An “affiliation” is a relationship (an agreement) between two parties in which one party sells the products or services of the other in exchange for a commission. A good online affiliation program, even with a competitor, can supercharge sales. The product owner wins with additional sales and the affiliate wins by receiving a commission.
The affiliate does not have to create or transport the product that is sold, or even collect the money. This is all provided by the owner of the product. This is a huge advantage for the affiliate because startup costs are low. The beginning affiliate need primarily only focus on product promotion. In many case, the owner even supplies the affiliate with marketing information.
For sale of goods over the internet, the affiliate provides a URL hyperlink for the customer to click on. This hyperlink links to the website of the owner of the product and has a special code so that the affiliate will get credited when the sale goes through. The credit can range from to 50 percent (or higher) commission, depending on the affiliation agreement.
Some ways for an affiliate to increase sales include:
1) Offer something for free in exchange for the email address. People love to get free stuff and if they like what they get, they may reciprocate at a later time with a purchase.
2) Capture the email addresses to an “opt-in” list. From that list, send repeated emails to increase product awareness and to eventually trigger sales.
3) Market unique products with unique web sites. This provides product focus.
4) Include testimonials from real customers. (Be sure to get the customer’s permission first.)
Advantages for the affiliate include:
1) Low startup costs. The other party develops and produces the product.
2) No inventory. The other party manages that.
3) No handling of the product. The other party transfers the product to the customer.
4) No order processing. The other party sets up the merchant accounts and collects the customer’s money.
5) No shipping costs. The other party gets the product to the customer.
6) No downstream warranty costs. The other party handles all customer commitments.
7) If the product doesn’t sell, dump it and move to something else.
The main advantage for the producer (the other party in the affiliation relationship) is increased sales through increased product exposure.
A properly implemented online affiliation program really is a win-win for both the producer and the affiliate.