The Truth About Affiliate Programs

The Truth About Affiliate Programs

© 2002 Elena Fawkner

Affiliate programs are a brilliant idea. For the owner of
the product, they're a way of recruiting a veritable army
of salespeople to promote your product without having to
pay them a dime unless and until they generate a sale.
For the affiliate, they're a great way of earning extra
cash from an existing, high-traffic website with virtually
zero additional effort.

Only problem is, most affiliates don't HAVE an existing,
high-traffic website and they're suckered into thinking that
it's a simple matter of signing up for an affiliate program
and "driving traffic" to the product owner's site using a
uniquely-coded URL. Well, it IS that simple. And it isn't.

If you don't already have your own high-traffic website,
how do you think you're going to drive traffic to the
product owner's site in the hope of generating a sale?

Well, there are a few ways, actually. And all of them are
going to cost you either time or money.

First off, you're going to have to spend money on
advertising. How much? Well, consider this. Estimates
vary but, roughly, only 2-4% of people who see your ad
will actually click on your link. Of that 2-4%, only 1% or
so of THEM will go on to buy. In addition, it takes, on
average, 7 or 8 exposures to your ad before people will
click on it. AND to achieve even these piddly numbers
your market must be targeted in the first place. This is,
as you can see, nothing but a numbers game. Pure and
simple.

So what does all this mean to you, the advertiser without
a website? Well, to start with you're going to want to
advertise where a LOT of people are going to see your ad.
But not just ANY people. People interested in the product
you're wanting to sell - your target market. So this cuts
out the free classifieds and FFAs. And it means you're
going to have to spend advertising dollars.

Where do you go to advertise then? The most effective
form of advertising is in ezines. Take mine, for example.
At the time of writing, my subscriber database is around
14,000. Each week I run an ad for my own opportunity (in
addition to running ads from other paying advertisers). I
generally get about 500 click-throughs over the course of
the 2 or 3 days following publication. That's a click-through
rate of about 3.6%, about in line with the average.

If you were to pay to advertise in my ezine, it would cost
you $70 for a single classified based on my $5 CPM ($5 per
every 1,000 subscribers) pricing formula. This is not an
uncommon formula for pricing ezine advertising. You're
therefore paying around 14 cents per click. That's not bad.

Other than that, what can you do? Well, you can choose
to spend time rather than money. An obvious choice
considering what I've just said is to start your OWN ezine.

Build your own list and over time you will have a large
subscriber database to put your ad in front of too ...
and it won't cost you a dime. But this takes time and it
takes work. It's taken me two and a half years to build
a list of 14,000 subscribers. And it takes a few hours of
work to put together the ezine itself including writing the
feature article. Every week, week in, week out. Is it worth
it? Absolutely.

And once you're publishing your own ezine, it's a simple
enough matter to distribute your articles for other ezine
publishers to run in their ezines. That 4 or 5 liner at the
end telling readers who you are with a link to your website
(or, if you don't have one, the website of the owner of
the product you're selling) is effectively free advertising
for you. Not all publishers accept article submissions
though, so be sure to find out whether they do before
submitting your articles to them.

But think about this. If you're doing all this work anyway,
doesn't it make sense to create your OWN website (in
addition to your ezine)? Sure it takes time and it takes
work and it takes money (but not a lot - hosting fees can
be pretty cheap if you know where to go). But once it's
done and you're just in maintenance mode - adding fresh
content every few days, uploading your latest ezine and
maintaining your archives - your website does so much
of the work for you. Generate a few hundred unique
visitors a day and you can be getting the same click-
through rate to your affiliate site *for nothing* that you
were paying someone else 14 cents a click for. EVERY
SINGLE DAY. 24/7/365.

So, this is the truth about affiliate programs. They're great
if you're the product owner and they're great if you can
link to your affiliate site from your own high-traffic site.
But if you don't have your own site, you're going to have to
buy traffic to your affiliate site - either with money, time or
both. How many sales are you going to have to generate
to earn enough commission to more than cover your time and
costs and leave you with a profit?

Bottom line? Setting out to make money with affiliate
programs before you have your own site in place is putting
the cart before the horse. Yes, you want to make money
and you want to do it quickly. But it just doesn't work that
way. Not with affiliate programs, anyway. So adjust
your expectations and do first steps first. It will be slow
going to start. It will take you weeks to create a worthwhile
site and then MONTHS to generate the kind of traffic you
need. But if you take a long-term approach to your
business and take the time now to lay the proper foundation,
you'll reap the dividends for years to come.

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Elena Fawkner is editor of A Home-Based Business Online ...
practical home business ideas for the work-from-home
entrepreneur. http://www.ahbbo.com
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ABOUT THE AUTHOR
Elena Fawkner, a lawyer by training, has recently relocated to
Los Angeles from her native Melbourne, Australia. Before her
move, Elena worked full-time as a corporate lawyer in Australia
and has been running "A Home-Based Business Online", her
online business dedicated to work-from-home entrepreneurs,
part-time since July 1999.