This is your business not your marriage Keep your options open
Fortunately, not many affiliate programs have exclusivity clauses nowadays. But do be aware that they do exist, so keep your eyes open for them.
8. What is the Program Type? There are essentially three types of affiliate programs: pay-per-sale, pay-per-lead, and pay-per-click.
Pay-Per-Sale programs are also known as Partnership and Percentage Partners programs. These programs pay either a fixed dollar amount or a percentage of sales generated by your links.
In Pay-Per-Lead programs, you earn a set amount whenever your customer fills out a survey or requests a quote or some information.
Pay-Per-Click affiliate programs are similar to Pay-Per-Lead. Essentially you are paid each time one of your visitors clicks on the link through to that program's site.
As Pay-Per-Lead and Pay-Per-Click programs require huge volumes of traffic to generate serious revenue, I prefer Pay-Per-Sale programs because they are performance based. Doing business as an affiliate is about giving your visitors valuable information so they can make good product choices. Sending huge quantities of traffic to a merchant site so they can collect email addresses and spam large groups of people is valuable only to the merchant.
Target a market effectively, give them what they want, and you'll be rewarded handsomely with a percentage of the sale!
9. What is the Commission Rate? This is a VERY important question! It's not the MOST important, but it is close! ©
It's absolutely essential that you understand commission structures and compare payout rates between affiliate programs. This will affect to what extent you promote individual products.
Let's look at some real examples. Let's say you want to build a site around credit cards, in which you get paid a commission each time someone fills in an application.
First you'd search advertisers and products at Commission Junction, by inputting the word 'credit cards' into their search box.
You then sort the results according to payout per lead, from highest to lowest amounts, by selecting 'Lead' at the top of the column. When you click on 'Sale', advertisers are sorted according to payout per sale, from highest to lowest.
Here are just a few examples of what I found during a quick search.
Citibank Business Cards - Citibank will pay you $5.00 when a customer completes an application for a CitiBusiness Rewards or Platinum Select card.
Discover Card - Commissions start at: $25 per approved Platinum Card Account $25 per approved Affinity Card Account $25 per approved Titanium Card Account $15 per approved Student Card Account
First USA/Bank One - Offers a wide variety of credit card products including airline and travel rewards to exclusive co-brand card products. Commissions start at $30.00 and go all the way up to $50 per approved credit card.
What a variety of commission structures and payout amounts amongst these merchants!
As you can see, it's very important to investigate each merchant's program very carefully before applying to join.
It would be a real disappointment to heavily promote the First USA/Bank One program, thinking that you are paid $50.00 per application, when in fact the applicant has to be approved before you are credited with the lead.
Compare that to the Citibank structure which only requires the visitor to complete the application.
As a rough guideline, look first for companies that pay the highest per sale and per lead commissions in your category of interest. Once you've established a short list, then you can start weeding out those that don't make the grade.
10. Do I Get Credit for Recurring Sales? What happens when you stop promoting your merchant partners' sites? In most cases, you'd simply stop earning. Your income would stop and the checks would stop coming.
Because your income is limited by the number of customers you send to the merchant in a given month, you have to keep marketing your site to bring in new customers. Over, and over, and over again.
Make a sale, get paid and that's it. Your customer may buy more of the same product from your merchant partner, but you only get credit for the first sale.
The merchant benefits indefinitely from your introduction of the customer to the product, and you get only one credit?
Does that sound fair?
You bet it's not!
However, there ARE affiliate programs that pay commissions on all recurring charges, such as monthly newsletter subscriptions and web hosting packages. As long as your customer keeps ordering the product, you get residual commissions that keep coming in month after month, after you made the initial sale.
So, here's the bottom line. If the affiliate program doesn't pay residual commissions on recurring charges, you're losing money.
11. Does the Program Pay Lifetime Commissions? There is a difference between 'recurring' or 'residual' commissions, and 'lifetime' commissions.
A program paying residual commissions pays you every time the customer renews their subscription to a specific product.
A program paying lifetime commissions pays the affiliate a commission for each and every product that the customer buys from that merchant, including residual commissions, if applicable.
For example, let's say that you are earning recurring commissions on Mr. Samson's web hosting subscription at Best Host Company.
If the company doesn't offer 'lifetime commissions' and Mr. Samson upgrades to his own dedicated server at Best Host Company; you won't get paid commissions on his monthly server fees because it's a different product.
If XYZ Company offers 'lifetime' commissions however, the customer you refer to them is "yours" for life, regardless of which Best Host Company's products they buy. In the scenario above, you would be paid a monthly commission on the dedicated server fees for as long as Mr. Brown remains a subscriber.
Joining programs that offer residual or lifetime commissions is an excellent way to build a steadily increasing income. Once you make a referral, the checks keep coming in. So even when you take a vacation from your affiliate business, the checks for your residuals, will also keep coming in.
How many other businesses pay you to take a vacation?
12. Is the Program 2-Tier? Another way to increase your affiliate income is to take advantage of '2-tier' affiliate programs.
A "two-tier" program is one that offers two sources of income, the first for bringing in business, and the second for recommending new affiliates. Some programs pay a fee for each new affiliate that joins the program, while some others pay a percentage of the 2nd tier affiliate's earnings. Other programs pay in both situations.
When the subject of 2-tier programs comes up, the question often arises as to whether two-tier affiliate programs are MLM (multi-level marketing) schemes.
Well, let's take a look at a definition of 'MLM'.
"Also known as network marketing, MLM is essentially any business where payouts occur at two or more levels. For example, any company that compensates you for the sales you make, and also pays you a small percentage of the sales made by those you've recruited as sellers, is an MLM company."
According to that definition, 2-tier affiliate programs are MLM programs.
Does it matter? Should it matter?
Don't let the MLM association scare you or put you off. There are many reputable MLM organizations including Avon, Mary Kay Cosmetics and PartyLite Gifts, Inc.
MLM gets its bad reputation from companies that focus only on recruiting new members and downline-building. Essentially the only 'products' these companies sell are memberships, which you must purchase in order to be eligible to build your own downline of members.
Your primary concern is whether the company you sign up with is selling real goods and/or services that benefit its customers.
Focus first on marketing the product, and secondly on recruiting affiliates. That's why it's called 2-tier.
13. Are Cookies Used to Track Sales? A cookie is coded piece of information, stored on a computer that identifies that computer during the current and subsequent visits to a web site.
You may have heard that it takes 7 exposures to a product before people feel comfortable to buy that product. So what happens if a visitor from your site clicks through to your affiliated merchant site today but doesn't buy anything until a week later? Will you still get credit for the sale?
Well, that depends on the duration of the 'cookies'.
Cookies are text files that cannot be used in any way to harm you or your computer. Some people worry about viruses and such, while there is no need with cookies!
You can take a look at the cookies stored on your own computer.
For example, if you visit http://iwantu.com from my dating service review site at http://sage-hearts.com, and you have a PC, the cookie stored on your computer will be called [email protected] and look something like this:
BIGipServerhttp_p00l#855746752.20480.0000#dating.iwantu.C0m/#i024#i70 i85792029540480#i283039984#29540i96#*
Coding in each cookie includes: o The use of the cookie.
o Specific data e.g. affiliate ID or banner image filename. o Where the cookie can be read from.
Continue reading here: Merchant Copy and Sales Tools
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