Affiliate Program Basics
Affiliate programs, also known as referral programs, associate programs, profit sharing programs or reseller programs, give affiliates the ability to create an online business selling thousands of products and services.
One of the first affiliate programs was run by the mega-bookstore, Amazon.com and they still have the largest base of affiliates on the Internet, with over 600,000 affiliated sites (although they may not be the best affiliate program for many).
Affiliate programs are generally offered by sites selling goods or services, although some affiliate programs reward other types of transaction such as getting a visitor to sign up for a free newsletter, or a download.
Some affiliate programs pay per-lead rather than per-sale; in other words, you bring them a prospective customer and they pay a fixed "finder's fee" for the chance to market to that customer. This is a typical arrangement for affiliate programs in the insurance, real estate and credit card industries, for example.
Types of Affiliate Programs
There are several common types of webmaster affiliate programs, including:
Pay-per-sale: If you refer a visitor to the online merchant's site and if that visitor makes a purchase, then you get a percentage of the sale as a commission.
Pay-per-lead: You get paid a one-time fee for generating a lead for the merchant.
Pay-per-click: You get paid for every visitor you send to the online merchant regardless of any sale or purchase.
Two-tier: You get a commission on direct sales you generate plus a commission on sales generated by affiliates you recruited.
Benefits of Affiliate Programs
One of the biggest benefits of using an affiliate program is that you just need to drive traffic to your affiliated site. You don't need to find or deal with brokers, wholesalers or inventory, process orders, shipping and handling, customer service, tech support, handle returns, warranties, employees, etc. An affiliate doesn't even have to be present; your site will keep earning money while you're sick, on vacation, or just doing something else. Another advantage of being an affiliate is that you do it from almost anywhere in the world.
How These System Work
When you join an affiliate program, you will be given a specially formatted URL (link) that you should use to link to the affiliate program provider's site. This will enable the affiliate provider to monitor the traffic you send from your site and pay according to the type of affiliate program.
Many affiliate programs pay a commission based on a percentage of revenue generated by purchases made by visitors coming from your website. For example; if you participate in an affiliate program that offers a 25 percent commission and you send a visitor who purchases $100 worth of products, you'll earn a $25 commission. The commission rate itself can vary from 20 percent up to 50 percent or more in the case of intangible products such as eBooks or website subscriptions.
Affiliate programs vary widely in terms of overall quality, reliability, commission, statistics, plus the amount of help that the merchant site offers in marketing the products or services it sells, and so on.
By thoroughly understanding an affiliate program, you'll minimize the risk of not getting paid - and maximize your potential earnings.