The temptation for most people when they realise the number of affiliates programs and business opportunities on the net is to jump in with both feet and join programs left right and centre. A far better course of action is to choose one or two quality programs and concentrate on building an income from these before adding others to your portfolio.
What qualities should you look for in a program and which ones give you a good chance of making a sustainable income? Below are Azam Marketing's top ten tips on evaluating merchants and their programs.
1. Is it completely free to join?
Most get-rich-quick scams will fail this test. They usually require a sign-up or monthly investment and work by transferring money from the majorities to the minorities. The old saying of early bird catches the worms applies here. Those who join the program early will make money from those who join at a later stage. In a finite population, if someone makes $50,000 from this program, 1000 people stand to lose $50 each.
Legitimate businesses usually do not ask people to work for them, although there are exceptions. Unlike companies which generate most of their revenue from recruiting other affiliates and agents, legitimate enterprises make their money from selling tangible products or providing value-added services.
Azam Marketing recommends MLM business opportunities on a rare basis, but they are always completely free to join and run. We spend countless weeks researching each oppportunity and ensure it passes our stringent criteria before mentioning it on this portal. For example, we make sure that not only is it completely free to join, but it has been in business for at least five years and the company is generating a bona fide profit from selling products and services (rather than building a downline). We reject 99% of business opportunities we investigate.
2. How much commission does the merchant pay?
This may seem obvious, but the amount of commission you earn per sale is critical. There is no point in spending time and money promoting a product that doesn't pay well. You could end up spending more on marketing than you are likely to make on sales. It is probably best to stick with marketing products with a high commission value unless you have found a niche market where you can sell vast quantities of product, and make substantial commissions on your volume of sales.
The profit margin many merchants make on items is as high as 60% to 80% and paying affiliates 10% commission in such cases is not on. A merchant selling a t-shirt for $15 may have acquired from it a sweatshop in China for 30 cents. His mark-up is massive and offering the person who generates the sale, the hard-working affiliate, $1 or $1.50 in such a scenario is not a fair share of the profit. Would you sprint down to the mall to sell t-shirts if somebody offered to pay you $1 for each one sold? Would you set up a DVD store if somebody offered you 70 cents for each one you flogged - two months later? If not, then why do it online?
We passionately believe that affiliates deserve the highest commissions possible and that's why we at Azam Marketing ensure the programs we manage pay the most lucrative rates possible in their sectors. For instance, Purple Parking offers 5-15% commission on airport parking, twice as high as many others, and the V A C Media white-label cashback opportunity gives affiliates a massive 50% revenue share on a lifetime commission basis.
Don't get sucked in by advertisers who claim their brand value leads to higher conversion rates and compensates for miserly commmission rates. Having a big, reputable brand can result in superior conversion rates, but this is not always the case.
An experiment done by one of the UK's top affiliates, Kieron Donoghue, in February 2006 demonstrated how, despite their claims, brand name advertisers can convert worse than non-brand ones. Not only were the likes of Tesco and Marks & Spencer paying 2% and 3% commission on Valentine flowers, but they were weaker at converting traffic than less well-known merchants such as Bunches and Flowers Direct who were paying 10% and 15%:
Tesco Flowers - 11% conversion rate - 31 sales - £21.04 commission
Bunches - 16% conversion rate - 35 sales - £98.54 commission
As Kieron comments: "Kind of puts paid to the 'brand' argument doesn't it? So not only have I made more sales with the 'no-brand' Bunches, but I've also made 4 times the commission and it converts a lot better too."
3. How relevant is the merchant to your site?
You probably won't make much money if you market affiliate programs that don't have much to do with your site. A lot of novice webmasters join a whole bunch of affiliate programs and figure that if enough of them pay off they'll make a buckload of money. They'll probably actually end up canceling each other out: the affiliate site will just look like a huge advertisement. Your main assets as a content website is your content, your traffic and your knowledge of that traffic, so it's a much better strategy to use the information you have and pick affiliate programs that would best serve your visitors and best supplement your content. If the programs you choose match the content of your site, it should be fairly easy to lead your visitors to participate in them. If you've reviewed a DVD on your site, for example, you could simply link to the page selling that DVD on an online movie store's site. This is an excellent way both to serve your visitors and to make money off your website's traffic.
