What is Affiliate Marketing anyway? And how do I set up an affiliate program for my online store?

What is Affiliate Marketing Anyway?

Affiliate Marketing connects your online business with a group of people on the Web known as Affiliate Publishers. Affiliate Marketing is a Pay For Performance relationship between you the Merchant and many Affiliate Publishers who publish links on their Websites. These Affiliate Publishers (and there are a lot of them) want your online business to succeed because when they drive sales to your site, they will make a small commission. This is why it is called pay for performance - if the Affiliate Publishers don't make any sales - you don't pay them a cent! Affiliate Marketing is an excellent way to extend or expand your brand.

How does it work?

It is really quite simple. Affiliate Publishers sign up for your program; you approve or disapprove them; they publish the links (called Creatives) that you create and then they will start to send you targeted traffic. (Targeted traffic = Customers that are interested in what you are selling) When this traffic converts (buys something), the Affiliate Publisher's account is credited with a small commission (that you determine) based on the purchase amount. If you are using an Affiliate Broker they will usually take a small commission on the Affiliate Publisher's commission. If the goods are returned or there is a problem with the sale (called a reversal) you will not have to pay any commissions (no sale - no commission).

Why should I use an Affiliate Broker?

The key to the Affiliate relationship is the system that keeps track of the Affiliate traffic (customers) that is directed to your online store and the sales that result from this traffic. Some larger companies run "in-house" affiliate programs. The trouble with running your own in-house Affiliate Program is that it is costly, time consuming and there is always the question of transparency (are you cheating your Affiliate Publishers). The easiest way to set up you own Affiliate Marketing Program for your online store is to use an Affiliate Broker.

The role of the Affiliate Broker is to act as an impartial service network that, simply put, provides quality Merchants for Affiliate Publishers and quality Affiliate traffic (customers) to online Merchants. The Affiliate Broker Network should provide transparency to both Merchants and Affiliate Publishers and remove any questions about cheating or unethical behavior on anyone's part. There are many Affiliate Broker Networks out there and they are not all the same. Some are very expensive. Some are very affordable. Some Affiliate Networks have problems with parasites that steal money from the Affiliates. Be careful when you select your Affiliate Broker Network!

What should I look for in an Affiliate Broker?

First of all, an Affiliate Broker Network should suit your budget. Unless you are a major national or international brand, you probably do not have thousands of dollars to spend on an Affiliate program. Rest assured - there are quality networks out there that are very affordable. Look for an Affiliate Broker with low fees for the initial sign-up as well as reasonable commission fees per sale.

A good Affiliate Broker Network should have a spotless reputation with both Merchant and Affiliates. The better regarded the network - the better the Affiliate Publishers it will attract. One way to find out what people are saying is to visit the Abestweb.com forum. This is one of the most respected meeting places on the Web for the Affiliate Marketing Community.

Make sure that the Affiliate Broker Network is Parasite free. Parasites are "black hat" groups or individuals that come up with cleaver ways to trick the Affiliate Networks so the black hat gets paid commission for sales that they aren't entitled to.

Find an Affiliate Broker with good, responsive service. Where technology is involved - problems will occasionally crop up - how an Affiliate Network responds to these problems is important. Again, read a few of the posts at abest.com and you will quickly see which Affiliate Networks are most respected in by the Affiliate community.

Is this Multi-Level Marketing (MLM)?

Absolutely Not!

Affiliate Marketing is very different from MLM because any one of your Affiliate Partners can make as much money as they want without having to recruit "re-sellers". All they need is hard work in building up the traffic to their sites. There are a diverse range of Affiliate sites and marketing styles on the Web today that include product reviews, blogs, personal websites, community websites, content sites - the list goes on and on...

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