Are Affiliate Programs for You?
| Category: Affiliate Marketing - Basics | Date: 2003-04-28 |
Not so long ago, Amazon.com began selling books online. Part of the genius of their approach was their "affiliate program," where website owners are paid a commission for selling a retailers products or services. Amazon.coms own affiliate program, which began in July of 1996, has signed up more than 30,000 Net entrepreneurs, twice as many as its nearest competitor.
While revenue sharing programs on the Internet go by different names -- affiliate, associate, bounty, and referral -- the model is basically the same: you put my logo on your site, and I pay you when your visitor buys from me. A special URL tracks where the visitor came from and the purchases he or she makes. Unlike the CPM advertising model, the merchant doesnt pay (and you dont make money) unless a sale is generated.
While generally considered a good thing for both the vendor (essentially free branding) and the website owner (the promise of incremental revenue), the contractual details of revenue sharing programs vary widely. Make sure you read the fine print. The following are five points that should be considered carefully by a website owner before entering into an affiliate program.
1. Payment Terms
Does the merchant pay on every purchase, or only on the first? Only for special products or for every product? Only on the first visit, or on every visit? And whats the commission rate? A flat charge (such as a bounty that might be offered by an online community) or a percentage of sales (and does this rate depend upon sales volume)? Is there a certain sales threshold that must be reached before earning credit? And is payment withheld until a certain level is reached?
Read the contract before you sign. If you dont like the terms, try to negotiate a better one. If you have a good site, you may be able to get more favorable terms, such as a higher commission rate. If you still cant get the deal you want, walk away. There are plenty of other programs out there, with more coming online every day.
2. Getting Back to Your Site
Does the merchants page have a way to get your visitors back to your site? One potential problem with offering another companys goods and services is that you may lose your website visitors in the process. Once your visitor has clicked onto anothers page, he may not easily find his way back.
Recently, some of the more innovative revenue sharing programs have solved this problem by adding co-branding or links back. For example, One & Only Internet Personals (http://www.oneandonly.com/associates/welcome.htm?AdvertisorID=249) offers a customized version of their classifieds service that integrates seamlessly with the look and feel of the owners website. Although this requires additional work on the part of the merchant, those who do offer this service will have a huge competitive advantage over those who do not.
3. Buying through You
What will you do as a website owner to keep your visitors coming back to buy at your site -- as opposed to going directly to the merchants? Is your content, and the way you integrate e-commerce, compelling? What you sell should complement the message you are delivering. For example, if youre talking about natural health, sell vitamins, not long distance telephone service. Finally, be careful not to cross the "advertorial" boundary lines. A couple of bucks is not worth your editorial integrity.
4. Try Several
Join several programs. The more you join, the more you will learn. Some merchants, such as Cyberian Outpost and Barnes & Noble, have weekly e-mails that are sent by Affiliate Account Managers to participating site owners. While these emails offer information specific to that Program, they also contain helpful retailing tips you can use to improve your overall merchandising strategy.
After youve analyzed the various programs, choose one merchant for each product category. You could offer the same product from two different merchants (for example, books from both Amazon.com and Barnes & Noble), but that could be confusing to your visitors. Pick the brand that you think is best and promote it thoroughly. There may be some benefits to promising the merchant an "exclusive." For example, CDNow has an Elite Fleet program that offers small perks for pledging your merchandising allegiance to them.
5. Stay Focused
Unless you plan on going into the Mall business, keep focused on what it is you do well. Keep your content fresh and interesting and your visitors will return. If using someone elses brand (the merchants) helps build your own brand, thats great. If you make some extra money doing it, even better. But remember, affiliate programs are unlikely to make anyone rich (except the portals such as Yahoo! and AOL). Use these programs as you would any other tool in your web toolkit -- to attract and retain your visitor.
About the Author
You can contact James L. Marciano at (212) 634-6199. For a comprehensive guide to the best revenue sharing programs on the Internet see details below.
jlmarciano@refer-it.com
http://www.refer-it.com.
While revenue sharing programs on the Internet go by different names -- affiliate, associate, bounty, and referral -- the model is basically the same: you put my logo on your site, and I pay you when your visitor buys from me. A special URL tracks where the visitor came from and the purchases he or she makes. Unlike the CPM advertising model, the merchant doesnt pay (and you dont make money) unless a sale is generated.
While generally considered a good thing for both the vendor (essentially free branding) and the website owner (the promise of incremental revenue), the contractual details of revenue sharing programs vary widely. Make sure you read the fine print. The following are five points that should be considered carefully by a website owner before entering into an affiliate program.
1. Payment Terms
Does the merchant pay on every purchase, or only on the first? Only for special products or for every product? Only on the first visit, or on every visit? And whats the commission rate? A flat charge (such as a bounty that might be offered by an online community) or a percentage of sales (and does this rate depend upon sales volume)? Is there a certain sales threshold that must be reached before earning credit? And is payment withheld until a certain level is reached?
Read the contract before you sign. If you dont like the terms, try to negotiate a better one. If you have a good site, you may be able to get more favorable terms, such as a higher commission rate. If you still cant get the deal you want, walk away. There are plenty of other programs out there, with more coming online every day.
2. Getting Back to Your Site
Does the merchants page have a way to get your visitors back to your site? One potential problem with offering another companys goods and services is that you may lose your website visitors in the process. Once your visitor has clicked onto anothers page, he may not easily find his way back.
Recently, some of the more innovative revenue sharing programs have solved this problem by adding co-branding or links back. For example, One & Only Internet Personals (http://www.oneandonly.com/associates/welcome.htm?AdvertisorID=249) offers a customized version of their classifieds service that integrates seamlessly with the look and feel of the owners website. Although this requires additional work on the part of the merchant, those who do offer this service will have a huge competitive advantage over those who do not.
3. Buying through You
What will you do as a website owner to keep your visitors coming back to buy at your site -- as opposed to going directly to the merchants? Is your content, and the way you integrate e-commerce, compelling? What you sell should complement the message you are delivering. For example, if youre talking about natural health, sell vitamins, not long distance telephone service. Finally, be careful not to cross the "advertorial" boundary lines. A couple of bucks is not worth your editorial integrity.
4. Try Several
Join several programs. The more you join, the more you will learn. Some merchants, such as Cyberian Outpost and Barnes & Noble, have weekly e-mails that are sent by Affiliate Account Managers to participating site owners. While these emails offer information specific to that Program, they also contain helpful retailing tips you can use to improve your overall merchandising strategy.
After youve analyzed the various programs, choose one merchant for each product category. You could offer the same product from two different merchants (for example, books from both Amazon.com and Barnes & Noble), but that could be confusing to your visitors. Pick the brand that you think is best and promote it thoroughly. There may be some benefits to promising the merchant an "exclusive." For example, CDNow has an Elite Fleet program that offers small perks for pledging your merchandising allegiance to them.
5. Stay Focused
Unless you plan on going into the Mall business, keep focused on what it is you do well. Keep your content fresh and interesting and your visitors will return. If using someone elses brand (the merchants) helps build your own brand, thats great. If you make some extra money doing it, even better. But remember, affiliate programs are unlikely to make anyone rich (except the portals such as Yahoo! and AOL). Use these programs as you would any other tool in your web toolkit -- to attract and retain your visitor.
About the Author
You can contact James L. Marciano at (212) 634-6199. For a comprehensive guide to the best revenue sharing programs on the Internet see details below.
jlmarciano@refer-it.com
http://www.refer-it.com.
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