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How
do you setup an Affiliate program?
By
Bart Smith, TheMarketingMan.com
| 2,359 Words | Published 06/21/2007
 You
know, there's an old saying, that goes like this ...
"I'd
rather earn 1% from the efforts of
100 people, than 100% of my own."
Now,
you might be wondering, what does that mean? 1% from the efforts
of 100 people! Well,
there's "power in numbers," and the more people
you have selling for you "besides you," the greater
your chances to make even more sales = MORE MONEY FOR YOU!
What
Is An Affiliate Program?
An
Affiliate Program is
a "marketing system" that tracks the "sales
efforts" of other people (referred to as "affiliates")
who sell your products and/or services in exchange for a commission
from every sale they make.
What
Is An Affiliate?
An
Affiliate is
essentially a sales person (or company) who refers potential
customers to you, called referrals. When these referrals purchase
products and/or services from you; then the affiliate is due
a commission for making the referring sale!
You
can have an unlimited number of affiliates sell for you or
you can limit that to a more controllable number you like.
To control the "sales growth" of your company online,
sometimes, it's a good idea to control the number of affiliates
who sign up to join your affiliate program (just in the beginning).
Later on, as you develop more of an understanding of your
business, running it online, and making all those sales, then,
you might consider opening the doors to allow more affiliates
to join your affiliate program.
How
Does An Affiliate Program Work, Technically?
When
an affiliate signs up for your affiliate program, they're
issued a unique tracking URL or web link associated with your
web site. The following is a sample affiliate link:
http://www.MyTrainingCenter.com/cmd.php?af=338410
When
an affiliate refers potential customers who click through
(the affiliate's unique affiliate link) to your web site online,
a computerized tracking system drops a small cookie on the
potential customer's computer. When that customer makes their
purchase, the affiliate who made the referral receives credit
for the sale and a commission from you for helping you make
that sale.
 How
Much Do You Pay Your Affiliates?
It
all depends whether the product(s) and/or service(s) you're
selling are physical, digital or non-tangible goods and services.
Later on in this tutorial, we'll cover these topics more in
depth. So, stay tuned. Keep reading ... 
How
Do You Track & Manage All This! It's A Lot!
Wow,
you can imagine the daunting task of tracking all these affiliates
and their sales by hand, right? Well, breath easy, it's all
tracked and managed by a computer system called MyMarketingCart.com.
MyMarketingCart.com's
built-in affiliate-tracking software program allows you (the
web site owner) to create a snowball effect almost of extreme
marketing proportion to sell more products and services. And,
because it's automated, all you have to do is learn how to hook
it up, train your affiliates, run simple reports, and pay your
affiliates what they're owed on a regular schedule. (i.e., weekly,
bi-weekly, monthly, quarterly, etc.)
For
example, MyTrainingCenter uses MyMarketingCart.com
to track, manage and pay those affiliates who refer paying customers
to us whom become subscribing members of our web site to learn
more about computers online. 
What
are the benefits of starting your own Affiliate Program and
building your own online Affiliate Sales Force to sell for you?
Simply
speaking? There are too many to count, really! Check this
out ...
Having your own affiliate program allows you to reach more
potential customers without the "up-front" marketing
costs typically associated with traditional marketing and
advertising campaigns. Starting your own affiliate program
is a powerful marketing tactic which can help you gain immediate
sales at a very reasonable cost. What are the benefits to
running an affiliate program from your web site? For starters:
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Increased
Traffic! With your own affiliate program,
you have the power to increase the amount of traffic
to your site, virtually overnight.
Increased Sales!
Operating your own Affiliate Program helps to increase
the number of eyeballs and traffic to your web site.
And, typically, an increase in eyeballs and traffic
usually leads to an increase in sales!
Huge Sales
Force!
For
every new affiliate that signs up, you gain a new sales
person! In time, you may have hundreds, even thousands,
of affiliates and sales representatives all around the
world helping to market and sell your product or service!
Low-cost Marketing Tactic!
Affiliate marketing allows you to
market more widely without the "up-front" marketing
expense typically associated with traditional marketing
and advertising campaigns. Starting
your own Affiliate Program is a powerful marketing tactic
which helps you gain additional marketing exposure at
a very reasonable cost.
Smart Marketing Tactic!
You only pay commissions
to your affiliates WHEN they make a sale and never before!
