What Are Affiliate Programs?

Simply put, affiliate programs, also called associate programs, are arrangements in which an online merchant Web site pays affiliate Web sites a commission to send them traffic. These affiliate Web sites post links to the merchant site and are paid according to a particular agreement. This agreement is usually based on the number of people the affiliate sends to the merchant's site, or the number of people they send who buy something or perform some other action. Some arrangements pay according to the number of people who visit the page containing their merchant site's banner advertisement. Basically, if a link on an affiliate site brings the merchant site traffic or money, the merchant site pays the affiliate site according to their agreement. Recruiting affiliates is an excellent way to sell products online, but it can also be a cheap and effective marketing strategy; it's a good way to get the word out about your site.

There are at least three parties in an affiliate program transaction:
The customer
The affiliate site
The merchant site
In 1996, Jeff Bezos, CEO and founder of Amazon.com, popularized this idea as an Internet marketing strategy. Amazon.com attracts affiliates to post links to individual books for sale on Amazon.com, or for Amazon.com in general, by promising them a percentage of the profits if someone clicks on the link and then purchases books or other items. The affiliate helps make the sale, but Amazon.com does everything else: They take the order, collect the money and ship the book to the customer. With over 500,000 affiliate Web sites now participating, Amazon.com's program is a resounding success.

Over the past few years, affiliate programs have grown enormously in popularity, taking many interesting forms. For many Web sites that don't deal much in e-commerce (selling products or services online) themselves, functioning as an affiliate is a good way to participate in e-commerce.

Affiliate Program Payment Arrangements
There are three basic types of affiliate program payment arrangements:

Pay-per-sale (also called cost-per-sale): Amazon.com's affiliate program is an example of a pay-per-sale arrangement. In this arrangement, the merchant site pays an affiliate when the affiliate sends them a customer who purchases something. Some merchant Web sites, like Amazon.com, pay the affiliate a percentage of the sale and others pay a fixed amount per sale.

Pay-per-click (cost-per-click): In these programs, the merchant site pays the affiliate based on the number of visitors who click on the link to come to the merchant's site. They don't have to buy anything, and it doesn't matter to the affiliate what a visitor does once he gets to the merchant's site.Example Adsense

Pay-per-lead (cost-per-lead): Companies with these programs pay their affiliates based on the number of visitors they refer who sign up as leads. This simply means the visitor fills out some requested information at the merchant site, which the merchant site may use as a sales lead or sell to another company as a sales lead.
There are a number of other arrangements as well. Basically, a company could set up an affiliate program based on any action that would benefit them, and then pay their affiliates based on the number of customers the affiliates send them who perform that action.

There are a couple of very popular variations on these basic payment plans:


Two-tier programs:These affiliate programs have a structure similar to multilevel marketing organizations (also known as "network marketing") such as Amway or Avon, which profit through commission sales and sales recruitment. In addition to receiving commissions based on sales, clicks or leads stemming from their own site, affiliates in these programs also receive a commission based on the activity of affiliate sites they refer to the merchant site.

Residual Programs: Affiliates in these programs can keep making money off a visitor they send to the site if the visitor continues to purchase goods or services from the merchant site. Many online merchants who receive regular payments from their customers (such as monthly service fees) run this sort of affiliate program.
Additionally, there are a few pay-per-impression affiliate programs. Companies running these programs, also called pay-per-view programs, pay affiliates based only on the number of visitors who see their banner ad. Usually, this sort of arrangement is not structured as an affiliate program, but simply as a traditional advertising program. The advantage affiliate programs have over traditional advertising is that in an affiliate program, an online merchant only pays its affiliates when it gets a desired result. Traditional advertising, such as the ads you see on TV and a lot of the banner ads on the Internet, is relatively risky for the advertiser. They spend money on advertising based on a guess of its effectiveness. When an ad brings the company more money than it spent on that ad, the ad is a success. If the company makes less money than it spent, it has to swallow that loss. With an affiliate program, an online merchant only pays its affiliates when things are working. Because there's much less risk to the merchant, it's a lot easier for Web sites to join affiliate programs than it is for them to attract advertisers.

INTRODUCTION TO HOW AFFILIATE PROGRAMS WORKS

These days, it's remarkably easy to set up your own Web site. If you have a computer connected to the Internet, you can simply go to a site such as GeoCities or AOL and use their ready-made Web design templates to construct a simple personal page. These sites will give you a URL, store the content of your page and slap on some advertisements. Just like that, in an hour or two, your page is on the Web! ­


­But what if you want to take your site to the next level? If you have a content-driven Web site, how can you make money off your traffic? If you are an online merchant, how can you get people to your site to buy your products? One popular option that serves both of these functions is an affiliate program. In this article, we'll examine affiliate programs to find out what they are, how they work, who they are for and how you can use them to benefit your Web site. ­


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7 Ways to Make More Money on eBay

Making money on eBay requires consistent effort and attention to detail. Here is a great article with tips to help eBay sellers make more money on eBay. The article is by Sean Eyring from HammerTap. HammerTap is our recommended eBay research solution. At the end of the article is some information about HammerTap and how it can help eBay sellers make more money on eBay. Karen and I have been using HammerTap for the past six years with good results.

Make Your eBay Listings Get the Attention they Deserve
We've all been there. You visit a Web site looking for information.. You're bowled over with bright "circus" colors, animations going everywhere, and text that's hard to read.

