[Show Transcript]
I’m Randy Charach from RandyReport.com and THIS is the show that takes you from internet zero to business hero!
In this week’s lesson you’ll gain greater insight into affiliate programs and learn why promoting affiliate programs is the simplest way for most people to get started right away and make money online. You’ll also learn why offering an affiliate program for your products and services is almost always the quickest way for you to find new customers for your product or service, and your online business.
Affiliate marketing is where a business rewards third parties for bringing them new website visitors or customers. Its’ a great model and a way of conducting business that many online marketers depend on to create revenue.
Let’s first look at affiliate marketing from the point of view of the lone independent Internet marketer…most likely you. By joining an affiliate program or multiple programs you have the ability to actually make money online without a website, any staff, merchant accounts, you don’t even need a phone number, let alone an actual business where you offer a product or service and you still can make money and a lot of it.
How is this possible?
In order to get paid, typically all you need to do is send qualified visitors to a website. We’ll talk in next week’s lesson about how to do get traffic to a website, but for now, as we focus on affiliate marketing, the important thing for you to realize is that there will really be no excuse for you to get started marketing online and making money once you click in to this concept and begin actively promoting the websites of the affiliate programs you belong to.
There are many ways to join affiliate programs and the best way for you to do this is to join what is known as an affiliate network, as well as a select number of specific individual affiliate programs offered directly by companies which are not a part of the affiliate networks that you belong to. An affiliate network is a company that aggregates affiliate programs for a variety of other companies and offers those programs to you the affiliate marketer, all under their one roof. This works out really well for you, because the tracking is all in one place and your payment comes either by way of check or automatic bank deposit from this one company the affiliate network regardless of which programs you promoted within that network.
In addition to promoting companies within an affiliate network or a few different affiliate networks, there’s nothing wrong with also promoting individual company affiliate programs a long as they are a company that you know, trust, and is easy to do business with. As you know if you’ve been watching my show, I don’t recommend specific websites and in this case affiliate networks are programs on the show, because things change so quickly online. To see my recommendations on affiliate programs and networks that you can join simply go to Randyreport.com and check out the free resources area on the site.
Typically an affiliate program offers to pay its affiliates a percentage of all the sales that result directly from the affiliate’s efforts of sending a customer to their website. The percentage ranges from anywhere as low as 1 percent up to over 100%. It’s extremely rare to see 1% or 100% or more, but it does happen.
The low percent would typically be offered by a low margin, high turnover type of business offering a physical product. Higher percentage payouts are generally offered by online businesses offering digital products such as e-books and website memberships. The 100% and above type payouts would occur in a situation where, for example you’re receiving a 1-time payment for referring a subscription-based service. For example, a website that charges its customers $10 per month to be a member may pay out a onetime affiliate commission of $15. Commissions on digital products are typically 50% and sometimes even higher.
Now, from the point of view of the party that offers the affiliate program, and that’s maybe you, if not now, hopefully soon when you have your own products and services to offer, this is also a winning proposition. In fact, if you set up your business as I would suggest you do, then you can easily afford to pay out 100% commissions on some of your products. You wouldn’t do this on all of your products, but in some cases it pays for you to do so. If you know the lifetime value of your customer, and let’s say it’s $1000 in profit and you have a product out there that sells for $50 that brings customers in to your business then it’s well worth it for you to give up the entire $50, or maybe even more in order to gain that new customer. This would be known as a self liquidating lead, if for example you ended up with zero profit and zero loss each time you gained a new customer.
So for the merchant, offering an affiliate program is a great way to – pay for performance – as you build an army of affiliate sales people. Since the affiliates are bringing in new customers that would not likely be achieved other ways, it’s a very cost effective way to build a business.
For the affiliate marketer, it’s a way to make money without having to set up a business and all that goes along with it. Affiliate marketing can BE your business and provide a constant stream of income for you. Like everything else, it requires you to roll up your sleeves, put systems in place, and run those systems.
Okay, here are a couple of bits and pieces regarding variations on affiliate programs. Some programs offer commission on two or more levels. Basically, once you get past two levels we’re really talking about multilevel marketing so I’ll just explain a two level, or two tier program. A two tier program is set up so you can have other affiliates join under you and then you get paid on all of their direct sales as well as yours. For example, a $100 product pays $35 on the first level 15 on the second level. If someone buys the product from your affiliate link then you earn $35. If someone joins the company’s affiliate program from your link, and then makes a sale, then they will earn $35 from the sale and you’ll earn $15 from that same sale.
Some companies will also pay you based on other actions other than making a sale. An example of this would be a credit card company that pays you for sending someone to their site, who then fills out an application for a credit card. You’re being paid for the lead. Some companies will even pay you for sending someone to a site that simply fills in their zip code. Now, it’s probably obvious to you that you’ll get paid more from the credit card company than the company where you send someone who simply fills in a ZIP code.
I bring this up to make the point that although I started off by saying that you can make money almost right away as an affiliate marketer, I need to remind you that nothing in life worthwhile comes without some sort of effort and involvement on your part. Making a few extra dollars as an affiliate marketer is easy and requires very little effort, but when you get more into it, and the stakes get higher, that’s when you need a well thought out and executed website or many websites, and that’s when you do you need to start tracking your results.
What I really wanted to accomplish today and I hope I have, is to let you know that the affiliate model is a win-win scenario and an integral and important part of Internet marketing. You’re going to want to dig deeper into affiliate marketing both as a publisher who promotes affiliate programs and as an advertiser who offers an affiliate program. I can think of few situations where you wouldn’t benefit from participating on both sides of the scale of affiliate marketing. It’s a great way to make money online, build your list and build your business.
‘QUESTIONS FROM STUDENTS’
Our question today is from Malcolm H. who writes:
“Hey Randy, you still pulling tricks? Anyway, I was wondering if you could advise us on some cool tricks such as cookie stuffing so we can make more money quickly through affiliate marketing.”
Well, Malcolm, I appreciate your question, oh by the way I think I know who you are if we met at an Internet marketing conference where I actually performed my magic show. For those of you watching and have no idea what we’re talking about — I used to be a professional magician, but no Malcolm, I don’t do that anymore.
Not only do I not perform magic tricks anymore, I highly recommend you stay away from activities known as black hat or even gray hat methods where you actually try to outsmart or cheat the intended way of doing business as set out by, in this case, the affiliate program managers. Cookie stuffing for example involves placing an affiliate tracking cookie on a website visitor’s computer without their knowledge, which will then generate revenue for the person doing the cookie stuffing. Not only does this generate fraudulent affiliate sales, but can also effectively override other affiliate cookies, and ultimately steal their commissions. There are many other ways to try to hijack other people’s commissions and make money through methods which are against the TOS terms of service of affiliate programs and search engines, and I simply suggest that you focus your energy on legitimate and fair and honest ways of making money because there’s plenty of money out there to be made in that way and in the long run you’ll be much better off if you always go with the straight and narrow and take the high road.
[End of Show Transcript]
