Affiliate marketing is simply the act of making a commission from selling other people s products. Instead of getting a retailer to carry your product, you find a product that you personally like, market it to others and then make a percentage of the sale for each sale you generate. The basic concept of affiliate marketing programs comes from revenue sharing.
In an affiliate program, you have two methods of payment. First, you can get paid in commissions. Second, you may be paid in a fixed amount called a flat fee. With these two payment methods, there are many positives and negatives. Let’s look at both of these to see how they affect your bottom line.
With commission based affiliate programs, like Commission Junction, you receive a commission when a sale is made. The great thing about this structure is that the affiliates do not have to store any product or have to write a single article. The commissions come in automatically from CCl and the website earns a fixed amount per sale. This is a great way to build lots of relationships with your list and build your business quickly.
The negatives with this setup are that new marketers can often get confused as to where their money is going. There are often only a few strong affiliate programs in an affiliate network. That means that new marketers have to compete against many more experienced marketers to earn any real money. There is no cap on the amount of income you can earn, so you can easily burn through your budget. So, for beginners and other marketers with less experience, this could potentially be a downfall.
On the other hand, Affiliate Marketing with Commission Junction has many positives. First, there is no inventory to manage. You don’t have to keep track of product availability and stock levels because the company handles everything. That frees up a lot of time for marketing the business goals of the marketers.
Another positive with Commission Junction is that it caters to both beginners and experienced marketers. Affiliate programs for beginners are often confusing, hard to navigate, and require a large up front investment. These programs are usually targeted towards people who have some form of expertise in a niche market. For these programs, the marketers typically don’t have to take on the extra responsibilities of inventory, fulfillment, or customer service.
The downsides to Affiliate Marketing with Commission Junction include some negative performance metrics. While the company does provide excellent support for marketers, the up front costs may scare off some would be entrepreneurs. Another negative aspect is the minimal support for the marketers. While most marketers have decent support through email and forum support, there aren’t any follow-up conversations with a technical support person.
Getting started in affiliate marketing can be an exciting, rewarding experience for the right candidate. Affiliate programs with Commission Junction are great places to start, but like anything else, you get what you pay for. Try looking for programs with lower start up costs and more support from the company. You will probably be happier with the results!
As affiliate partners are paid on a commission basis, it’s important that you understand exactly how commission earnings work. The affiliate partnership agreement provides several revenue streams for the affiliate program, including a recurring commission based on the sale of a product or service from your site, a performance-based commission based on the referral of other affiliates, and a fulfillment lab service. The commission is split between you and the affiliate partner. For most affiliate programs, this percentage is 10%. In some affiliate partnership agreements, it may be as low as a 1% commission.
When you join an affiliate program, you receive banner advertisements as well as text ads that encourage customers to visit the affiliate partner’s site. In addition to the advertising cost, you also have to pay for the selection of banners and links, as well as the creation and maintenance of the website. In order to generate sales, the merchant must have a website that contains relevant and usable content, as well as a great selection of products to sell. Merchants pay commission fees for every sale that results from a traffic driven by affiliate referrals. This additional value to a merchant includes things like:
The majority of ecommerce affiliate marketing programs provide revenue sharing opportunities for all affiliate members. You are only paid when a sale is made, whether it is a click through to the merchant’s site or a referral of another visitor to the site. Some affiliate marketing programs provide revenue share in conjunction with rewards programs. Others share revenue with a point system or with a combination of rewards and points. Depending on the program, you may also be paid a commission on purchases you make. It’s important to understand how the program works to maximize your earning potential.
There are no negatives associated with affiliate programs. However, you should carefully evaluate your needs and preferences. Some programs have more negatives than positives. Your personal preferences and goals will guide your decision as to which program will work best for you. The key is to understand all the positives and negatives to help you determine which affiliate network and program will work best for your needs.