Jump into E-Commerce Action with Affiliate Programs

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by Riyaj Shaik

As you probably know, the e-commerce industry is growing at an exponential rate. If you are not already part of the exploding e-commerce action, you are missing out on your piece of the pie.

Until now, one of the major reasons for people to miss out on e-commerce action is that they didn't have an online store or product to sell. Now, they can jump into the action with affiliate programs. Affiliate programs are also known as associate, commission, referral, bounty and partner programs.

Affiliate programs let you sell products for popular online merchants, such as Amazon.com, Reel.com, Beyond.com, and many others from your web site, and in return, get paid a percentage of your sales as commission. Usually, you earn an average of 10-20% of the sale.

There are several different types of affiliate programs. Some examples are:

1. Pay Per Sale:
You get paid a commission for each sale you generate. If you refer a visitor to the merchant's site and s/he makes a purchase, you get a percentage of the sale as commission. Depending on the merchant, the commission may be for that purchase only, for all purchases that customer makes within a fixed period of time (usually six months to one year), or for all the purchases that customer makes in his or her lifetime.

2. Bounty:
You get a one-time bounty payment for the customer you referred. You will not get commission on any future purchases that customer makes. Usually, companies pay a bounty of $10-$20 per customer.

3. Pay Per Click:
You get paid for every visitor you send to the online merchant through a banner or text link, regardless of whether or not a sale is made. Usually, companies pay $0.05 - $0.10 per click, per visitor.

4. Two-Tier Programs:
You get commission on direct sales that you generate, plus you get commission on sales generated by affiliates that you recruit. Companies typically pay 15% commission for direct sales and 5% for sales generated by the affiliates you recruit.

5. Pay Per Lead:
You get paid a one-time fee for generating a lead for the merchant. Similar to a bounty program, you usually earn $2-$5 if the visitor you referred fills out a questionnaire or an application.

Affiliate programs are the wave of the future. Many companies that sells goods, products or services online are realizing the benefits of affiliate programs. Hence, the number of affiliate programs is increasing at an exponential rate.

According to Jupiter Communications Inc., affiliate programs will directly account for 11% of the $5.8 billion in consumer transactions over the web this year. That figure is expected to grow to 24% of $37.5 billion in total sales by 2002.

"If you don't have a product or service, but still want to get in on the e-commerce action, consider an affiliate or associate program," says Gordon Whyte, editor of the E-commerce Guide at About.com (formerly the Mining Co.).

All a site owner has to do is add a link to an online store and earn money from every click or referral that leads to a sale.

The most notable example of an affiliate program is probably the Amazon.com Associate's Program, which has more than 300,000 affiliated web sites. Each affiliate earns commissions of up to 15% on sales of books and audio CD's - for simply enticing online shoppers to click over to Amazon.com and buy something.

One of the most frequently asked question about affiliate programs is "What is the best affiliate program"? The correct question should be "What is the best affiliate program for my site"? There is no one affiliate program that can be said to be "the best."

How an affiliate program performs for you depends on your site and your traffic. If your site is about the Grateful Dead and you try to make money by joining an affiliate program related to Internet marketing, you probably won't have much success. But if you join an affiliate program like CDNow and promote music CD's, then you can expect a much higher success rate.

So, why wait? Jump into e-commerce action with affiliate programs. Get your piece of the pie. Be sure to select programs that are offering services and products that are of interest to your visitors. Then, try a few different types of affiliate programs and see which ones produce better commissions for you, depending on the nature of your site and your visitors.