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Affiliate Programs : Golden Opportunity or Waste of Time?



AliExpress by Alibaba.com


Now that the idea of doing business over the internet has been firmly established, many potential internet businessmen are searching for the best way to do business. Usually the choice comes down to whether you want to set up your own business and online store, or sign up for an affiliate program.

First of all, let's define what we mean by an affiliate program. An affiliate program is basically an internet business set up by someone else. They could be selling physical goods, education, information or any other products that can be sold online. By signing up as their affiliate, you are helping them promote their business or store. In return, they will pay you a commission for each sale you bring them. The amount of commission varies between different affiliate programs. Examples of affiliate programs include Amazon.com and Wordtracker.

1) EARNINGS

So how does an affiliate program differ from starting your own online store? Let's start by looking at the potential earnings. (After all, the main reason everyone wants to start an internet business is for the money). When you sign up for an affiliate program, you will be paid a commission for each sale you refer to the online store. This commission can range from 5% to 15% for physical products, and possibly up to 50% or more for virtual products such as subscriptions and ebooks.

On the other hand, if you start your own store, your profit can be much higher. For virtual products, your profit can be 100% of your selling price. After all, once the newsletter or ebook is created, you do not need to spend any more effort. When someone buys your ebook, they just download it from your website. If you are selling a physical product, your profit depends on whether you are manufacturing the product yourself, or buying from a wholesaler or dropshipping company. Your profit in this case could easily be more than 40% or 50%.

So, if you only consider the potential earnings, starting your own business is more lucrative than joining an affiliate program.

2) LOGISTICS

However, money isn't everything (Or so they say). When you are starting your own internet business, there are a number of logistic issues you need to look at. Here are a few things you would need to take care of:

a) Create your website

b) Design your product (if you are selling new products)

c) Create your product (if you are selling new physical products, or any virtual products)

d) Set up an online store

e) Set up a merchant account or payment gateway

f) Set up a warehouse or storage space (if you are selling physical products)

g) Have procedures and staff ready to fulfill orders

h) Set up an affiliate program to get others to market the products for you

i) Monitor for fraud

j) Monitor stock levels

As they say, "No pain, no gain". Having your own store pays very well, but requires a substantial time investment from you.

On the other hand, if you sign up for an affiliate program, all you need to do is set up a website to promote the program. All the ads, banners, marketing text etc will be provided to you by the affiliate program. Your only responsibilities would be to get people to visit your website, and hopefully click on the affiliate links to buy the products that you are promoting.

3) CONVERSION

Whether you have your own business or are promoting an affiliate program, the bottom line is the conversion rate, or the percentage of visitors that actually buy something from you. A number of factors influence this conversion rate. Factors as quality of the product, quality of the website, customer support are all important. However, I personally believe that the most important factor is trust.

When a potential customer arrives at your website, he will need to trust your site enough for him to be willing to buy from you. After all, on the internet you are just a faceless salesman. He doesn't know who is actually running the site and whether he will actually get the goods that he orders.

Having said that, one of the key methods of garnering trust is by recommendation and referral. If a store is being referred to or recommended by another website, the potential customer will feel that the store is trustworthy. After all, if the store is not trustworthy, why would the other website recommend it?

This is where affiliate programs shine. When you refer a potential customer to the store for which you are an affiliate, the customer will feel more relieved, since the store is being recommended by your site, a 3rd party. The customer will be more likely to buy from the store, benefiting both the store, and you as well.

There are both pros and cons to joining an affiliate program. You might earn less with an affiliate program compared to starting your own store, but I believe the benefits of not having to be responsible for the logistics makes affiliate programs are very viable "passive" source of income.

Steven is the webmaster of http://www.onlinebiz-help.com - Your Guide To Internet Business. His website contains various resources on affiliate programs and internet marketing advice to help you succeed in your internet business.

AliExpress by Alibaba.com


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Amazon just provided a nice little reminder of why it's risky to build a journalism business on affiliate fees - Nieman Journalism Lab at Harvard
Amazon just provided a nice little reminder of why it's risky to build a journalism business on affiliate fees  Nieman Journalism Lab at Harvard

Amazon is a powerful partner, but as book publishers have learned, it can also be a fickle one.


