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Affiliate Marketing is having Affiliates do your Marketing for you. What I mean
by Affiliate is someone who tells people about your product/service and you pay
them for a desired response, such as a purchase.
Affiliate Marketing is one of the best ways to get the word out about your
product/service.
The best way to pay Affiliates is pay per sale. This means that you only have
to pay your Affiliates when they actually make a sale. This reduces your advertising
costs dramatically. your Affiliates take on all the risks so you don't have
to worry about wasting your money on advertising which may not produce any results.
Using Affiliate is a very cheap way to advertise, however it is very effective.
The software required to start up your own Affiliate program can cost only about
$50 per month.
Then after that just wait for people to start promoting your product/service
for you.
Please remember that 5% of your Affiliates will do 95% of the selling. What
I mean by this is that most of your Affiliates will just sit there and do nothing.
This can be countered if you teach them what to do, exactly how to do it and
providing everything for them so they have to do as little work as possible.
To find out about teaching your Affiliates please see the "How To Super
Charge Your Affiliates" article
You don't have to use this form of advertising just to sell your product or
service. You can also use it to grow your opt-in mailing list. This is discussed
in another article.
How Much Should You Pay Your Affiliates
How much you pay your Affiliates really depends on how much your product/service
costs, its profit margin, how much you're willing to give up and what action
you want to take place.
Lets say that your product is priced at $100. Lets also assume that it cost
you $10 to make it. This leaves you with $90 profit.
How much of this do you want to give away to the person that made this sale
possible?
Personally, I believe that you should give a rather high percentage of the
profits back to the affiliate (Depending on how many sales they regularly generate),
because without them, you wouldn't have made that particular sale at all, so
reward them for it.
A fairly decent reward is about 50% of the revenue generated. Your product
is priced at $100 so a $50 commission is quite generous. It really depends on
your other costs (such as a mortgage) you have, which would help decide on a
fair commission to both you and the Affiliate.
Another factor which plays a part is how much additional advertising you do,
such as pay per click. For example, if you rely solely on your Affiliates to
Market for you, then you may want to reduce the commission you pay to them to
help you survive. However, you may want to pay them more, to encourage them
to send more sales you way. It really is a judgment call.
On the other hand, if you advertise in other ways effectively, then you can
afford to pay higher commissions, because you're not putting all your eggs in
one basket.
In the end it's all down to how greedy or generous you are. The best advice
I can give you is to pay the affiliate what you think he/she deserves. Hopefully
that way everyone is happy and earning their fair share.
That is the key to a successful affiliate program.
About the Author:
Stephen Warren, the creator and webmaster of http://www.marketershandbook.com
, a completely free business and marketing resource which anyone may use. |
