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Affiliate Marketing as a Sales Channel

For an online retailer, affiliate marketing can be a fantastic sales channel. A large part of your success is determined by the products you sell and how well you pay your affiliates



What is affiliate marketing?


The basic premise is that you allow others to market your products and send traffic to your website. In exchange, you pay them a percentage of any sales generated by their efforts.


This is usually accomplished by providing them with unique hyperlinks to post on their website. These hyperlinks typically include an ID code that allows them to be tracked. An affiliate hyperlink might look something like this:


http://myonlineretailwebsite.com/blue-widgets/?affiliate-id=123456


In this instance, a blogger might include this link on their blog in an effort to entice readers to visit your "blue widget" page and make an appropriate purchase. Affiliate tracking software will typically( depending on the system you are using) automatically pay your affiliate a portion of the sale if the visitor who clicks on this link makes an actual purchase.


Getting started with affiliate marketing?


At first glance, it appears to be the answer to every online retailer's dream: allow anyone in the world to market your products in exchange for a percentage of the sales. You can't lose with enough volume. The truth is that affiliate marketing has some thorny issues, so you really have to align your stars perfectly to make it work.



You'll need to do some math to determine how much of your income you can afford to give up to pursue affiliate marketing. Can you give up 5% of the total revenue generated by a sale? What about ten percent? In general, the higher the percentage, the more affiliate traffic you will receive.


You might want to increase your prices to give affiliate marketers a margin of profit if you're really interested in starting an affiliate program.


How to sign up for a network of affiliate marketers


Joining an affiliate marketing network like Commission Junction is the simplest thing to do. They offer a marketplace where other affiliate marketers can promote your affiliate program. To save you from having to create your own tracking system, they also offer the tracking software for your affiliates.



This is better in some ways because it resolves the trust issues. Whether or not they are being given credit for the sales they make, affiliates are constantly suspicious. The worry of being cheated is reduced by having an intermediary handle transaction tracking and payments.


Affiliate networks may also take a percentage of your sales or charge a fee to use their network. You must consider whether you can afford this additional expense.


Constructing your own tracking system


You can create your own tracking system if you do not want to use an affiliate network. There are several apps, for example, that you can use to launch your own affiliate marketing program. It's up to you to promote your program effectively enough to attract affiliate marketers.



Independent and homegrown affiliate marketing programs that are trustworthy and pay well have a lot to offer. You may find that news will spread quickly about your program and attract hungry affiliate marketers who appreciate the high payouts and less "red-tape".


The justification for affiliate sales generosity


Giving larger percentages to your affiliates may be found to be equivalent to spending the same amount on advertising if you consider how much you spend on it. Additionally, keep in mind that affiliates bring you new customers in addition to sales.


Consider how much one customer will earn over the course of your relationship with them. Getting that customer is worth the upfront investment.


Finally, if you have a large network of affiliates who are referring you because of your generosity, your daily income could increase significantly. To determine the types of scenarios affiliate marketing will offer, it is crucial to perform the necessary math. So get out a spreadsheet and see if affiliate marketing will be the blast your online business has been waiting for.



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