Affiliate marketing is a new concept for many people. The idea is to hire and train a sales force that you don’t have to pay until they make a sale. It’s an idea whose time has come and because of the Internet it is possible for any business. It is also desirable and can produce tremendous results for your business.
But let’s draw a distinction between affiliate marketing and reselling:
A reseller is someone who buys your product or service and sells it to another party with a markup. That’s how they make their money. This type of relationship works real well for service businesses.
By contrast, an affiliate marketer is someone who pre-sells a product or service for someone else then sends the customer to the company he is marketing for to by a product. The affiliate usually has a code that identifies him as the seller whenever a sale is made. The company then pays the affiliate based on total sales over a period of time.
Both types of relationships have their pros and cons. I personally like affiliate marketing because it allows you to track your sales and you have more control over your product or service. A reseller can always change your product or service without your knowledge, which could produce some credibility issues for you down the road. On the other hand, with affiliate marketing, since the customer always comes to you to buy, you stay in control.
Three things to keep in mind with affiliate marketing:
- Develop your program before you start it – I can’t stress this enough. If you get your affiliate marketing program running before you’ve fully developed it you’ll run into problems for sure. You need to think about how often you’re going to pay your affiliates, how much commission you’re going to pay them, and what kind of materials you’re going to support them with. Don’t underestimate prior planning.
- Support your affiliates with effective sales material - Your affiliates are working hard for you. Give them the materials they need to be successful and you’ll see tremendous results. Take the time to create banner ads, graphics, and sales letters that they can use in their marketing efforts. Also, by running specials periodically, you can keep your affiliates juiced up and motivated.
- Pay enough to make it worth their while – Don’t offend your affiliates with a small commission. If your affiliates only make 10% per sale, they likely will not be motivated to sell your product or service. I recommend at least 30% and for most products, especially digital products, 50% is not out of the question. If you pay your affiliates well they will be motivataed to sell your product.