Understanding Affiliate Marketing and How it Works

Affiliate Marketing is a method of promoting a product for sale by and affiliate marketer.  An affiliate is then compensated for every sale, or every click a visitor, subscriber, customer makes to view the offer. The company selling the product then pays the affiliate a commission for their efforts that lead to an actual sale.

In order to become an Affiliate Marketer you really don’t have to know allot about it to get started. You just need to learn a few of the basic ins and outs of the business.  Your first basic thing you should know is that you’re going to be selling other people’s products for commissions while making a very decent profit on each sale.

Selling Information Products

Now with promoting and selling information products you have three choices:

• Creative Product Marketing: You can develop your own information products.  If you have an idea,  skills, time and the financial resources.  If you don’t have the skills, you can hire someone…if you have deep pockets.  I would wait until you start making big money using other proven product methods

• Purchase License Resell Rights (PLR’s) products:  PLR’s can be purchased and sold as is or modified and even allow master label rights when purchased.  Make sure you know what you’re buying depending on your needs.  You don’t want to find yourself in a copyright infringement.  Each PLR spell out what their licensing rights and how you can use them. Whats great about PLR’s is that you own whatever licensing right you purchased.  You make 100% of the profit, or  you can recruit other affiliates to sell them for you as well.  More about that in a future post.

• Promote Affiliated Products: Promote and sell someone’s created and test proven affiliated products. This is the easiest and fastest way to get started.  They are ready to go…just set them up and drive traffic to them through your list or any paid advertising of your choice.

Creative Product Marketing

Why not just create a sell your own product and keep all your profits?  First of all if you decide to be product creator, there are no guarantees that your product will even sell.  Whether you developing an information or tangible product, you could essentially that spend months or even years creating something while pouring a huge amount of money and hard work into it; only to find that hardly anybody buys it.  Your end results then would be either no or low ROI (Return on Investment) let alone the huge disappointment to follow and maybe even bankruptcy.  This could be enough to completely destroy all of your motivation, enthusiasm and finances so badly that it can totally put an end to all your future business ventures altogether.  

Should you decide to create and sell a tangible product, now you’re dealing with a tangible commodity and that means extra expenses.  In addition to product development, production, testing and advertising cost, you’re going to add inventory warehousing and possibly shipping cost as well.

Now if you feel you have a product that is going to rock the sales charts and you don’t mind taking on the cost and risk factors, go for it!  Like I said before, for the average person this ends up to be a costly, long process and risky venture.  Wait until you start making six figures before deciding to take the creative product route. Should you decide to create your own products, I would suggest finding a mentor who will instruct and guide you through the process.

Private Label Rights (PLR’s)

Another route you can take is selling products already on the market on Amazon etc… Doing this you can make anywhere form 20-40% in commissions.  Not bad, but there’s sure is a lot of competition.  Someone is always trying to underbid you whether on Amazon or eBay etc.  So you are constantly cutting and adjusting your prices in order to stay competitive.

Quite frankly I like the last two.  (This is normally your backend offer).  The only thing with resell rights is you will take on some of the investment risk because you purchase them.  This is very small in comparison to developing a product yourself.

Affiliate Products

With affiliate  pre-developed information or digital products you can chose products that already have a good sales record, make sure to pick products that have marketing tools included.  Just sign up to be an Affiliate wait to be approved, get your affiliate links, maybe few tweaks to the sales pages and your set to go. Now all you have to do is drive traffic to the offer.  There are plenty of ways to creating traffic inexpensively or you can go with PPC (pay-per-click) or PPA (pay-per-action).  If the customer is unsatisfied with the offer and wants a refund, the original seller deals with the hassle.  Sure you lose the affiliate commission but you still might make a little money for the lead depending on the sale agreement.

What to Look for When Choosing Your Affiliate Products

Actually there are thousands and thousands of products and services that you can choose from.  No doubt choosing the right affiliate product to sell isn’t always easy, especially if you’re a newbie in the affiliate marketing business.  Choosing the right products is a decision will ultimately have the biggest impact on your success or failure in this business.

There’s Loads of Advantages with Affiliate Marketing…

Now that we have looked at what affiliate marketing is, let’s look at some of the advantages with becoming an online affiliate marketer and why it is really is an affordable and profitable way to making money online:

You Won’t Need a Merchants Account

Setting up and maintaining a merchant account is very time-consuming and costly expense for anyone who is setting up any type of business for the first time.  This is even more so with an online business. What is great being an affiliate marketer; the merchant you are selling the product will be responsible for covering all the costs, as well as handle the processing of all payments and refunds.   You essentially will never have to worry about; or deal with any of the potential charge backs, fraudulent purchases or even losing your merchant account completely.  The most that can happen is losing your commission for that sale.  This would be normally deducted from you next commission payout.

Compensation and Commissions

Affiliate’s are paid by compensation and/or by commission based on a fix value for each pay-per-click (exposure or visit), or new customer optin, (pay-per-lead).  Commissions for a sale are usually a certain percentage of the sale price for each item sold (pay per sale or revenue share) or a combination there of.   Companies like using affiliate marketing because they incur little of the actual marketing expenses used in promoting their products to prospected customers until they achieve a desired result.   Many small to midsize e-commerce businesses today owe much of their growth and success to the use of affiliate marketing.

No Production Costs

With an affiliate program, production costs are no longer an issue since the product is developed and proven they already work and sell.  Best of all, it has all come out of the merchant’s accounts and not yours.

Low Startup Cost

All you will need is a desk, computer, internet connection and word processing software to get started, basic computer skills and the ability to learn a few new skills.

Most Affiliate Programs are Free

Normally it is free to join an affiliate program, and all the set up costs and shipping costs will be met by the merchant whose products you are selling.

No products to Store

In most cases there isn’t any need to have a place to store any goods because all the goods are held and distributed by the merchant whom you are working as an affiliate.

Many Options

Try selling in more than one niche; what do you have to lose?  Tying more than one product is a must.  Never put all your eggs in one basket…Only then will you know whether it is your marketing methods that need improvement or if the product you’re trying to sell might have met its life expediency.

In conclusion:

It’s really not all that complicated.  People make things more complicated than they really are and find excuses like it’s too much work and they don’t have the time.  We all have the time to do anything we just have to set our priorities.  This is exactly why this is such a growing industry.  Anybody with who has the desire and mindset for successful will have am excellent chance with success.  Remember there are risks involved and you not necessarily going to become successful over night.

Remember most people are very content being where they are in there lives, are afraid of change and challenges even though they feel unsatisfied with their lives.  It is so much easier to complain about their lives than change it.   So what are you?    A Life Complainer or a Life Changer…We know where the complainers are going to end up…So why not become a Life Changer and never look back!

Come join the journey here at My Next Successful Affiliate. As my blog grows with success so can you…  Any questions always feel free to ask me.  My goal is to help you become successful and achieve the dreams you’ve always desired.