One of the great things about making money online is that you really don’t need to create a product of your own in order to get started. There are plenty of people out there who have a product of their own. And they are willing and ready to pay you a sales commission by simply referring them a sale. When you are making money in this way, you are called an “affiliate”.
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To some, this may sound synonymous to being a used car salesman. Try not to think of it that way, though. What this comes down to is that all important factor I mentioned earlier – eyeballs. If you can bring in the people, you are providing value. Product creators want that attention and are not only willing to pay you for it, but are usually anxious to do so. The sales commissions offered depend highly on the nature of the product. For example, a company like Newegg.com is going to offer very low sales commissions. Their business is computer hardware. The markup on hardware is fairly puny as it is, so Newegg simply can’t afford to pay a high sales commission. However, people selling information products can offer much higher commission rates because their product is fully digital. Their profit margin is essentially 100%, which means they can pay you 50% commission or higher and they are still making a profit. This, of course, also means you are making more money.
Getting Started
People new to this would get started by joining the affiliate programs of sites offering products you would be interested in selling. You can find affiliate programs through a couple of different means:
- Individual sites usually have information on their own affiliate programs. Look for a link to their affiliate program page. It is usually found at the bottom of the page.
- If you don’t have time to hunt one-by-one for affiliate programs, then set up an account with one or more of the big affiliate networks. These networks serve as “one stop shops” for all kinds of affiliate offers. You would simply find the products you are interested in and begin marketing them. More below on this…
Here is a list of affiliate networks you can check out to get started:
- Clickbank
- Commission Junction
- GoldenCan
- AzoogleAds
- OneNetworkDirect
- CX Digital Media (formerly Incentaclick)
- LinkShare
- ESellerRate
The method of getting started varies depending on the network you are working with. For example, Clickbank allows anybody to sell anything they want in the database and make a commission. Networks who carry larger, more reputable suppliers (like OneNetworkDirect) sometimes require you to apply to a particular program before you can make commissions.
In either case, the end result is that you will get access to any promotional materials available on the product you are selling. You will also get a special affiliate link which you will need to use to refer anybody to the product. To demonstrate, here is my own personal affiliate link to sell a product called “Ultimate Troubleshooter” on PCMech.com:
http://store.esellerate.net/a.asp?c=0_SKU1986144800_AFL7456190010&at=
What is happening here is that a long value is passed along to Esellerrate.com. When they see that ID number, they know that this person came from PCMech.com. If that person buys “Ultimate Troubleshooter”, they will credit me with the sales commission. Every network has different structures for their affiliate links, but the most important thing to remember is that all people you send to the site use YOUR affiliate link. This way you will earn that sales commission should they buy the product.
Joint Venture Partnerships
If you are just getting started with internet marketing and selling affiliate products, then you are not yet up to a point to partake in joint venture partnerships. For the sake of looking ahead, though, let’s go over what it is.
A joint venture (JV) is a partnership where you agree to combine resources with other people in the field to mutually promote products and make money. Usually, a JV deal is dependent on bringing something valuable to the table, such as traffic or a large mailing list. If you have nothing valuable, you are not going to be an attractive candidate for a JV deal.
So, let’s say person A has a mailing list and person B has a mailing list. Both also have websites. Both are selling something. The typical JV deal would look like this:
- Person A approaches Person B about a potential JV deal. Person A offers, say, 50% sales commission on any referred sales that Person B can bring in by way of promoting to his mailing list.
- Person B agrees and promotes Person A’s product on his mailing list. He earns sales commissions on any referred sales.
- It could end there, or it could be a trade. Person B later wants to promote to Person A’s mailing list. The same process is repeated.
JV partnerships usually result in much higher sales commissions than more standard affiliate programs. JV deals are individually negotiated whereas standard affiliate programs are the same for everybody involved. The power players in this field are very active in JV deals as they can bring in much more money than you would otherwise make.
For much more information on scoring JV partnerships, look at our course here in PCMech EDU:
Joint Ventures – How To Use Them to Make Serious Money Online
How The Big Players Do This
Aside from JV deals, the real difference between making seldom, random sales and real money usually comes down to sheer numbers. And sheer numbers are usually scored through advertising. Serious affiliate marketers will typically make use of pay-per-click advertising in search engines, for example, to rake in sales leads. In fact, they usually throw every marketing method in the book at these products, marketing the affiliate products just as they would their own products.
But, you have to PAY for advertising, right? Yes.
Affiliate marketing taken to the larger scale is all about numbers. For example, if you knew that every referred sale was going to result in $20 net profit to you, you could use this number to calculate costs that you could take on to bring in that $20. The figures you arrive at depend on conversion rate and the cost you have to pay to get the person to your website to begin with.
For example, let’s say you make $20 on every sale on a product having to do with golfing. You do your research and find a series of search keywords people will search for to find a product such as this one. You find out that Google Adwords is charging, say, 5 cents for every click-through when using PPC advertising (the rate varies depending on the keyword). You also know, from your site statistics, that about 10% of the people who come to your site end up buying your product. For $20, you could afford to send 400 people to your website. If 10% of those 400 convert to a sale, that’s 40 sales. That would make you $800 in sales commissions.
Now, these numbers are obviously VERY good and you are not likely to see this kind of radical return on investment in real life. In some cases, perhaps you will. However, the average conversion rate for a website industry-wide is usually more like 2% or 3%. In the above example, 400 visitors would net you 12 sales. This is still pretty good. If the search terms you are using cost more than 5 cents per click, then you would need to factor this in as well.
As you can see, you work the numbers and find a profitable setup. Once you find that setup, you can ramp up the activity by many, many times. In the above example with a 3% conversion rate, it was assumed that you were spending $20 in advertising costs. Now, what if you increased this to a very large number? For example, let’s say you are spending a whopping $1,000 per day in advertising. If you are paying 5 cents per click and getting a 3% conversion rate, you would make approximately 600 sales per day. That’s $12,000 in sales commissions! Now, even if the numbers are not quite as favorable, you can see that once you make the numbers work to result in a net profit, you can ramp up the daily budget in advertising and generate signficant profit. All selling somebody else’s product!
Also, affiliates that do this are in a much better position to negotiate a special, higher commission rate because of the proven success in driving sales.
Obviously, it takes money to make money when doing it this way. But, I would spend $1,000 to make in order to make $12,000 and I’m sure you would, too.
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