One of the major attractions of becoming an affiliate is the
small amount of risk involved. As an affiliate, you have little or no...
• product development expenses
• advertising costs
• inventory to maintain
• overhead expenses (salaries, physical location, etc.)
In other words, affiliates do not have millions at stake.
But you do have one big risk...
If a merchant or backend provider goes out of business, it
takes you with it. Let’s talk briefly about how to minimize this risk...
After you review the affiliate directories and backend
providers, you should have a good selection of programs. How many programs
should you choose? How do you know which ones are solid?
You don’t, really. Yes, you can weed out the dogs by doing
the basic research outlined below. But most of us just don’t have the ability
or time to thoroughly analyze a company, its financials, and its business
model… and then predict success or failure.
Write And Publish Your Own Outrageously Profitable Ebook(r) In As Little 7 Days
-----
So your best bet is to spread your business among as many
programs as possible that fit with your Site Concept. But there are some
important qualifiers to this policy...
1) If you represent 10 programs, don’t put them all on the
same Keyword- Focused Content Page. Work in only the few that are tightly
relevant to the content of each page.
2) Pick the best-of-breed from each category of merchant.
For example, if you plan on representing a Net marketing company, SiteSell
would be the obvious choice (ahem!).
If you plan unusually heavy support for a given category of
product, you might want to represent the best two merchants. For example,
suppose you foresee hundreds of book links on your site. It might be a good
idea to choose the best 2 online bookstores -- if Bookstore A and Bookstore B
fit with your concept and both seem to be stable companies, then use these two.
No more, though...
3) Don’t choose too many programs. Tracking each program
takes time, so 10 programs is probably a good balance. If any one of them dies,
you don’t lose too much.
4) Your best results will come from focusing on a smaller
group of quality programs (from within the 10). Their products must...
• be excellent • be complementary with, even enhance, each
other • fit your concept and... • be from a rock-solid company. Since you will give
these companies more attention than the others, you must feel very comfortable
with their business prospects.
Here’s the bottom line... Don’t give too much emphasis to
any single program, unless you have some special reason to feel unusually
comfortable with it. Things happen. So protect yourself by choosing a variety
of affiliate partners. Of course, you can also reduce your risk by weeding out
the dogs through some basic research...
Prune by Eliminating High-Risk Programs
Find the good programs and eliminate the dogs by considering
the following plus signs, minus signs, and red flags. Let’s start with the plus
signs, signified by +, which means “good things to look for.” Here they are, in
the approximate order of importance...
+ High quality product or service -- Remember, it’s your
reputation that is on the line (and online!). Don’t recommend products that
UNDERdeliver.
+ Merchant has a good site that sells effectively.
+ Ability for affiliate to link straight to individual
products, rather than just to the home page. (If the visitor has to find the
product that you recommend, your Conversion Rate plummets.)
+ Type of payment model... Pay-per-sale and pay-per-lead are
good. This is true “performance marketing.” If your referred visitor delivers the
desired response, you get paid. What about “pay-per-click?” See red flags
below.
+ Affiliate Support...
• Accurate, reliable, real-time, online accounting,
preferably with some kind of ability to “audit” by spot-checking
• Detailed traffic and linking stats
• Notification by e-mail when a sale is made
• Useful marketing assistance -- provides traffic-building
and sales-getting tools
• High-quality newsletter that educates, trains, and
accounts for amounts earned
• Professional marketing materials available
• Affiliates receive discounts on products
+ Pays good commission -- Hard goods have lower margins than
digital ones so their commissions will be lower. Still, you should make at
least 10% (hard goods) or 20% (digital goods) on any product that you recommend.
Don’t be scared off by low-priced products if they offer a good % commission --
the lower dollar value per sale is offset by the higher sales volume.
+ Must be free (no charge) to join, no need to buy the
product.
+ Lifetime commission -- If the program pays a commission on
future sales of other products to customers that you refer, this is a huge
plus.
+ Two-tier commission -- If the program pays a commission on
affiliates who join because of you, this is also great.
+ Lifetime cookie -- Do you receive a commission if the
person you referred returns and buys within one month? Three months? The cookie
that tracks this should not expire.
+ Restriction on number of affiliates -- You won’t find many
of these. But if you do find one, grab it.
+ Monthly payment, with reasonable minimum. Do all those
plus signs have to be present? No. But the more, the merrier.
Minus signs are definite detractors. Naturally, if you are
unable to give a + to any of the criteria listed just above, consider its absence
to be a minus. And watch out for these negative factors...
— Slow and/or poor support.
— Unethical conduct of any kind.
— Reports of late (or lack of) payments.
— Allowing spam, or seeming to send spam themselves.
— Defective affiliate-joining process. Hey, if they can’t
get this right...
— Clauses in the agreement that you find unacceptable.
• Example -- If lifetime customers are important to you,
then a clause that allows unilateral termination or modification of the
agreement at any time by the company without just cause effectively makes the
lifetime commitment of no value.
• Example -- No exclusivity (i.e., you should be allowed to
represent more than one book vendor).
And perhaps the most worrisome factor of all…
— “The dark side” of affiliate programs. Is the program
really just a way to legally bribe folks to recommend overpriced,
UNDERdelivering products in order to collect excessive commissions?
Red flags are warning signs...
“Pay-per-click” method of payment. In this method, you get
paid whenever a visitor clicks on your link. No purchase or lead-generation
necessary. Unfortunately, it’s wide open for abuse -- very sophisticated folks
create incentives to get thousands of people to click on their links. But the
visitors could care less about the products being promoted. The scam is
virtually unstoppable. And merchants end up paying for nothing.
So merchants cancel or change the program. Microsoft’s
Clicktrade used to offer pay-per-click backend programming for merchants.
Microsoft dropped it due to the level of fraudulent activity that hurt
merchants.
Multi-tier commission. This is online Multi-Level Marketing
(MLM), which is perfectly legal. Do your due diligence to make sure, of course,
that a multi-tier program is not an illegal pyramid scheme. If the “game” is to
earn income by signing up others, you are most likely dealing with a pyramid.
Many people confuse honest, legal MLM with dishonest, scammy pyramid schemes.
With MLM (also known as Network Marketing), it becomes as important to build a
strong downline as it does to sell product. Also, MLM companies are subject to
numerous regulations (to prevent them from becoming pyramids, basically). Not
all online companies are complying (or even know about this!).
Write And Publish Your Own Outrageously Profitable Ebook(r) In As Little 7 Days
-----
Watch for a big shakeout with many of these companies going
belly-up. If multitier interests you, I would recommend that you check out
established offline MLMs that are now online.
Or... investigate all others extremely carefully before you
decide to invest a lot of time in these.
Poor or little info about affiliate program available. What
kind of priority could it have?
Dead links on merchant site.
No clear anti-spamming policy visible on site.
Site that promotes “get-rich-quick” gimmicks.
Financially unstable. You can lose a lot of momentum if a
company goes under, especially if you are banking on lifetime customer/2-tier
promises.
No comments:
Post a Comment