Affiliate marketing is a way to earn money by earning commissions on product sales. The affiliate marketing approach is attractive if you want to offer products to the public, but you don't want to handle order fullfillment, shipping, warehousing, keeping an inventory, etc. Generally the way it works is you pick some product or a company, put a link to that product or company on a web page, and then somehow get traffic to arrive on that page. Some percentage of that traffic will buy the product. Each purchaser that goes through your link will earn you a commission.
In other words, your readers activities will end up paying you some money. The money is commissions, because you will have referred them to buying a product. What the merchant is paying for are those referrels.
the important measurements to look for are:
Your visitor rate
Percentage of your visitors that head to the merchant site
Conversion rate = # your merchant referrels who buy / # merchant referrels you make
Commission = # sales made X commission on each sale
Commission rate = % of sale price that goes to you
In other words, the more visitors your site gets, the higher the final commission. But the effectiveness of receiving commission for your visitorship relates to the percentages, namely the percentage of your visitors who head to the merchant site, and the percentage of those visitors who end up buying some product.
How does it work?
So far we've just skimmed over the top, so let's get closer to where the rubber meets the road.
Given the topic area of your web sites, find
- Merchants who sell products releated to your topic
- Have an affiliate program
Once you have your site written, apply to join the affiliate program of each merchant you identified.
Integrate links to product referrels into your web site.
The merchant will give you some kind of Affiliate ID string. This ID string is used in the links you make to their web site. When someone clicks on the link, they'll end up at the merchant site, and because of the ID string the merchant knows that the visitor came from your web site. The merchant site will then track them through their web site, and if they end up buying something a percentage of the sale (the commission) is added to your account.
Different affiliate programs let you make simple banner links referring customers to the merchant's home page. Others let you make links referring customers to specific products, to product category pages, to arbitrary searches, etc. In all cases you end up with some kind of link that contains your ID string telling the merchant site that the visitor came from your web site.
Often the merchant site uses "Cookies" to track which web site a visitor came from. The cookies are generally handled invisbly and behind the scenes, but since they are sometimes controversial it is worthwhile letting you know cookies are often used. And, no, I am not talking about the kind of cookies you eat, but the ones exchanged between web browsers and web servers.
Here's a few affiliate programs
amazon.com: The online merchant who kinda invented online merchantry is also one of the biggest players in affiliate programs. They may have launched the first affiliate program, or maybe not, but this is where I learned about affiliate programs. They carry a wide enough range of products that you may be able to satisfy all your product referrel needs through the one store, or maybe not.
Commission Junction handles the affiliate relationship for a wide range of individual web sites. Instead of affiliating with an individual merchant, as you do with Amazon.COM, with Commission Junction you have a broad menu of choices, any of whom you can draw from for product recommendations.
Link Share is like Commission Junction, only smaller. You have a similarly broad range of merchants, just a smaller menu to choose from.
ShareASale.com: An affiliate program like Commission Junction and Link Share.
Powells.com, like amazon.com, handles their affiliate program directly. Unlike amazon.com, Powells has remained commited to being a bookstore.
Associateprograms.com is a web site giving tons of information about effective use of affiliate programs, and referrels to many more individual merchants. A companion web site, Lifetimecommissions.com, specializes in programs that pay recurring commissions.