at merchant 'XYZ' may look like:
xyz.com/products/abc.html
Your affiliate link may look something like:
xyz.com/product.asp?PID=1234567&AID=9876
where your affiliate ID is '9876' and the product ID or SKU for item abc is '1234567'.
This example is a hypothetical link to a specific product or product page. Most merchants also permit you to link to their home page, or any other page on their web site. Most of the ads you will place on your site are in the form of banners, text ads, images or text/image combinations. Many merchants also supply you with more advanced linking options such as data feeds, storefronts, virtual stores, search boxes, and the like.
If you're contemplating starting a home internet business, then promoting affiliate programs is the best way to test the waters. Affiliate marketing is a proven win-win-win scenario for online merchants, internet marketers, and consumers alike.
About the author:
Bob Davis is a professional database consultant, web designer, graphic artist, and Internet marketer. If you'd like some solid tips on starting your own legitimate Internet business, then visit his Home Internet Business Guide for Beginners.
You have permission to reprint this article, provided that the author bio, content, and links remain unaltered.
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