You pay for RESULTS! Your
affiliates do much of the work and get paid ONLY when
THEY make sales! The more THEY EARN, the more THEY WORK!
The more THEY WORK, the more YOU EARN. It's a WIN-WIN
situation all around for both you and the affiliate! |
Why
are Affiliates so important to growing your business?
Keep
this in mind ... "You only
pay commissions to your affiliates WHEN they make a sale and
never before!" You only pay for RESULTS!
Your affiliates ONLY get paid when they make sales! So, there
really isn't any cost to starting your own affiliate program
except a little bit of time in the beginning setting up the
affiliate program and then making some announcements to your
business associates and certain affiliate announcement groups
that you have an affiliate program. Operating
your own Affiliate Program helps to increase the number of
eyeballs and traffic to your web site. And, typically, an
increase in eyeballs and traffic usually leads to an increase
in sales!
What
are some sample uses for having your own Affiliates Program?
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Entire Catalog of Products
— You could offer a commission
for any one who sells anything from your entire catalog
of products from your web site. This would be a global
commission assigned to all your products (like a % of
every sale or total order).
Individual
Products — You could also
run individual affiliate campaigns per product and award
specific commissions you set "per product",
either a % or $-based commission, upon the sales of
individual products by your affiliates on different
web sites you own.
Seminar & Tele-Seminar
Registrations — You could also
offer a commission for any one of your affiliates who
refers potential attendees to your next paid seminar
or tele-seminar registration. For instance, let's say
you were offering a seminar that costs $2,000 to attend;
you could offer your affiliates up to 50% commission
to refer potential prospects to register for your event.
Would it be worth it? Sure it would! There are lots
of people who'd like to make $2,000 by referring two
(2) people to register for your great seminar. And,
you won't mind, because you won't have to spend a majority
of your time marketing; you can focus your attention
more on planning and preparations for the event to ensure
its success.
Consulting & Coaching
Services — Perhaps you run a consulting/coaching
business and you'd like to find more clients. All you
need to do is "share a little" of the sale
(or client fees they pay) with others and watch the
number of leads and referrals go through the roof! |
People
are motivated by money! And, if you share some of the profits,
earnings, fees, etc. with your affiliates, you'll have more
work than you can handle, and you'll be making a lot of people
(i.e., your affiliates) very happy! A good thing!
What
are the steps to setting up your Affiliate Program?
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Affiliate
Program Software — The first thing
you need to do is get
a shopping cart that has a built-in affiliate program
so you can track and calculate sales your affiliates make
when they refer customers to you who buy through your shopping
cart!
To
do this, you need MyMarketingCart.com.
Why? Because, other shopping carts do not have an affiliate
program "already built-in." What does it cost
to add an affiliate program to your shopping cart? Well,
it depends on the kind of shopping cart your have. If you
don't have MyMarketingCart.com, it could cost you $250-$750
(on average) to install by a technician. Then, upwards of
$50 per month maintenance. Yikes!
MyMarketingCart.com,
which is what I use, has both, the shopping cart "to
collect the order" and the affiliate tracking software
"built-in" to allow others to help sell for you,
track their sales and automatically run reports every month
that will tell you how much to pay them. Wow, now that's
the way an affiliate program should run! MyMarketingCart.com
offers you just that. |
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Set
Your Affiliate Commissions — The next
thing you need to do is setup your affiliate program and
set your commission levels according to the types of products
you sell. How much do you pay your affiliates? Well, it
depends on the kinds of products you have to sell.
First,
determine what kinds of products
you wish to offer a commission for
when affiliates refer business to you.
Physical
Products (i.e., books, tapes, workbooks,
CDs, etc.) — Typically, commissions set for physical
products are set (lower than digital products) because
you have hard costs you have to cover; such as printing,
packing and shipping costs. So, commission for physical
products are typically set between 5-25%.
Digital
Products (i.e., eBooks, eReports, eClasses,
etc.) — Typically, commissions set for digital products
are higher than those set for physical products because
there usually aren't any hard costs involved with creating
or delivering digital products. I mean, you don't wouldn't
charge for shipping if you sold an eBook. And, you certainly
don't have any printing costs associated with selling
eBooks either. So, commission levels for digital products
can be higher, between 25-50%.
Tele-Seminars
(a.k.a., tele-calls, tele-clinics, tele-classes, etc.)
— Typically, these products sell like digital goods.
