Affiliate Marketing for Additional Income

Hi,

I’d like to look at alternate streams of income, and talk specifically about Affiliate Marketing.

What exactly is Affiliate Marketing?  Here is a diagram to show you at high level what it is:

Affiliate Marketing

Companies – typically bricks and mortar, set-up websites that sell primarily consumer goods but can also provide services.  They may advertise via AdSense or other methods.  However part of their marketing strategy is to recruit affiliate (you and me) to HELP them sell their products & services.

Most affiliates will join programs that are high in value, and that they can market easily - such as dating, fitness equipment, or weight loss products and even online pharmacies.  The affiliate either has, or creates a site dedicated to the topic at hand and puts up affiliate links.  They then market their site using AdWords, article marketing or other advertising methods to drive traffic to the site(s).

They try and buy impressions for low cost, so may concentrate on long-tail keywords (although the keywords may only get 20-30 hits per month, its the fact that there could be HUNDREDS of them out there that generate this traffic).  Long-tail keywords may also result in HIGHER click-throughs and subsequently sales.  The reasoning is this:

If I’m looking for a treadmill — but maybe just doing research, I may enter “best treadmill for your dollar” and will get millions of results in the search engine.  However if I’m serious to buy, and know what I want my query might be “best place to buy XYZ treadmill model 123-45-XYZ”.  The results that come back will interest me even more because I want to buy.

If I come up on a web site that is advertising the EXACT product, chances are I will click on the link and will be taken to the company that is selling the product.

KA-CHING – if I buy, the site owner get a cut of the profit.  On exercise equipment, you can make as much as $300 for one treadmill!  The margins are VERY high on exercise equipment.

There is a lot of competition out there as well – so it’s a numbers game.  The more entries you get into the search engine – the better the chance that your site comes up and the more opportunity to make money.

But like running your own business, affiliate marketing is not an easy way to make money.  You can resort to black hat SEO techniques (many which still work) or try using white hat methods – like article marketing, directory submissions and link exchanges. 

You also need to be aware of the fact that once that visitor leaves your site they are probably gone for good.  The retailer (or etailer) may keep an cookie active on that users browser, but some individuals clear their cookies after each session — so you could still loose that sale (if they later purchase).

Also when you push a visitor to the etailer, you are loosing them and adding “free” visitors to the etailers site.

So there are pros and cons with affiliate marketing.

There are many top tier affiliates out there, and when you look at their site and see their offering you can clearly see that they spend a lot of time and effort to attract and keep visitors.  In fact, many also sell their own products and services or have branched out into internet marketing – however their primary source of income is their affiliate commissions.

Don’t get me wrong, you can make money working only as an affiliate but you are not growing your business – you are growing someone elses.

Affiliate marketing can also WORK for you in your own business.

Suppose you have 5 or 10 products that you actively market, what if you could get 100 more people to help market those same products?  You multiply, potentially, the number of links pointing back to your site (of course, this depends on how you set-up your affiliate program) and increase the chance that more of your products get sold.

Want to see a VERY successful affiliate marketer in the internet marketing space?  Look no further than Corey Rudl and the Internet Marketing Center (marketingtips.com).  Although the main force being the IMC has passed away, he set-up a business system and process that is still working and generating income for his family and keeping his staff employed.

If you don’t want the headaches of managing your own program, the sell your products through someone like ClickBank.  Although the rate of returns are high, it is the easiest way to set-up your own affiliate program.  You do lose some control because you are not adding that visitor/purchaser to your e-mail list — but there are ways around this (squeeze page comes to mind).

Through an affiliate program you are also giving up some revenue – it could be a little 10% – 25% or more — as high as 50% or even 75%.  You also maintain all the service and support.

The alternative to an affiliate program is to offer multiple packs to resellers, like James Brausch has done with MuVar 2008 (and many other products).  In this way you get cash up-front and the reseller holds the inventory and deals with refunds.  You still sell the product, but generally at a higher price since you don’t want to compete with your resellers.  But chances are you will still be providing service and support.

The reseller model is probably more beneficial to you.

Affiliate marketing is a great way to add an additional revenue stream.  However to use this as your sole method of generating income is not advisable — remember, you want to set-up your own business and grow your business .  You may want to become an affiliate for other peoples products and even set-up your own affiliate program. 

What you always want to think about is ways to grow your business, running your own affiliate program is one of those ways or recruiting resellers is another method.  They can both work for you.

Regards,

Mohamed

About Rob 'n Mo

I'm a man of mystery. I like anonymity, but on the WWW there is not much of it...
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