The site almost begs you to click your browser's "back" button. Many eBay listings look the same way. If you want to make more money on eBay follow these tips.

eBay's "Create Your Listing" page makes it easy to use backgrounds, change text colors, add graphics, and so on. But the question is, does the look of the listing increase your chance to sell your product? Read on to learn when using eBay designs makes sense... and "cents."

"Branding" Yourself Online

Is there a time when consistency of appearance counts? Here's a quick mental exercise. Think of the Coca-Cola logo. What colors are used? If you thought red and white, their multi-million dollar branding campaigns did their job.

Why not blue and white? It doesn't matter, really. What matters is that they use red and white over and over to "brand" themselves into your mind. Put a Coke, a Pepsi and a Dr. Pepper at the bottom of a cooler filled with ice water. Even without being able to read the labels, if I want a Dr. Pepper, I reach for the dark red can.

Sure, ass an eBay seller you don't have the advertising budget of Coke or Pepsi. But you have one advantage. If you sell products on eBay, especially in any kind of specialty "niche" market, it's likely that many of the same people will see several of your listings. Here's where branding comes in.

Create a consistent and unique look for your eBay listings. Use the same background image if you choose to use one. Use the same text color and font. Create a unique "theme" and use it for all your listings.

Consistency Pays

What's the value of consistency? On eBay, people may fear buying from those they don't know. That's why eBay has their feedback system. It gives you some confidence in the person you're buying from.

If a person recognizes the "look" of your eBay listings, you increase your chances to sell to them. If an eBay buyer purchases from you and has a good experience, the next time they recognize one of your listings, you further increase your odds of selling to them. The more sales you make the more money you make on eBay.

Designing Your Unique "Look"

So now that you know the value of a consistent design, how do you create your own look? I'm an online marketing consultant. When I work with a client, the first question I ask is "Who is your audience?"

If you're mostly selling electronics, you probably don't want to go with a border with flowers and dolls. On the other hand, if you specialize in selling teddy bears and plush toys, this may fit your audience perfectly.

Think of your audience. Are they predominantly male or female? Is your product high-tech or high-touch in nature? Take a moment to write down what you know about potential buyers of your products. Keep this in mind when designing the look to use with your listings. But there are a few absolute do's and don'ts.

Absolute Design No-No's

Make your eBay listings easy to read. First of all, let's choose the text color and background. Use black on white or on another VERY light color. Never use light text on a dark background. Especially on older monitors, it can be too difficult to read.

Use a font size that's large enough to read easily. Stay away from small print that many readers will have to strain their eyes to read.

Use a "sans-serif" font like Arial or Verdanna. "Serif" fonts like Times New Roman are easy to read in print, which is why they're used in newspapers and novels. Studies have shown however, they are much harder to read on a monitor.

Composing Your eBay Listings for Maximum Effect

Studies have shown that any Web page (such as your eBay listing) has between 3 and 10 seconds to grab the interest of your reader. If you haven't made at least one "benefit" statement they connect to, chances are they're gone with a quick click of their browser's "back" button. And they're gone for good.

So how do you catch the attention of your audience in seconds? Simple. Put your best benefits at the top, and make them easy to read. Bullet points are great for that. Give short, to-the-point descriptions of why the reader should by your product.

Benefits vs. Features

I've read dozens of books on marketing. I'll save you a lot of reading. Here's the thing I've learned that's more important than any other. It's the value of clearly stating your product's benefits.

Let me illustrate the difference between two ads for computers, one based on features, the next based on benefits:

Features-based

3.0 Gigahertz Processor
256 Megabyte Video Card
350 Gigabyte Hard Drive
Benefits-based

Fast processor lets you get more done quicker
Powerful graphics card lets you play all the latest games
Roomy hard drive, so you can install all your programs and still have room for music and video
A feature describes an attribute of a product. A benefit tells why you should care. For example, stating a computer has 256 Megabytes of video RAM says nothing to the average computer user. It's a feature. But they may be purchasing the computer for someone who's really into the latest computer games. Many of these require a lot of video RAM.

Now we've turned the feature into a benefit by telling how that feature makes the product more valuable. Make sense? But one of the strangest things I see as a marketer is how even professionally produced advertisements costing thousands of dollars to create and sent out break this one simple rule.

Well there you have it. A quick Marketing 101 course as it applies to creating a winning "brand" for your auctions. We also described how to sell more often by focusing on benefits, rather than features.

Make the most of your auctions with research!

If you want to make more money on eBay, determining what works and what doesn't when it comes to your listings requires research. Anything less puts you at risk of not making the sale or not making as much as you could be on each sale. A research tool like HammerTap helps eBay sellers bypass the costly trial and error process by quickly giving them the key information they need for profitable online auctions.

Start making more money on eBay now: Take HammerTap for a FREE test drive? We'll give you 10 days to put HammerTap to work for you. Use its power to determine:

Successful Keywords
Best Auction Type For Your Products
Best Listing Duration
Which Listing Features Improve Your Chance to Sell and Which Increase the Closing Price
Optimal Start Price to Use
Best Day of the Week to Start and End Your Auctions
Seasonal Trends
And much more!
As a bonus, you'll receive a 10-lesson Power to Profit course to help you immediately see the effects research can have on your auctions. We'll also throw in selling tips from Industry Experts in our members-only Auctionography newsletter.