Business Emergence: The Business of Affiliate Programs

As promised, I wished to talk about the fundamentals of affiliate programs and to further state why I chose to pursue this particular business model. As I state previously:

"Basically being an affiliate means that you never have to deal with customers; never have to sell or ship products; and never have to call people or coerce others into joining anything."

The basic premise is that the affiliate is compensated by the merchant for each visitor/customer directed to the merchant by the affiliate's marketing efforts. I could say it another way. Affiliate marketing is an internet-based marketing practice in which the affiliate markets the products of other businesses in return for compensation when traffic is driven from the affiliate's efforts to the business.

Compensation occurs when a customer performs a conversion. Conversion criteria are provided to the affiliate by the merchant. There are a few typical forms of customer conversions, CPA, CPL, and CPS.

(CPA) -- Cost Per Action conversions are typically achieved when a customer is directed to a merchants site and fills out a short form, such as an application, or provides as little information as a zip code, email address, or even create a free account.

(CPL) -- Cost Per Lead conversions are similar to CPA conversions but requires the customer to do a little more. For example: A customer signs up for a free credit report.

(CPS) -- Cost Per Sale conversions are pretty straightforward. The merchant pays per sale, via either a flat fee, or a percentage of the sale.

There are a couple of ways to break into the business of affiliate marketing. One such way is personally going to each company/business that offers affiliate programs, signing up for, and be approved by each of them. Another way is to buy into an already established affiliate network. I chose to buy into a couple of networks. One was financial based, in the areas of credit and personal finance, while the other contains direct sales/deals items like, "As seen on TV" products, health and fitness products, and so on. I chose these networks based on the demand for the products and services within the network. The second criteria for me when it comes to choosing a network is simply, if I could believe in the products being offered, or at the very least see them as needed and positive.

In my particular case, access to the network also came with the affiliate websites. Coming this far is really most of the leg work in getting things setup. This left me with only one task, and that task was to drive traffic to my affiliate website. The websites contain links to a multitude of merchant products, offers, free trials, and the like. The initial charge in driving traffic to the websites took the form of CPC/CPM marketing through the main search engine providers, namely Yahoo, and Google. I will go into the various marketing aspects in the next post. I will say this however... my first effort yielded a nice income. It honestly gave me faith in what I have plunged myself into. Money to reinvest back into the business itself and motivation to multiply these initial earnings.

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