As we’ve discussed in the first chapter, successful businesses try different strategies to reach customers.Sofar you’ve learned, in Chapter 21, about using the Yahoo! Shopping directory, and you’ve also learned about search-engine Pay Per Click campaigns. And in Chapter 26, you learned about using “natural” search-engine results.But is that enough? You may not be able to make money using PPC, and search-engine optimization can be incredibly difficult in some cases, so you can’t stop there. In any case, if you don’t understand your other options you may be missing a huge opportunity. There are many ways to reach customers online—as with offline businesses, “one size does not fit all.” It’s important to keep learning and exploring, and to experiment with different ways to market your store. You don’t know what will work until you try it, so you have to try many things. Who knows, you may hit a gold mine and take a small “hobby” business and turn it into something really big.
Using Affiliate Programs
Affiliate programs are a proven method for making money online (although that doesn’t necessarily mean it’s easy money). Most of the Internet’s large online businesses use affiliate programs as one of their promotional tools.An affiliate program is a system through which you pay other web sites for channeling buyers to your site. Affiliates may be paid for
■ Each sale made at your web site (this is the most common form of commission).
■ Each time they send a visitor to your site.
■ Each time they send a lead to your site.
NOTE Yahoo! has integrated the Commission Junction affiliate system into the Merchant Solutions e-commerce product. Click the Affiliate Link in the Promote column of the Store Manager page. Traffic from one site to another is generally tracked through one of two methods:
■ The affiliate is given a special link with a code in it identifying the affiliate; when someone clicks on that link, special tracking software places a “cookie” on the visitor’s computer and can follow the visitor through the site; if they buy, credit is assigned to the affiliate.
■ The affiliate places a small piece of code onto their web pages; when someone opens the page, a “cookie” is placed onto the person’s computer; if that person then visits your site, they can be identified as “belonging” to the affiliate. All affiliate systems use “cookies”—there’s really no way around it.How do you create an affiliate program? Somehow, you need software to track visitors to your site and to manage the process of recording sales and assigning payments to the appropriate affiliate. You can either use an affiliate service, which runs all necessary software for you, or you can install software on your own server.
■ The quickest way is to sign up with one of the major affiliate services, primarily LinkShare (www.LinkShare.com) and Commission Junction (www.CommissionJunction.com). These companies have come to dominate the business.
■ You can use one of the smaller affiliate systems, such as FusionQuest (www.fusionquest.com) or Affiliate Tracking Network (http://www.affiliatetracking.net/).
■ You can install affiliate-tracking software on your own server. There are many different packages available.
As usual, there are advantages and disadvantage to all these methods:
Using one of the major services is a good way to get started, but can be very expensive. For instance, if you want to work through Commission Junction, you can expect the following expenses:
■ $2,500 setup fee
■ $250 per year
■ $3,000 deposit toward commissions
■ 30% commission (for every $1 paid to an affiliate, a 30-cent fee is paid to Commission
Junction)
■ $500 monthly minimum—even if you don’t pay a single affiliate, you’ll pay Commission
Junction a $500 monthly fee
■ No maximum monthly commission
Consider that $500 minimum. If you pay affiliates a 10% commission, you have to make almost $17,000 in sales before you reach the Commission Junction’s commission minimum. The smaller systems let you get started at a much lower cost (but they don’t have the large networks of affiliates that Commission Junction and LinkShare can provide). For instance, here’s what you’ll pay for the basic FusionQuest (www.fusionquest.com) service
■ $195 setup fee
■ $19.95 per month
In addition, if you want access to their network of affiliates (around 40,000), and if you want them to process payments to affiliates for you, you’ll pay this:
■ 10% commission (that is, for every $1 paid to an affiliate, a 10-cent fee is paid to
FusionQuest)
■ $0 monthly minimum
■ Maximum monthly commission of $650
Don’t think that an affiliate program is a quick fix, though. It can take considerable work tomake it worthwhile. The main problem is recruiting affiliates to your program. Here are a few ideas
■ Commission Junction and LinkShare, and some of the smaller affiliate systems, have networks of affiliates to which you can promote your program (Commission Junction has hundreds of thousands—they reported 350,000 in 2002, so it’s probably considerably bigger now; FusionQuest, a much smaller system, has around 40,000). Investigate the different ways you can promote to them, and make sure you are listed in the system’s merchant directory.
■ List your program with the various affiliate directories (there are around 50 of them). There are services, such as AffiliateFirst (www.affiliatefirst.com), that will register your program in these directories for you very affordably.
■ Seek out sites that attract the sort of people you want to attract, and invite them to join your affiliate program.
■ Consider using a service such as LinkProfits.com to help you track down and sign up good affiliates.
■ Make sure you have a page on your site, with relevant keywords in combination with the words affiliate and associate, so that people searching for affiliate programs and selling products like yours can find you.
Should you use an affiliate network? Perhaps, if you are willing to invest not just money buttime in making it work.
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