I consider Amazon.com to be the Internet pioneer in establishing affiliate programs. Their strategy of allowing others to sell their products for a commission on affiliate websites has helped them become an internet powerhouse and has resulted in Amazon.com becoming a household name.

As an online business owner, you should also offer your own affiliate program. Affiliate marketing is much less expensive than running a banner ad or text ad on other websites or in email newsletters, and the results tend to be better. Imagine you have a team of people working for you who have agreed to work for free until they make a successful sale. At that point, they get paid when their sales reach a predetermined volume (as outlined in their affiliate agreement) within a certain interval. You have instantly created a fast and almost free sales force with very little money.

Although you may not have the monetary resources available for Amazon.com, you can create this sales phenomenon for your professional services business as well.

Here are the steps you need to take to create your own affiliate program:

1. Find affiliate tracking software. Trying to manually track all of your affiliate sales is simply too much work. Instead, you need to find a software program to help you manage your affiliate program. I recommend the one included with my shopping cart, GetMoreClientsCart.com, which assigns each affiliate a unique affiliate ID that they can use on their websites to make referrals to your website, where the actual sale occurs. Each affiliate is also assigned a unique login and password so they can log into their affiliate account at any time and check their sales volume. Best of all, once you’ve set up your affiliate program, the setup of each affiliate is completely automated.

2. Determine your level of levels. Usually an affiliate program is limited to no more than 2 levels. After two, he begins to take on the persona of a pyramid scheme. The first tier is made up of the affiliates who signed up directly to your affiliate program, and the second tier is the affiliates of your affiliates. For simplicity, I tend to use the 1-tier affiliate structure.

3. Determine your commission structure and rules. Many online business owners spend countless hours wringing their hands over how much to pay in commissions. If you offer too little, no one will be interested in promoting your products and services because the reward isn’t big enough to motivate them. If you offer too much, you feel like you are giving money away. I’ve found that top-tier commission amounts typically range from 25% to 75%, with most in the 35-50% range. Second-tier fees seem to range from 10% to 30%, with most falling in the 20% range. You’ll also need to determine if you’ll pay commissions on products that people buy for themselves through your affiliate link. Many people join an affiliate program for that reason alone. However, if that’s the only reason they joined your affiliate program, they likely won’t make additional sales for you.

4. Create your payment schedule. Next, you will need to determine at what intervals you will pay your affiliates. I have seen some programs that pay commissions on a weekly basis, but monthly payments are the most common. Let your affiliates know what day you determine commission for the month, what your minimum earnings need to be to get paid (ie at least $50 in earnings, for example), and what day you send payments.

5. Determine your payment method. For many affiliate programs that I belong to, I receive a check in the mail for my payments. However, more companies are transitioning to PayPal’s Bulk Checkout feature to pay affiliate commissions. PayPal’s Mass Pay feature eliminates most of the paperwork involved in writing checks, and with a few file uploads, you can quickly pay your affiliate through their PayPal email addresses. To use this service, you must have a PayPal Premier or Business account and you must request your affiliate’s PayPal email address.

6. Provide marketing support. For the greatest success in your affiliate program, you must provide your affiliates with marketing materials to help them promote your products and services. Have a graphic designer create a variety of website banners and buttons that they can use, and you can compose classified ads that they can place in ezines and sales letters that they can use on their site or as an email marketing tool. . You’ll need to create some ethical reminders about email marketing strategies so you don’t associate with anyone who is labeled a spammer. Lastly, give your affiliates access to a set of articles they can use on your site to promote your programs and services, with instructions on how to insert your affiliate link into the resource box.

7. Educate your affiliates. After joining an affiliate program, I often get a phone call from a company’s affiliate manager welcoming me to the affiliate program and encouraging me to contact him if I have questions. However, I do get invited to special affiliate teleclasses/webinars to give me strategies on how to be a good affiliate. You can offer the same conveniences to your affiliates by working with an online business manager/virtual assistant to run this program for you. At a minimum, you can create an affiliate manual that your affiliates receive when signing up for your program, which will guide them through the steps of your affiliate program.

8. Market your affiliate program. Once you have set up your affiliate program, you will need to promote it. Have your MBO/VA look for strategic alliance opportunities. Look for websites that allow you to promote your affiliate program. Post a notice of your affiliate program to your list, on your blog, and on discussion lists where this type of promotion is permitted.

Creating your own affiliate program is a great way to grow your business in a short period of time. You never know: you might be on your way to creating your own Amazon.com!

Copyright (c) 2007 Donna Gunter

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