Affiliate Internet Marketing - The Basics

The basic relationship between you, the brokers and the merchants are illustrated in the image below. Although in-house or privately operated affiliate Internet marketing programs are becoming more and more common, typically, you will have to sign-up with one or more broker(s). These brokers are also referred to as Affiliate Networks. The broker will provide you with links to it's merchant site. The Networks also provide a wide range of statistics and metrics - this is very important for you to gauge how merchant links are performing.

Remember: You should never have to pay for the privilege of joining an Affiliate Network!

As you can see, this is not a great arrangement. In some cases, the merchant will run an "in-house" affiliate program.

In any case, here is generally how things work:

1) You join an affiliate program (brokered or in-house)

2) You create a website where you place links to the merchant. These links contain your affiliate ID so that the merchant knows who gets the commission for any sales.

3) When your "surfer" or traffic clicks on the link on your Web site (this is called "Click Through"), it places a cookie on their computer. If a purchase is made by this compute within the duration of the merchant cookie, then you get a commission! This is the 1st place where things can go wrong. If the person clicking through your site has disallowed cookies, you will receive nothing! The duration of the cookie is important. Some merchants expire the cookie after just 1 day! This makes it very hard to get repeat sales. Some last as long as 120 days - very nice indeed. The average is 30 days. Stay away from vendors with short cookie durations.

4) Usually, the link has a tracking pixel/image (1 pixel by 1 pixel) next to it on the page that will register every time the ad is displayed. This will help you to know how many times an ad has been viewed. Statistics are everything in the affiliate game!

5) The average conversion from clicking an affiliate link to making a purchase (and this is a very rough estimation) is around 1%. That is for every 100 clicks, depending on the product/merchant, you will see commission for 1 sale. If this is not the case, either you, the ad or the merchant are doing something wrong. Allow between 100 to 200 clicks on a link - if it fails to perform (make a sale) then remove it and find something else.

6) Most affiliate programs require that you build up a certain amount of earned income before you get paid. This is usually $25 to $50. Once the sale has gone through and the merchant has been paid, you and the broker get paid. Some merchants hold back until they ship or even a month after they ship to allow for returns - this is normal (but a pain).

To recap and fill in the gaps:
1) Find quality in-house affiliate program and/or a good affiliate broker
2) Find merchants with long cookie durations, that allow multiple purchases per cookie, have good percentage commission (10% or more), offer performance incentives and merchants with a good record for publisher relations and most of all merchants that pay!
3) Review your site stats to know where your traffic is coming from, what links they click and what they buy.
4) Get rid of dead wood - under or non-performing links waste your time and money - get rid of them!
5) Focus, focus, focus on your target market - what ever it is...