Affiliate program basics SEO

Making money by advertising affiliate programs can be an easy to setup, solid recurring source of income. Affiliate programs can also be a gigantic waste of time.

The basic affiliate setup

1. You sign up as an affiliate at a website, say MegaSalesNet UltraSitePro. You’ll get some sort of affiliate account code, usually tacked onto the end of a URL, which you use to link to MegaSalesNet from your website.

2. Visitors to MegaSalesNet from your website are tracked with the code, and when one of them makes a purchase you get some percentage of the sale.

3. Once you’ve accumulated enough money in sales, MegaSalesNet cuts you a check.

Sounds like a great deal right? Let’s take a closer look at some of the problems with affiliate programs, along with the “fairness” of the standard affiliate program.

The problems with most programs

MegaSalesNet is essentially hiring anybody who wants to try and peddle their product on commission. Very few affiliate programs screen affiliates at all, and of those who do most use a largely automated screening process. Companies do this because they’re after the sale, plain and simple. Any additional exposure only helps, so right out of the gate you’ll have a lot of competition.

Most affiliate programs offer less than 50% of the net sale, which means they’re keeping more than half the profit from sales you send. Regardless of whether the company makes a sale from visitors you send, they’re getting free exposure for every visitor who comes through. Running a business website is extremely low cost and low effort in comparison with running a physical business. Sales tasks on a website are normally completely automated, sometimes so much so that the business is virtually hands off. Furthermore, many are fly by night operations built by people who really don’t have a clue about marketing a product. So before you waste valuable space and risk losing your readers trust by sending them to any old half cooked website, check all your options and ask around with other webmasters who’ve used them and see what their experience has been.

Depending on your websites standings in the search engines, plain hyperlinks out from your website may hold real value. I run a variety of entertainment sites with decent rankings, and I have several advertisers that pay $20 per month or more simply to link to websites they promote. $20 per month isn’t a load of money, but assuming I can sell 10 advertiser links at $10 per link, that’s $100/mo income. It’s very painless to setup and maintain, with changing links only once per month. Compare that with an affiliate program where there’s no guarantee I ever make a single sale, meanwhile some company is guaranteed to get free exposure on my website.

The other major thing to consider is your target audience. Most affiliate programs fit “loosely” with many sites. For instance, entertainment sites do not have a particularly targeted audience, so often times they’ll use affiliate programs that offer t-shirts, posters, gambling, or web hosting. Consider who’s coming to your website, and try to target as specifically as you can the interests of those visitors.

Things to watch out for in an affiliate program

Do they have a minimum payout? Many affiliates will not send a check until you’ve made so much in sales for them. If you don’t get enough sales, you’ll never see a dime.

Get the conversion ratio from other webmasters with websites similar to yours, who are using the program. A conversion ratio is how many visitors they sent to how many sales they got, so 1:85 means they had one sale for every 85 visitors sent to the website. With a conversion ratio you can get a good estimate of how long it would take you to achieve the minimum payout.

Are the statistics tracking from a respected 3rd party company? Check some affiliate forums and get feedback from other webmasters. Find out if the potential affiliate is trusted among your peers more than a few companies have been rightfully accused of cheating webmasters out of legitimate sales commissions.

Is this option generating more profit than the alternative options, such as selling text links or placing Google Adwords? Sometimes you just have to test a program out for a month or two before you can get a feel for how it’s going to perform in the long run.

Is this affiliate program already saturated? With huge affiliate programs like AllPosters, making new sales can be difficult because most of your visitors may have already seen AllPosters, and are less likely to click through your link and buy something. For this reason, it’s also important to utilize the specific product advertisements these companies make available. For instance, AllPosters makes available several “new release” ads, where you might make a sale that you otherwise would not have made by advertising a specific popular poster.

Does this program track visitors you send beyond the initial visit? Do they credit you for sales made on subsequent visits by this visitor when they may not have used your link to arrive at the website? Some affiliate programs like Alienware, which sell high end items (computers and such), are not likely to generate an immediate sale, or “impulse buy”. Very few people, if any, will visit Alienware for the first time, decide they want to purchase a computer, and immediately do so all in one sitting. This makes extended visitor tracking extremely important, especially on expensive items and high commission programs.

If the program is a service with recurring fees, like web hosting, access to a member’s only website, subscription to a magazine, or online casino’s, does the program pay rebill commissions? A rebill is when someone who signs up for a service renews the service, and many companies offer recurring commission payments to the person who initially referred that customer to the site. This is called a rebill, and these programs can generate a steady stream of recurring income.

Advanced methods to examining affiliate programs

Some of the more advanced methods to investigating and testing out affiliate programs are discussed in the subscriber’s area, including subjects such as detecting affiliate skimming, when and where affiliate programs work best, and ways to screen a program before investing valuable traffic.