One of the most popular methods of web site marketing is called Affiliate Marketing. Affiliate marketing is a method of paying "affiliates," who are basically online sales people earning commissions based on sales from their referrals. Commissions are usually a percentage of the referred sale, but may include pay per click or a set dollar amount per referral. Once an affiliate signs up, they place some form of advertisement on their site. An example of this process follows.
A music review site applies for the Apple iTunes affiliate program, which pays a 5% commission on referred sales. Once approved, Apple gives the new affiliate a special URL to use that includes their affiliate code. The music review site places some text, maybe some graphics and banners, in their site that links to the iTunes site with their URL. Apple site uses the special URL/affiliate code to track sales that are referred by the music review site, and sends monthly checks to the affiliate for 5% of those sales.
Examples of highly successful affiliate programs to look at and learn from are amazon.com, landsend.com, buy.com, clubmom.com, allposters.com, and ehealthinsurance.com.
Becoming an affiliate is easy. There are thousands of programs available. Beginning your own affiliate program at your site is more difficult. Done right, your affiliate program can boost sales many times over, or even become your sole source of sales. Done poorly, and you can waste a lot of time. It is worth studying, preparing and even hiring help to do it right.
Affiliate Marketing requires a serious commitment. Affiliates are basically a sales staff that uses their site to sell your products and services. So, as sales people, they need ongoing sales management. This could be in the form of e-newsletters, personal e-mails, telephone contact, being available to answer questions, providing training and advice, creating incentives to keep them motivated, etc.
To set up an affiliate program, you must answer some questions: