Affiliate Marketing Basics

This affiliate program guide is a starting point for choosing online Affiliate programs from the vast array available.  Choosing programs can be a wonderful experience providing you know how to evaluate what's on offer. Its almost impossible not to find something that takes your fancy, or that you are passionate about, or compliments your site etc. Its more a case of finding a reason not to go with a particular program than the other way round.

This affiliate program guide looks at the various types of programs you are likely to come across and what differentiates them. There is often confusion between online affiliate programs and MLM or pyramid schemes. With an online affiliate program your earnings come from you promoting a merchants site i.e. the work you do yourself.  With MLM and pyramid schemes you earn by introducing others to the program and from their promotions as well as your own i.e. you are rewarded both for your work and the work you recruit others to do. 

Multi tiered affiliate programs and MLM programs are similar but generally affiliate programs are free to join whereas MLM programs include a joining fee or some sort of initial investment.

MLM and pyramid schemes operate in similar fashion. However the fundamental difference lies in the emphasis placed on recruiting others to join the scheme.  With pyramid schemes this is the area of major concentration and members gain more benefit from recruiting new members than from selling product, if there are even any legitimate products on offer.

With a pyramid scheme everyone in the hierarchy chain receives payments from people recruited by them (below them in the chain) and makes payments to those (above them) in whose recruiting line they fall. This structure where commissions depend primarily on recruiting more and more members at increasingly lower levels is unsustainable and will eventually collapse.

Any affiliate program guide that promotes pyramid schemes should be avoided at all costs. Apart from pyramid schemes which type of program you decide on depends on whether you want to be involved with others or go it alone. If you enjoy training and motivating others to succeed and sharing in their financial success then tiered affiliate programs or MLM is the route to take. However if you prefer to put all your effort into your promotions and are not interested in building a downline and residual income then concentrate on affiliate programs.

Many internet marketing affiliate programs are two tiers or levels which is the best of both worlds. The second tier provides benefits to you if you do happen to introduce someone else to the program whilst the first tier rewards you for your promotions. 

How are earnings calculated

Essentially you earn by generating traffic. What happens with the traffic and what type of program you are affiliated to determines the level of earnings.

In its simplest form you have a website or an advertisement etc with a link to a merchant which someone clicks on. If you are on a Pay Per Click (PPC)program then that action by one of your visitors has earned you something, although as you might well imagine, it wont be very much perhaps a few cents. Not everyone who reads the ad will want to click on it, probably only about 2 to 4% of viewers will click through so you would need an awful lot of traffic to make it viable. On the plus side you win whether the click results in a sale or not.

Most payment schemes are performance based i.e. you get paid if the merchant benefits from the traffic, either in the form of a sale or lead etc. For Pay Per Sale (PPS) programs the click must result in a sale for the affiliate to benefit.

With Pay Per Lead (PPL) programs the visitor needs to show interest in what the merchant has to offer and provide information e.g. contact details which can be followed up in pursuit of a sale for the affiliate to benefit.

With Multilevel programs calculated earnings will include both yours and some portion of the earnings of those in your downline (people you have introduced to the program).

Where the merchant derives a recurring benefit e.g. a monthly subscription often the affiliate enjoys a residual income based on a portion of the monthly payment for as long as the customer remains in the scheme.

Tips

Most affiliate programs are free to join. Many merchants have systems in place to prevent you joining purely for a one off cheap product purchase. Its generally best to promote affiliate products or programs that you are familiar with, have used yourself and are happy with.

If you are not US based bear in mind that bank processing fees for US$ cheques can be quite high. Its best to choose programs where commissions can be paid via Paypal or where the merchant will accumulate the commission until a reasonable total (determined by you) is achieved.

Commission structures vary widely between programs. They range from around 5% to over 70%. Generally they are in the 40 - 50%. Some people recommend not looking at anything under 50%.

As an affiliate marketer you've established that you'll be promoting third party products/services rather than producing or sourcing your own products but that still leaves a huge choice of what to promote. If you have a passion or hobby or something you're madly keen about then the choice is somewhat easier. Either way spend time in Affiliate directories, and Affiliate networks, and you are bound to find something to get enthusiastic about.

Any affiliate program guide can only point you in the right direction but still requires your input of time and effort to find the best possibilities.