Part 2 in my series of posts about internet marketing.

Today I’m going to discuss affiliate marketing and explain why it works for both the affiliate and the product owner.  Before I get started understand the relationship of affiliate marketing.  The product owner creates the product and offers a portion of the sale to the affiliate if the affiliate brings them a customer that buys something.  This could be for e-books or physical products, both work very similar in regards to the affiliate aspect.

First lets cover the affiliate.  Why would you want to sell someone else’s product?

  1. You don’t have to be an expert
  2. You don’t have to deal with creating the product
  3. You don’t have to deal with returns / support
  4. You can make good money off someone else’s work!

Let me go over each point to clarify them a little bit.

You Don’t Have to be an Expert- If you see there’s a demand for COGs in the market, but you have no experience selling or marketing COGs, how could you create a product about COGs?  You wouldn’t, you would either find a person that is an expert and has written a book or created a product to fill the niche and offers an affiliate program.  Now they’ve done the work for you and you simply gain a commission.

You Don’t Have to Deal with Creating the Product- As mentioned above if you are not an expert you won’t be writing or creating a COGs product.  Also since you are not an expert you shouldn’t do it anyways.  Why would anyone want a product about COGs from you if you don’t know anymore than they do?  It’s simple that a quality product sells and an inferior product is returned.  So let the expert do it and ride their coat tail to COGs success!

You Don’t Have to Deal with Returns / Support- If you’re not managing or selling you don’t have to deal with disappointed customers.  You simply send folks too a site, and the owner sells them on the product and supports them after the sale (some times even before).  If a customer is unhappy and wants to return the product you DO NOT have to deal with them, you just have to understand that you will lose the commission if it happens.  But your life is MUCH easier.

You can make good money off someone else’s work!- Some affiliate programs offer 3% – 75% commission on each sale.  Why are some so low and other high?  The lower ones tend to be on physical products that have a higher manufacturing cost and lower margin.  The higher ones are e-books that have almost no production cost except the authors initial time.  I think 50% commission is a good starting point for any program.

Now I’ll cover a little bit from the product owner site, why would you give someone money to sell your product when you have the ability to market it yourself?

  1. VOLUME
  2. Marketing power
  3. Reach

VOLUME- If you have multiple people trying to sell your product you have will get more people to your site.  Let’s do the math on it.  If you spend $400 to get 1000 people to your site and 3% buy your $50 product you would make $1500 less your advertising so you make $1100, now lets say you have 500 affiliates that each send 4 people to your site and you have 3% conversion.  You now sell 60 books totaling $3000 in sales.  Take away a 50% commission (for this example) and you have $1500 in profit.  You can see even though you gave away 50% you ended up with $400 more.

Marketing Power- The more people that know about you the more “marketing power” you have.  Now imagine all of the affiliates promoting your product and more people start to hear your name?  You become more and more known in your industry simply because others are talking you up.  Brand is everything, let other build yours!

Reach- With the two items above you’ll see that you have gone from marketing in one or two places (since that’s what you can manage), to possibly being in hundreds: Articles, Blogs, Forums, All PPC engines, 3rd party advertisers etc.  You have now taken your reach and extended it exponentially! You are a marketing Genius!

Well that’s about it for now, more coming soon in Part 3!

If you are interested in an affiliate program I’m putting together check out Produce Money for my affiliate programs.  Currently they are pet centric and I’ve got 4 more products waiting to release in that niche and then I’ll be expanding to more!