What Is An Affiliate Program? | Start Entrepreneur Online
Last Updated on January 30, 2021 by Nazif
Affiliate Program are arrangements where an online merchant that’s selling products pays an affiliate website a commission for any sales generated from their referral traffic.
The affiliate website places affiliate links pointing to the merchant’s site to track transactions. Each agreement between an affiliate and a merchant features the commission structure and payout information.
There are three main parties involved:
- The merchant. For example, a retailer selling products.
- The affiliate. For example, a product review website linking to products on the retailer’s site.
- The consumer, who visits the affiliate site, clicks the affiliate link to the retailer’s website and purchases the retailer’s product.
An affiliate marketing program is an electronic program that is based on a revenue-sharing agreement between an advertiser or merchant and webmasters affiliated to the merchant/advertiser or affiliate marketers.
Signing up for an affiliate program essentially means agreeing to a revenue-sharing arrangement that makes you eligible for a commission for every new lead or customer you bring to the merchant.
Typically, as a webmaster or affiliate marketer, you need to complete a few formalities (e.g. filling out a form, agreeing to merchant terms and conditions, furnishing your tax information) to apply to an affiliate program.
Once the merchant approves you as one of its affiliate marketing partners or affiliated marketers, you can start placing the company’s advertisements on your blog(s) or website(s) and through your social media channels.
99.99% of the affiliate programs listed by us and on this page are free to join, which means you don’t have to pay a single cent to apply to these programs.
Although merchants would almost never ask you to pay a fee to become a part of their team of affiliates, they would pay you a fixed amount of money or a percentage of the sales referred by you as a commission.
In some revenue-sharing arrangements, merchants also offer commissions for generating leads (e.g. a visitor to your website clicks on any of those affiliate links and ends up filling out an email capture form on the merchant website) and even for a certain number of impressions/views (e.g. an advertisement is displayed on your site a certain number of times).
Isn’t it interesting? Let’s now delve into how affiliate commissions work.
There are primarily two types of programs: self-hosted programs, and ones in an affiliate network.
First, self-hosted programs run on the company’s website with affiliate software tools. You join these by searching for “Brand + Affiliate Program,” finding their program page, and filling out a form to apply.
On the other hand, a program can live inside affiliate networks — a collection of merchants offering their links in one secure place. These networks let you join new programs in different verticals, view reporting, see your commissions, and grab your affiliate links to add to your site.
With either approach, there are either automatic approvals or manual approvals. Some programs accept anyone; some automatically add you if you hit specific benchmarks. Many programs require an Affiliate Manager to review your application manually.
What Are the Requirements to Join Affiliate Programs?
To join, you need a website and a way to receive money — either a PayPal account or bank account. Although you can participate without a website by adding links on social media, this works best for high-end social media influencers, and I always recommend having a website.
I recommend you have a well-designed website with an SSL certificate installed for HTTPS. You should own a business email address connected to your domain, and have a PayPal account set up.
What Most Important Before Join
Firstly, look for are commission rates and average order value (AOV). Remember, high rates x high average order value = more affiliate revenue. Next, look at the cookie duration and potential earnings per click (EPC).
Here are four things to look for in the best high paying programs:
1. Commission rate.
The percentage of a sale that’s funded by an advertiser to an affiliate for referring a new customer. This percentage can range from the low single digits up to 50% or higher.
2. Average order value (AOV).
The average dollar amount spent every time a customer completes an order. To calculate AOV, divide your total revenue by the number of orders.
3. Earnings per click (EPC).
The income an affiliate earns for each click to an advertiser’s website from an affiliate link. This definition is a little misleading as the true definition of EPC calculates the amount per 100 clicks.
4. Cookie duration.
A cookie is a value stored on an end user’s computer and is used to track affiliate sales. The duration is the length of time the cookie stays on the computer after clicking an affiliate link. For example, with a 30-day cookie duration, this means that if a user clicks an affiliate link and makes a purchase within 30 days, the affiliate receives credit for the sale.
There’s no point in making a 5% commission on a $10 pair of socks. That’s only $0.50.
Alternatively, it would be much better to earn an 8% commission on a $1,200 treadmill and make $96. Since your affiliate website can only generate so much traffic every month, you should promote affiliate products that provide an EPC.
Finally, the last metric to look for is a lengthy cookie duration. Standard cookie duration are typically 30 days. You can find programs as low as seven days and as high as 90+ days. Longer cookie duration are a standard feature of programs I recommend.
Remember, you want high payouts, high AOV, and long cookie duration.
1. You need to promote the products you love and understand.
Web users can spot fake recommendations quickly and want to learn from real-world experience. Therefore, it’s vital to be authentic with your product reviews.
So how do you stay on top of emerging trends in the market and join the best up and coming high ticket affiliate programs?
2. Research emerging categories.
Currently, fashion is the most popular affiliate marketing category, with 18.7% of campaigns, followed by sports, and health and wellness.
Emerging affiliate markets may include virtual reality (VR), Internet of Things (IoT), 3D printing, wearable tech, and drones.
If you fashion yourself a relationship expert or budding love guru, another emerging category is dating affiliate marketing. With the number of dating websites and apps on the rise and competition more intense than ever, dating sites are leveraging affiliates to recommend their platforms and get more users.
3. Mobile networks are multiplying.
Similarly, another big trend is mobile affiliate marketing and CPA networks. Mobile CPA affiliate networks and push notification companies help affiliates push traffic to smartphone apps and mobile platforms.
So we’ve discussed what to look for in the best high paying programs and emerging trends in the industry.
If you ever need a hand or have any questions, feel free to leave a comment below and I will be more than happy to help you out.
Originally published at https://startentrepreneureonline.com on November 9, 2020.