There are no real physical costs involved with running
a tele-seminar. So, you could offer your affiliates a
commissions between 15-50% when they refer others to you
who sign up for your tele-seminar.
Seminar
Events (i.e., workshops, boot camps and
live seminars, etc.) — Much like physical products,
there ARE hard costs involved. Here's where the "tuition"
or cost to attend your seminar comes in. Calculate first,
your costs for conducting the live seminar. Then, calculate
what you are going to charge each attendee. What's left
over? Typically, that's your profit. Now, how much can
you offer the individual affiliate and still keep a nice
profit for your self. The more you charge folks to attend
your seminar, typically, the higher you can pay your affiliates.
The lower the door fee, the lower the commission. Play
with the numbers so you (1) cover your costs, (2) pay
you affiliates a nice commission for their efforts and
(3) maintain a nice profit for yourself when the show
is all over!
Further,
you'll need to decide which
method you'll be tracking their referrals to
your web site:
Per Click
— You pay your affiliates based on how many consumers
"clicked" through their individual affiliate
links. While the idea sounds good, you do run the risk
of your own affiliates clicking on their own affiliate
links to earn more money (with a click-based affiliate
compensation plan).
Per
Lead
—You pay your affiliates for every lead they generate
for you. These leads don't have to become customers for
you to pay them. Keep this in mind, we want to grow your
business and only pay affiliates after a sale is made.
That's the more economical way to run an affiliate program.
Keep reading ...
Per
Sale
— You pay your affiliates based on every sale they
make, not cilck-throughs or leads, but actual sales as
a direct result of their marketing efforts.
And,
you'll need to determine how
many levels or "tiers" you will pay your affiliates.
For instance, MyTrainingCenter offers a 2-tier affiliate
compensation plan. This means, MyTrainingCenter pays out
commissions for "direct" sales its affiliates
make; then, when those sales/customers make referrals, the
original affiliate will receive a 2nd level (or tier) commission
as well. Is
there an advantage over having a 1-tier compensation plan
versus a 2-tier payout plan? Absolutely. Let me ask you
this question again: Would you rather have 100% of your
own efforts (i.e., 1-tier compensation plan) or 1% of 100
people's efforts (i.e., 2-tier compensation plan)? The answer?
Take the 1%
... Click
here to learn more about the power of 2-tier payout
compensation plans. |
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Affiliate
Marketing Tools — Now, with your affiliate
program setup the way you like it, what you need at this
point are marketing tools, ads, affiliate
marketing banners and sample marketing ideas your affiliates
can use to market your web site, products and services to
others. |
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Promote
Your Affiliate Program — Whew, when
you're all done setting up your affiliate program, figuring
out your commissions, assigning them to products and making
marketing tools ... It's time to promote your affiliate
program to others! |
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How
Do You Pay Your Affiliates When They're Owed Commissions?
Typically,
you pay your affiliates either by check, PayPal "mass
pay" service, or credit within your store. There
are other, more creative means, but, typically these are
the standard methods. What you will need to do is run
commission reports every month to calcuate how much each,
individual affiliate is owed. Then, from that report,
determine who requested to be paid by check or PayPal.
You can see sample videos on how to run such reports at
my shopping cart training site ... www.ShoppingCartTraining.com.
What
if you don't have a product or service to sell? How can you
still make money with an affiliate program?
If
you don't have your own product or service to sell and you still
want to make money using the Internet, simply join
an Affiliate Program
and sell someone else's product or service. There
are thousands of products and services to choose from!
While you focus on marketing and selling; the company will offering
the Affiliate Program
will concentrate on all the rest: product development,
order processing, order fulfillment, customer service, software
management, etc.
Bart
Smith, TheMarketingMan.com, is the founder of MyMarketingCart.com,
which offers shopping carts and other Internet marketing tools
and services to small and large businesses; and MyPaymentServices.com,
which offers merchant accounts and the ability to accept credit
card payments from your customers. Bart is also the creator of
MyTrainingCenter.com,
an online learning resource which offers extensive written, audio
and video tutorials for computers, business, marketing, speaking,
web design and creating information products. Bart also created
ReallyCheapNames.com,
where you can register domain names for "really cheap"
and find web site hosting at extremely low prices. Author
of three self-help books, totaling more than 1,000
pages, Mr. Smith dedicates himself to helping others, personally
and professionally, wherever he goes.
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