After two years of relying on Pay Per Click (PPC) advertising, organic search engine results, web directories and word of mouth, I finally decided to give web affiliate programs a try.

From my research, I knew that there are a lot of affiliate marketers (as affiliates like to refer to themselves) who are making a decent to good living steering customers to online stores. When I'd investigated adding our site to one of the programs, I always felt that the reputable sites were too expensive and that the cheaper sites were too risky.

Recently, I read some good feedback about Shareasale and took a look. Shareasale is less expensive to get into than Commission Junction or Clickbank, but has developed a reputation for having a well-run program.

I'd also heard that most of the many of the major affiliates that produce results are signed up at Shareasale, so I was eager to see what results I could expect. I handed over my $150 signup fee and $50 affiliate payout deposit and hoped for the best.

The site I wanted to promote is a designer and manufacturer of women's fitness wear. From ongoing research, I was already familiar with most of the high traffic sites with a readership that would be highly targeted to our store. I didn't expect to see many (if any) of them signing up as affiliate marketing is not a major source of their revenue models.

What I've found so far is that coupon websites are apparently all the rage right now in affiliate marketing. Within a day or two of joining the Shareasale program, a dozen or so coupon sites had signed up as affiliates. Coupon sites collect information about "good deals" on products available at online stores and then disseminate that information to their website viewers and newsletter readers.

Some of the larger and more popular sites in this space include FatWallet.com and SlickDeals.net. In addition to offering up coupons and discounts for shopping, some of the sites have gotten into the "cashback" game as well. If you order merchandise from vendors on their list, they promise to refund to you a small percentage of your purchase price.

All of this is fueled by affiliate marketing. From the perspective of an online store owner, it works out to be a pretty interesting channel. A certain percentage of your shoppers are going to be more price sensitive than others. Finding ways to sell products at low prices to those that demand it while getting top dollar from customers that aren't as concerned about cost is one of the major strategic challenges that a retailer faces.

The goods that our store carries are upscale. While our average customer does not want to overpay for their clothing, their primary consideration is value. Does the merchandise fit their style, fabric, and quality requirements. As a result, we very rarely run sales. But, even in our market there are customers who demand a bargain. My wife is like that. She just hates buying non-essentials unless she can get a discount. She's also the type of person that likes to feel like she got the best possible price on something and is willing to do whatever research is required.

If we can reach that type of customer via coupon sites without affecting non-price sensitive purchasers, that could very well be a win for us. There are two goals most stores try to accomplish with affiliate marketing. First, gain access to customers they would not likely have reached on their own. Second, find a way to bring customers to the store cheaper than they could do themselves. Coupon sites seemed to satisfy the first goal and so was something we were excited about.

One thing that you need to decide before signing up affiliates for your online store is whether you will allow them to use PPC to send customers to you. In the past, there was a thriving trade where affiliate marketers would bid on PPC keywords and send traffic directly to a webstore with their affiliate ID attached. Depending on the circumstances, may or may not be a good thing. Affiliates might do a better job of writing ads that appeal to target customers and may be able to convert traffic less expensively than you could yourself. On the flipside, its also possible that you would be paying more in affiliate commissions than you would have in PPC charges for the exact same customers.

The first sale credited to an affiliate for our program actually came in this way. The affiliate cleverly realized that they could bid just slightly higher on our company name than we were and capture customers who were specifically looking for our brand. By far the highest converting keywords we have in our PPC campaigns are based on our company name, so this could be a goldmine for the affiliate. However, for obvious reasons, paying 15% commission to the affiliate on the sale rather than 0.15/click to Google's Adwords just didn't make business sense for us, so we modified our affiliate rules such that affiliates are not allowed to send traffic directly to our website via PPC campaigns.

We're still early in the program and its yet to be seen whether affiliates will drive a significant part of our sales or not. We'll be certain to add new articles to the archives as we continue to learn from our experiences.

------

(c) 2005 Ecommerce-Daily.com

J. Morgan is a serial entreprenuer who has been involved in the cutting edge of Internet ecommerce since its earliest days. He is presently the VP of Marketing for an upscale designer and manufacturer of women's fitness wear. In addition, Mr. Morgan runs several content websites including Ecommerce-Daily.com.