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How To Identify Profitable Affiliate Programs (Part 1)

You see them everywhere... affiliate programs. They're a dime a dozen now days. With so many companies launching affiliate programs, how can you tell which ones might actually help you make money?

This is part one of a two part series, in which we help you to determine which affiliate programs could be the most profitable for you. So, let's jump right in!

1. How long has the affiliate program been around? A new affiliate program is not necessarily a bad thing, but unfortunately they may still be working out some kinks. And they might not have much in the way of promotional material for you to use. An established affiliate program on the other hand, will usually have payment schedules, tracking statistics, and ad creative down to a science.

The longer a program has been around, the better the chances are that it is successful too. A program like ScamFreeZone (which I had used as an example in the first draft of this article) was around for three years, but it has disappeared and the owner has found a new kind of businesss. Lesson: don't put all your eggs (hopes) in one basket.

2. How much commission can you earn? Many affiliate programs pay very little -- some as low as 2%! Others offer outrageously high commissions... up to 75% in some cases. Why such a huge difference? Usually, it's related to the products or services being offered. Unfortunately, the commission structure can cause unbelievable headaches for affiliates, and can even cause a program to fail too though. Let me explain.

A company which sells products or services with a 30% profit margin, might decide to only offer 10% affiliate commissions. This, in their mind, is safe, because it allows the company to generate enough profit to continue operating. Another company however, might decide that paying affiliates more money will make them grow faster, so they'll decide to offer a 25% commission... leaving themselves with only 5% profit. With very little potential for profit, a company is much more likely to fold, or at the very least close their affiliate program.

Now, most companies won't share their profit margin details with you. There are things you can do though, that will help you get a better gauge of how stable they might be. The owner of the ScamFreeZone's Internet Success Program actually shared his own profit margin. Browsing his website at the time I learned that he have one or more offices to maintain, no employees to pay, so no executives or board of directors siphoning off profits. So, do a little research. Dig into the company's website and see what you can find. If you're still not sure, try asking them! Just send a brief, polite email... you never know what they might be willing to share.

On the affiliate side of things, the commission structure can be a headache. If for instance, you join a program which pays just 2%, you'll only make $2 for every $100 in sales. If you're paid 10% commission, then you'll get $20 for every $100 sold, and 50% will get you $50 for every $100 sold. Now, at first glance, it looks like you'd choose the highest commission offer, right? But you have to look at the products too. If you're only able to sell $100 every six months, then you're not making much money are you? If on the other hand, the smaller commission offer is much easier to sell... say for example you can sell $1000 worth of stuff every month... then you'll make more money in the long run with the lower commission structure.

So, try to weigh the long-term value of a given commission structure, with both stability and profitability of the company, before choosing which program to join.

3. Would you use the products? This may seem like a strange question, but the answer can actually determine how successful you might be with any given affiliate program. You see, if you really like something, really believe in it, that is going to show every time you talk about it. You'll find yourself writing articles or testimonials to use on your website... if you really like a product. You'll find yourself referring to something you personally use, or found useful, just in casual conversations. And those casual conversations, or brief mentions on your website... they can turn into sales. Sales that you'll make commissions!

Yes, it is in the middle of all this stuff you begin to realize that you should maybe stop to learn some good marketing or promotional skills.

In Part 2 of this series, we'll tell you:

-- Why the number of products or services being offered can make a huge difference in your earnings. -- Show you how there may be more than one way to make money with the same program. -- Tell you what to look for, and what to be careful about, in the affiliate program's communications. -- And more.

Back to New-to-Net (index).

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Ruth Marlene Friesen

Ruth Marlene Friesen
The Responsible One

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