Affiliate programs: Easy Way To Earn Money Online?

An affiliate program, run by a third party or a company themselves, allows affiliates to help advertise that company's products or services. In exchange, the company pays the affiliate a commission fee per item sold.

Affiliate programs are helped by software programs that track every visitor and every sale. They typically include a way for the affiliate to track their progress online

Well, companies run these programs because recruiting affiliates is an excellent way to sell products online. It's a cheap and effective marketing strategy and it's also a good way to get the word out about your site.

There are at least three parties in an affiliate program transaction:

1. The customer
2. The affiliate site
3. The merchant site

In 1996, Jeff Bezos, CEO and founder of Amazon.com, popularized this idea as an Internet marketing strategy. Amazon.com attracts affiliates to post links to individual books for sale on Amazon.com, or for Amazon.com in general, by promising them a percentage of the profits if someone clicks on the link and then purchases books or other items. The affiliate helps make the sale, but Amazon.com does everything else: They take the order, collect the money and ship the book to the customer. With over 500,000 affiliate Web sites now participating, Amazon.com's program is a resounding success.

Over the past few years, affiliate programs have grown enormously in popularity, taking many interesting forms. For many Web sites that don't deal much in e-commerce (selling products or services online) themselves, functioning as an affiliate is a good way to participate in e-commerce.

Affiliate programs are pretty simple in concept, but a lot of behind-the-scenes work is necessary to make them work properly. In order for the affiliates to be compensated, someone needs to keep track of the actual activity surrounding the affiliate's link to the merchant site.

Depending on the arrangement, someone might need to determine:

1. the number of people who click on the merchant site's link on an affiliate site
2. the number of people who end up buying something or performing some other predetermined action once the affiliate sends them to the merchant site.
3. the number of people who see the merchant site's banner link on an affiliate site

Someone also has to keep track of the original arrangement between the merchant and the affiliate and make sure the affiliate receives whatever money is owed to them.

It's a lot of work for merchant Web sites to actively recruit affiliates, and for affiliates to search for affiliate programs they are interested in. Nonetheless, many companies, such as Amazon.com, deal with their affiliates directly because the administration is well worth their time. Even though they take full control over the process, and so determine themselves what they owe, these companies can attract a lot of affiliates because their offer has no real risk or cost: All an affiliate webmaster has to do is put the link up and hope the checks come rolling in. For a lot of Web sites, however, all the work of recruiting affiliates or merchant Web sites is just too time consuming. And a lot of webmasters would rather not rely on the merchant site to tally their own bill correctly!

As we'll see in the next section, affiliate program networks offer an excellent solution to these problems.

Affiliate networks, or "affiliate brokers," act as mediators between affiliates and merchant Web sites with affiliate programs. They track all activity, arrange all payment, and help affiliates set up the necessary links on their Web site. Additionally, affiliate networks help recruit affiliates by including an online merchant's affiliate program in their directory. Different affiliate networks offer different extra features, but most have a help-center and a place affiliates and merchants can go to view reports of their traffic

Affiliate networks are a real convenience for prospective affiliates because they present a wide variety of affiliate programs in one central location. They make it much easier to find a good program that is appropriate for your site.

Becoming an affiliate is relatively easy. Go to an affiliate network site and fill out an online application to become a member. The application will ask for some personal information (name, address, payment method) and information on your site (URL, name, and description of content) and will have you agree to a service agreement. Most affiliate networks are completely free for affiliates.

If the affiliate network approves your application, you can begin picking affiliate programs that interest you. Because so many affiliate programs are free to the affiliate, it's probably in your best interest to steer clear of programs with a charge. Once you've chosen some affiliate programs, the online merchants running these programs will have the opportunity to review your site. If they approve you, the affiliate network will walk you through the process of posting the appropriate links, which come directly from the network's site. They will also establish payment arrangements with you. Because the amount of money you earn per action can be extremely small, most affiliate networks have a set minimum payout amount. This means you won't receive a check until the total money owed you reaches a certain amount. After you have set all this up and the affiliate network has explained its system to you, you can get back to work on your Web site's content and wait for your money to come in.