Disney sees Q3 year-over-year earnings growth, thanks partly to ESPN's affiliate revenue growth and - Awful Announcing
Disney sees Q3 year-over-year earnings growth, thanks partly to ESPN's affiliate revenue growth and  Awful Announcing

Disney's earnings calls have often featured questions about ESPN struggles. But not so much this time around, with ESPN seeing year-over-year growth.


Hikari Power LTD Cut Its Celgene (CELG) Stake by $1.62 Million; As Viacom New (VIAB) Market Valuation Rose, Shareholder Causeway Capital Management Lifted Holding - Lives Advice
Hikari Power LTD Cut Its Celgene (CELG) Stake by $1.62 Million; As Viacom New (VIAB) Market Valuation Rose, Shareholder Causeway Capital Management Lifted Holding  Lives Advice

Hikari Power Ltd decreased its stake in Celgene Corp (CELG) by 28.27% based on its latest 2018Q3 regulatory filing with the SEC. Hikari Power Ltd sold 18200 ...


First Trust Energy Infrastructure Fund Declares its Monthly Common Share Distribution of $0.11 Per Share for March - Business Wire
First Trust Energy Infrastructure Fund Declares its Monthly Common Share Distribution of $0.11 Per Share for March  Business Wire

WHEATON, Ill.--(BUSINESS WIRE)--First Trust Energy Infrastructure Fund (the "Fund") (NYSE: FIF) has declared the Fund's regularly scheduled monthly ...


Twitch Partners Feeling Burned After Affiliates Receive Features That Took Them Years To Earn - Kotaku
Twitch Partners Feeling Burned After Affiliates Receive Features That Took Them Years To Earn  Kotaku

There are Twitch streamers, and then there are Twitch streamers. The platform has tiers: hobbyists, affiliates, and partners. The latter two titles must be earned ...


Ally Financial Inc. filed on Wed, February 20 10-K Form | Thorold News - Thorold News
Ally Financial Inc. filed on Wed, February 20 10-K Form | Thorold News  Thorold News

Ally Financial Inc. revealed 10-K form on February 20 accessible here.Further, under the BHC Act, we may be subject to approvals, conditions, and other.


What Will Disney's Near-Term Revenue Growth Look Like? - Forbes
What Will Disney's Near-Term Revenue Growth Look Like?  Forbes

Disney (NYSE: DIS) had a mixed first half of the calendar year, despite solid gains in core segments – as both earnings per share and revenues came ahead of ...


CBS Says Q1 Profit Rises on Advertising, Affiliate and Content Revenue - Variety
CBS Says Q1 Profit Rises on Advertising, Affiliate and Content Revenue  Variety

CBS Corp. said first-quarter profit rose as revenue from advertising, *content* licensing and affiliate fees — its three main financial engines increased during the ...


Think The Wirecutter invented affiliate revenue? Meet the mom who's been doing it since 2010 - Nieman Journalism Lab at Harvard
Think The Wirecutter invented affiliate revenue? Meet the mom who's been doing it since 2010  Nieman Journalism Lab at Harvard

Lucie's List has 360000 subscribers and pulls in enough revenue to support a family and a staff in San Francisco.


Publishers say affiliates generate more revenue than other types of marketing - ZDNet
Publishers say affiliates generate more revenue than other types of marketing  ZDNet

A recent survey points to a bright future for affiliate marketing and social engagement.


Future buys Purch to boost US revenue - Digiday
Future buys Purch to boost US revenue  Digiday

This week U.K. specialist publisher Future announced the purchase of technology platform and publisher Purch for $132.5 million (£101 million), marking ...


New NAD Decision Addresses Affiliate Links - Ad Law Access
New NAD Decision Addresses Affiliate Links  Ad Law Access

As part of its routine monitoring, the NAD requested substantiation for various statements that a BuzzFeed staff member had made about a moisturizer in one.


Marijuana Bills Introduced (So Far) in the 2019 Colorado Legislature - Westword
Marijuana Bills Introduced (So Far) in the 2019 Colorado Legislature  Westword

With a vocal supporter of legal marijuana in Governor Jared Polis, pot advocates and business owners expect further legislative efforts this year to include social ...


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