Exactly what is affiliate marketing?
It is quite likely, that you would have come across agents’ offline whose primary purpose is usually to represent and sell products of other businesses. However, these agents are not necessarily employees of the businesses, for which products they represent. They are instead in ventures for themselves. These agents online are generally referred to as an affiliate. The value they add is a marketing spin hence the inference affiliate marketing. They promote several products from any individual business to their niche. Just like agents offline do, and they subsequently get paid commission on the product they promote.
The advantage of running an affiliate marketing business is that it is not necessary for you to even own a website to start profiting from your venture. Simply promote the web sites of businesses offering their products to your niche and you get paid per transaction. The boon for a business operating an affiliate program is that the cost of promoting and marketing their product is some worth passed onto the affiliate marketing. Obviously, there is always a part of the marketing cost, incurred by the business/vendor. This happens to be the nice commission paid out to the affiliate marketing.
A slight disadvantage of an affiliate marketing program to an affiliate marketing is the absence of control over the product or service, including its listing price, as well as the actual sales pitch used in selling the merchandise. However, this is countered by the fact, that it is one of the easiest ways to start and establish a profitable online business, and open up several opportunities, to the enterprising individual.
A profitable approach to affiliate marketing is to first decide on the niche or market you intend to market your offerings too. This is to make sure you are not leaving your goal of running a profitable business to chance. Once you have decided the best way to start developing your online business, through selecting a preferred niche. The next task is to consider building a list of customers from this niche. There is a classic axiom that states, “to make money on the internet, you should look for a list.” Well, I will paraphrase and say making money through your affiliate marketing business, requires targeted list. Get started immediately after selecting a niche.
Beyond building your list, you have to start developing a relationship with this list. Keep improving your understanding of what they need, and provide them solutions. Don’t start instantly with the aim of making money on-line via your list. This is most crude and counterproductive. Remember your list is made up of people, with feelings and demands, requiring solutions to their problems. Look to help them out. Start with providing them something of value which will get them some kind of result. It is really important to be of service to them, allow them to know you truly do care about their needs and you are here to help them.
It is proven, that the more your prospects come to know you are interested in them and their needs, the more likely they would want you to succeed online. They will choose you over others when searching for recommendations on products and services. They generally do this since they know you care. The outcome is they get their problems solved and you also make money providing them with valuable solutions.
To help show you how this business work in practice, I have outlined below a few of the methods in which your online business may get paid within affiliate marketing programs.
One Tier Affiliate Marketing Program
This is your standard affiliate setup I previously described. You get a commission on the actual sales you bring into the business. For example, a company provides an affiliate program for which affiliates get 70% commission. This implies if their product has a listing price of $300 you receive $210 as a commission for making a sale. This amount is all you get for the sale. A good amount these days, but nevertheless, that is all you will receive as commission.
Two Tier Affiliate Marketing Program
A Two-tier affiliate marketing program, however, pays commissions based upon two levels. It comes with a Multi-level or network marketing twist to it. You’re not only selling the main products, but also recruiting other affiliates to the company. Thus what happens is unlike the one-tier program where affiliates only get paid once for selling the products. With the two-tier programs, affiliates are given a commission for any sale they make and for each sale, their affiliate recruits make too. This provides an incentive for recruiting other affiliates into the program. If we revisit our previous example of $300 sale for the product if you made a sale, and the affiliate you recruited also made a sale, you naturally receiving your standard commission for the sales you made, but you will also receive a commission for the sales made by the affiliates you recruited.
Residual Affiliate Marketing Programs
It is important to revisit the fact, of picking the right niche for any business, is absolutely vital to success online. However, beyond this just like any business offline, businesses online could be unpredictable. The predictability I refer to here is in terms of its earnings, which is of most interest to anyone looking to run a business online.
However, there is a method of adding some consistency to your affiliate business that makes it less unpredictable. You can achieve consistency in your earning by promoting multiple affiliate programs that pay residual income. Such programs are usually stuff like membership sites affiliate marketing programs, newsletter subscription affiliate programs etc. The affiliate program pays you monthly, based on agreed commission for as long as the customer you bring in remains with the company. The more you obtain this kind of income for your affiliate business, the higher your reassurance and predictability within your business.
To summarize, in order to successfully run an affiliate marketing business, it is important for you to target a niche. Then drive traffic from your chosen niche to your website. Provide your prospects with value and acquire a list of your prospects. Then develop a relationship with them, which will ultimately lead to you maximizing profits for your business.