4. How much traffic is the merchant's website getting?
Try to discover the amount of traffic the merchant's website is already receiving. Alexa.com could be a useful tool for doing this research. If the website is ranked in the top 100,000, the merchant is getting a signficant amount of traffic and there may already be too many affiliates. If it is ranked below 500,000 it is either no good or it could just be a golden opportunity to make some real money.
Always research a merchant's product if their website has a low traffic ranking. It may be a good idea to buy the product yourself if you can afford to. Otherwise you could do a search to find out if there are any adverse comments about it on the internet. If all is well and the product is good, you may have found a gold mine!
5. Will they serve your appetite for cookies?
How long is the merchant's cookie period? Many customers do not buy on their first visit to a merchant's website. It is important therefore that the merchant provides a reasonable cookie period for their affiliate program so that you get credit if the customer returns and buys at a later date. Check out how long the cookies last. The longer the cookies lasts; the better the chances of you getting paid. (Even better than merchants who pay within a long cookie period are those who pay you for life. See point 7 below.)
6. Does the merchant track non-cookie sales?
Cookies are not always a reliable method of tracking sales back to affiliates. People often delete them or have cookies turned off in their browser; they may use a different computer from when they first clicked through to a merchant. Quite a few networks such as Affiliate Window, AffiliateFuture and Paid on Results UK track a sale even if cookies are turned off and some networks and advertisers pay you even if a customer signs-up on the phone. In terms of paying affiliates for repeat purchases, some merchants employ database-tracking. This tags a customer to an affiliate when he or she makes a purchase or opens an account at the merchant's site. You then get paid on future purchases, no matter which computer the customer logs in from and whether the original cookie has been deleted or not.
7. Does the merchant pay lifetime commmission?
Very few businesses can survive just on generating new customers each time. Yet the way most affiliate programs are structured, you earn commission for sending a customer to a merchant's site and then, even though the customer is added to the store's mailing list, is constantly bombared with emails promoting 'special offers' and is likely to shop with them again and again, you'll only ever get paid on the first purchase. In exchange for gifting you a measily dollar or two, a merchant has sometimes gained a customer for years to come! (Now do you understand why every merchant from Toronto to Tasmania is jumping on the pay-once affiliate marketing bandwagon?) Affiliate programs paying just on the first sale are grossly unfair and should be generally avoided.
There are very many reputable affiliate programs and business opportunities which pay commission for each and every purchase your customer makes on their site for life.
8. Does the merchant have a dedicated affiliate manager?
Most merchants don't bother invest in a full-time in-house staff member or external network or agency staff to manage their affiliate program. Try to avoid these companies unless their commission rates are exceptionally high. The reason is that, when problems occur - which they often do in cyberspace - it can be nigh possible to get things resolved. As Brad Wilson, a Houston-based affiliate with five niche travel sites told us: "Your email will get passed on from person to person in the company and may never get responded to. It is unlikely general staff will know what an affiliate program is nevermind have the time, skill, know-how or enthusiasm to fix tracking issues or advise you on deep-linking changes".
9. What marketing materials and linking options does the affiliate program offer?
Look at the type and quality of the marketing resources they provide. Make sure banners have strong call-to-action messages and have not been created to promote the merchant's name or URL. Do they provide well-written text copy and dynamically-updated creative that promotes seasonal campaigns? Do they provide coupon codes and easy-to-use product feeds and deep-linking methods for affiliates? Are they willing to put together creative specifically for their online sales team i.e. their affiliates? If the marketing material and linking options they provide is good then it demonstrates they are serious about affiliate marketing.
10. How well do they convert?
One of the advantages of certain affiliate networks such as Commission Junction is they provide conversion metrics. You can see which merchants are great at converting visitors to sales/leads and which ones are not so good. As most affiliate programs only pay if a visitor becomes a customer, how well a site converts is critical.
If a network does not publish conversion rates because a merchant has just joined them, then be smart and wait a while. Let dumber affiliates spend their precious money on determining whether the merchant converts or not. When the metrics are eventually released, you will be able to determine whether you are going to plaster their links over your sites or not.
If conversion statistics are not provided, then email the Affiliate Manager and ask for them: many of them are surprisingly forthcoming. You can also try asking other affiliates on discussion boards. If you can't get hold of conversion metrics then you could be throwing your hard-won traffic at a merchant for nothing in return. Unless there is an exceptional reason and/or a merchant is willing to pay CPC/CPM rates on top of the CPA, try to find someone that does provide this critical data.
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