What IS Affiliate Marketing REALLY?

The Good, The Bad, and The Ugly.

Affiliate Marketing (for those who don’t know what it is) is essentially the same concept as drop and ship – only you have less paperwork.

With drop and ship you get the order on your site (from your customer online who ordered it from your site) and then you send the order to the actual company you’re buying from, pay them, and they drop it in the mail and ship it (hence “drop & ship”).

You’re dealing with a bunch of web work and paperwork that needs to be dealt with in a speedy fashion and someone’s got to be there at your business location every day to handle the details.

Affiliate marketing is similar in that you don’t physically stock the objects you’re advertising on your site and you also don’t deal with the shipping end. But instead of selling them from your site and getting paid the full amount and then ordering and having the item shipped (while you keep your markup price) Affiliate Marketing deals with visitors to your site clicking on a special link to buy* which then takes them to the order page on another company’s web site where they buy and you get a percentage of the sale. You don’t have to be there to do anything to make money if they click.

*NOTE: Affiliate Marketing works quite well with private deals done directly with some companies if you’re able to develop the right relationship(s) at the right level(s).

That’s the simple explanation and it’s sound.

The honest industrious business man or woman with his or her eyes and ears open can sometimes find a few to several good products a year through active live personal and online social media interaction with people, and they can work out quite well as long as both sides are honest.

I’ve seen deals sour quickly when commissions aren’t paid so whether you’re making private deals or going through some of the Affiliate Marketing broker sites (Like Commission Junction etc. make sure you have some tracking code inserted into your links and some sort of an after sale “value added” offer to assure you have a way of measuring how many sales you’re actually making. If clicks that make sales (and you have proof sales were made) don’t line up with payments then you know your Affiliate Publisher is robbing you.

How? (It gets complicated – it always gets complicated!)

The simplest way is to use your server logs or analytics logs to show when each out-click on an affiliate link is made. With that you have a log of when the link was clicked. Before that however you offer a “special bonus” of some potential interest and value to whoever clicks on your affiliate link. In order to qualify for the special bonus all they have to do is email you a copy of their digital receipt as proof after they have made their product purchase.

This lets you compare the time stamps of the purchases to the time stamps of the outbound clicks. If they don’t line up, you’re being robbed. You don’t need 100% of the people to send you a receipt to eventually find that you’re not being paid. This works on both Affiliate Marketing broker sites and individually with businesses you’ve made special deals with.

Affiliate marketing can make you millions if you’re able to get a good programmer onto your team who can work with marketing copy feeds (those descriptions of items and prices etc exported in various forms such as comma separated values, spreadsheets etc) and then integrated into a site using Feedburner (an advanced Affiliate Marketing tool you won’t be told exists if you’re just breaking into Affiliate Marketing) and a few advanced techniques including rewriting the feed to individualize it so it doesn’t show up as duplicate content in Google and “link cloaking” so that Google doesn’t see your site as an Affiliate Marketing site because Google doesn’t like Affiliate Marketing sites.

That said, you can pay a whole lot of money to top notch Affiliate Marketing firms to manage your campaign for a large percentage of your cut – or you can start small and make less with a lot of work done manually (without the programming, marketing copy re-writing and the automation of Feedburner) and just pay your SEO and Webmaster and still make more money.

Either way you’ll make more money. If your company has the big bucks definitely go with the old pro’s on a new site or make sure you have a good back door out of your contract if it’s you’re company’s only site.

Deals such as “if you don’t have the marketing expenses up front we will pay them ourselves but then we will retain the rights to 50% of all increases in sales that occur from that point forward” might SOUND good, but think about the actual amount of sales when you’re starting out on the web – they may be close to nothing – so if after 5 years you’re making five million dollars in total sales from a site you’re paying out 2.5 million for 5 years or $6.25 million dollars!

BE CAREFUL!

Seriously! These early deals are what make the most famous Affliliate Marketers rich – which is what almost always attracts people like you to them in the first place. They’re rich, they must be good, I’ll go with them, they know what they’re doing, I’ll agree to their terms which I know are standard — and boom! You’re hooked, making them even richer with a partnership that earns them more than it earns you!