Many solo business owners have found an additional income stream that adds to the business bottom line in online affiliate sales. In fact, there are quite a few individuals that generate 100% of their Internet income through their affiliate commissions.
When you consider that this business strategy completely sidesteps having to create products, operating a merchant payment system, shipping out purchased goods, and responding to customer complaints, the affiliate model seems like an idea worth looking into.
I have always looked at affiliates as "drum beaters." They are the ones who trudge through the bush and scare up prospects (web traffic) for someone else's sales. They are paid a commission (a portion of the profit) on every sale that is completed by one of the prospects they sent.
Whether affiliate sales are a viable strategy for your business will likely depend upon the niche you are in, the size of customer list you maintain, the types and number of affiliate products that are available, the size of the commissions on those products, and your desire to "beat the bush" for another entrepreneur.
We'll discuss running an affiliate program as part of your business in another segment. Right now, we're focusing on just becoming an affiliate or associate for someone else's products.
Here are a few suggestions or tips that will help you to create and run a profitable affiliate arm to your own business:
1. Only deal in products related to the niche your business is already in. Your affiliate sales will just seem like an extension of your own business. Your customers will feel "used" or taken advantage of if you send them away from your web site to preview a bunch of random offers like Cialis tablets, debt consolidation, and inkjet cartridges. On the other hand, if the products you mention somehow add increased value to your web site because they are relevant to the subject, your customers will thank you for tipping them off to some additional resources.
2. Search for products that have a high dollar value and a high commission rate. I would concentrate on products with commissions of 40% or more. You can promote $10 products with 70% commissions and still only realize a profit of $7 per sale. It's going to take a lot of sales to make that sort of commission worthwhile.
3. Know the companies you're going to be working for. There are several reasons why you want to learn what they're all about before you join their program. How would you like to spend money and effort to drive a lot of traffic to a product and then never get paid for your effort? It happens more often than you'd like to think.
How would you like to have some of your customers complaining to you that you were recommending a product that was awful? Or a company that made a lot of promises but never followed through?
4. Understand the product you're peddling. Own it, use it, and if you don't like it or it doesn't live up to your expectations, don't sell it! Your reputation in your own business will be damaged if you are even affiliated with a lousy product or service.
If you know the product well and have a great experience yourself in using it, your enthusiasm will carry over into your sales message and you'll be much more convincing in your recommendation.
5. Look for two-tiered payouts. You'll be paid on the first tier but also have the opportunity to earn even more on the sales of those that you recruit to the program. The larger the customer base you have, the more this strategy makes sense.
6. Try to find affiliate programs that offer recurring commissions. A good example would be a web hosting company that pays a monthly commission as long as the customer hosts his accounts with that company. You do the work of finding buyers once, but reap the reward many times over in the coming months. Other typical businesses that pay recurring income are subscription based membership sites, ISPs, paid content sites, and application service providers (ASPs).
7. Make sure the company uses professional and well-managed software to track affiliate sales and make monthly payments. Gravitate toward those companies that let you track your sales and commissions online. If you have to simply trust the word of your employer about how many sales you made, he may become a little "forgetful."
Why not evaluate your business and see if adding affiliate sales makes sense for the niche you're in and the products you offer.
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