If you want to become a part of an affiliate program you need lots of traffic. If you have a busy site or a large newsletter you can start earning money right away!

But if you are a new site, a low traffic site, or are starting from scratch, you have a long road ahead of you – so be aware of that. If you are starting from scratch you may be better off developing your own product or service and selling it. Remember, when you sell your own product, you keep all the profit… when you sell someone else’s product, you only keep a portion of the profits.

That is not to say that if you are starting off, you should not join an affiliate program… just realize it may take a while to generate some income as you have to promote it and build traffic just like you would if you had a website with your own product or service.

On that note, an affiliate program may be a great option if you don’t have a good product or service to sell online and need one. Just find an affiliate program for a product or service you love and would feel proud to sell (just remember to follow my “rules” when picking an associate program to join… these are in an article ahead in this newsletter).

The beauty of affiliate programs is that they are “no-brainers”. What I mean by that is if you have a lot of traffic to your site, all you have to do is post a banner or text link to another site (because you are part of their affiliate program) and earn a referral fee for every sale which is generated. There is no customer service, no credit cards to charge, no shipping of orders, no inventory, no administrative problems, no employees, and no headaches.

The company takes care of all that for you – you just refer people to them, then they take care of all the rest and cut you a check every month. Pretty great isn’t it? You’re right, it is! But be careful, as we will discuss throughout this article, getting involved with the “right” affiliate program is your key to making money.

Let’s move on, as we will talk more about that later.

Making money with an affiliate program is a numbers game!

Basically what you are dealing with here is that out of the people who visit your site or out of the people who subscribe to your newsletter you may get a 1% to 20% click-through ratio (this range is so wide because it depends on the product interest, how you link to them and the power of their slogans or banners). In other words, 1% to 20% of the people will actually click through the banner or text link you have provided and visit the affiliate program site you are recommending.

Of the people who click through, only 1% to 2% of those will actually buy. So you’re working on a numbers game here. To generate good income from an affiliate program, it’s all about having a large number of visitors to your site or a large number of subscribers to your newsletter.

Let’s look at an example. Let’s say you are getting 1000 visitors to your site a month and you post a banner ad (which generally has a low click-through) or you post a text link. Just for the heck of it, let’s say you get a 5% click-through (which is high by the way). That means out of your 1000 visitors, 50 of them go to the affiliate program site by clicking through on the banner ad or text link, which you posted.

So now you have 50 people going to your affiliate program site. Out of these 50 people probably only one will buy, IF THAT!

If you get a commission of $10.00, $20.00, or even $30.00, depending on what kind of commission and payout they have, you are getting paid $10.00 or $20.00 or $30.00 per 1000 impressions you make of that banner or text link.

In other words, for every 1000 visitors you get to your site you make $10.00 or $20.00 or $30.00!

That’s it! That’s the reality and you have to look at it from that angle. Don’t think that because you are getting 1000 visitors to your site, (that is to your site, not to the affiliate program you are recommending), that you are going to get $500.00 a month from your affiliate program. You won’t!

Here is a little tip: a good company with a good affiliate program will have about a 0.5% to 1% visitor-to-sale ratio. It is sometimes better than that (and many times worse, if you hook up with a poor company), but that is the average. So for every 100 to 200 visitors you sent them, one will purchase.

If you are finding that you have to send 500+ visitors to a site to get a sale, then re-think your participation in that affiliate program. Let me go into a little more detail. If you were getting paid a $100 referral fee per sale (so for every 500 visitors you send them you get $100 on average), that wouldn’t be so bad. But if you are getting paid a $10 referral fee per sale, you want to re-think your participation in that program, as mention above.

Before you join any program, ask the questions listed below and check out the various programs, which are available for you to join.

Get ANSWERS to the following questions before you join:

  • How long has this affiliate program been in place?
  • What form of compensation is offered? In other words, are you getting actual cash , are you getting credits for your product, are you getting free AirMiles — what are you actually getting?
  • Is there a set up fee? If so, how much?
  • What kind of associate tracking software is being used?
  • How are referrals tracked? Do you get credit for every single sale you refer to them?
  • Is there third party auditing? If not, has the company you are dealing with been in business long and are they reputable?
  • Does their tracking software use cookies? CGI? Is it hidden in form fields? Is it a database?
  • Do associates get credit for the sale after a visitor comes to the site and doesn’t buy, then leaves and comes back to buy at a later date. How long is this in effect for?
  • Can you stop the agreement at any point? Do you have to take special steps to get out of the agreement?
  • Does the legal agreement bind you to any other responsibilities?
  • Under what circumstances can the Program remove you as an associate?

These are THINGS YOU WANT TO LOOK FOR in an Affiliate Program:

  • An affiliate program that is successful at what they do.
  • An affiliate program which offers great value, a great product or service, and more importantly, great customer service!
  • Make sure the affiliate program has a great tracking mechanism so that you get credit for every sale
  • Look for a Program, which tracks every sale in real time so you can see your results instantly.
  • Make sure the affiliate program has a good-looking website, which pleases customers, is easy to navigate, and offers great information to the visitor.
  • The Affiliate Site must be able to turn visitors into sales, because you can send them all the visitors in the world, but if they don’t convert visitors into sales you have just wasted all your time (as you are not going to make many referral fees

Val Popescu
SEO Expert and Internet Marketer
Owner of The Internet Marketing Profits Center