Can your business profit from affiliate marketing? Yes. Get started NOW!
How would you feel if $$$ showed up in your bank account – with zero effort from you?
If you're like most people, you would be thrilled to have this truly passive income. It's called affiliate sales, something that most businesses can add to their sales and marketing.
Affiliate sales involve other people selling your product or service. You pay them a commission, and you gain a new customer.
This can be a real win-win: you get sales you might not otherwise get, and the affiliate makes money from selling your product or service.
What are the advantages of affiliate sales?
- You make sales without paying for ads and with zero risk of losing money.
- You gain partners eager to promote your business to their customers.
- You get access to a wider audience eager to buy what you sell.
Here’s how an affiliate program typically works.
- You create an affiliate offer. You might bundle existing products or services or develop products or services only available through the affiliate offer.
- You set up a tracking method to make it easy to track sales – for both you and the affiliate marketer. Each affiliate partner gets a unique link to track their sales.
- When the affiliate partner sends people through their link, the affiliate partner gets paid when the sale is complete.
You will make the most of your money through an upsell, cross-sell, or bundle of products these new affiliate customers buy.
If the affiliate offer is for a diet book, you might offer a bundle deal that includes monthly group coaching and exercise.
The affiliate makes money from the diet book, and you make money on the coaching.
/>
How do you attract affiliate sellers? Structure an enticing payout when they make a sale.
A percent of sales is typical and can range from 5-15% up to 100% of the sale.
Wait…100% of the sale? Why would you pay an affiliate partner 100%?
Because the lifetime value of a new customer might far outweigh the initial sales commission you pay.
Always remember that the customer is buying your product or service. They are now your customer.
Positives of an affiliate program.
Increase your reach: Adding an affiliate program can bring new sales from audiences you might not otherwise reach.
It’s cost-effective. You don’t pay anything directly to acquire a customer. The affiliate pays for all the marketing and outreach.
Small niches (think French bread baking or raising vegan children) can do surprisingly well as affiliate products.
Low-priced offers can do very well as affiliate products. Many affiliates sell to cold traffic, so low-priced offers are easier to sell.
It’s performance-based. You only pay when the affiliate makes a sale.
You have a fixed cost – the affiliate payout - for sale.
Once the customer buys your product from the affiliate, they are your customer. You can continue to sell them other products or services.
Even offering a high affiliate payout of 50-100% of the sale can still be lucrative.
If the customer's lifetime value exceeds the initial cost of the affiliate payout and you have several other products you can upsell or cross-sell, paying a high commission can make a lot of business sense.
Easy to track the sale. Once you set up the program, you know which affiliates are making sales and how much they sell.
Negatives of an affiliate offer.
Setting up and managing an affiliate can be complicated. It’s best to pick a platform already set up for affiliate marketing such as Warrior+ or Clickbank.
You don’t control how the affiliate markets and sells your product or service.
You have less control over branding and messaging.
There is a risk of fraud. You will need to monitor affiliates. The risk is less when you use a purpose-built platform like Warrior+ or Clickbank.
Loss of control. You don't control how well it sells once you turn a product or service over to affiliates.
Payment fraud. Until you and the affiliate have a good track record, you can hold off paying affiliates until after your return period ends.
Holding back payments prevents fraud and chargebacks. Some affiliates will not want to wait and may promote other offers.
Most affiliate platforms handle digital products such as software, ebooks, music, and things that can be downloaded.
You can list your digital offer on affiliate management sites such as ClickBank, Warrior+, Commission Junction, Gumroad, or any of the dozens of affiliate platforms.
All these platforms will handle delivering your product and tracking your affiliate sales.
Many affiliate programs let you instantly sign up and promote your digital offers.
If you sell digital products, consider adding affiliate sales.
If you don’t already sell digital products, brainstorm ideas for what product you could sell as digital.
Let’s say you sell irrigation systems.
This business is not a great candidate for digital.
But what if you can sell what you know about irrigation systems? Can you put together a training course for other pros?
Could you write a how-to e-book for do-it-yourselfers? Package your knowledge and reach a new audience through digital sales and affiliate marketing.
Affiliate sales are not limited to digital products.
You can still sell affiliate products if you have a physical product, a high-ticket or high-touch service, or a brick-and-mortar store. The affiliate process will work roughly the same: an affiliate partner refers prospects directly to your business – but you will manually credit and pay the referring partner.
Platforms such as Amazon, Walmart, eBay, Target, Etsy, and Home Depot let users list products for sale.
The downside is that your business will need a system to manage inventory so you can smooth out your order process and keep out-of-stock issues to a minimum for your affiliate sellers.
Caution: race to the bottom pricing ahead.
When some small business owners think of affiliate sales of physical products, they think of Amazon. Amazon controls a significant portion of the US and European online shopping markets.
Other markets, such as Walmart, Target, Etsy, and Home Depot, are happy to sell your physical products to affiliate sellers.
But a big note of caution here.
The online merchants who host your affiliate sale are not necessarily your friends.
The online seller's pricing structure and competitive algorithms can make product pricing a race to the bottom. If competitors start seeing your success, they may try to copy your product and undercut your prices.
Or they may buy their way to the top of the search page as a recommended product.
You must ship inventory to their warehouse to take advantage of online sellers' logistics and shipping.
Your money is tied up in products sitting on warehouse shelves. You can directly ship yourself, but most businesses don’t want the aggravation and expense of managing their shipping.
Some people have found success selling physical products using online retailers.
But I suggest that you approach this with your eyes open.
If the product does well and gets the online platform's attention, they may create their own version of the product and beat any price you may be able to offer.
How to be successful selling physical affiliate products online.
Sell a unique, hard-to-find, or hard-to-duplicate product. Selling commodity items (dog leashes or computer monitors) means a constant race to lower your prices. You can overcome this by selling unique products not easily sourced elsewhere.
Commit to keeping inventory in stock – or creating FOMO. Your non-commodity product should either be readily in stock or sold with the idea that if a customer misses this item, another one may not be readily available. FOMO (fear of missing out) is your friend.
Let’s go back to the irrigation business.
What could affiliate marketers sell for your business?
Can you set up affiliate marketing for high-end or hard-to-source parts?
Can you sell consultations? Can you offer additional related items, such as garden furniture?
Here are some other ways to sell physical affiliate products.
Brick-and-mortar local sales: If you want to try affiliate marketing on a smaller, more local scale, give your affiliate partners special coupons or cards with unique codes.
Typically, the code or card gives the customer an incentive, such as a discount or extra product. The affiliate partner offers these cards to their prospects.
When the customer buys with the code, the affiliate gets the commission.
There needs to be a lot of trust on both sides, but it is a low-tech way to do local affiliate marketing.
Find complementary businesses to sell to each other’s customers. Let’s say you sell auto parts. A complementary business could be an auto upholstery shop.
You can each sell affiliate products or get a referral fee for the others’ businesses. You both reach new markets and sell products that work together.
If you want to sell physical products, you can find affiliate software to track your sales or go old-school and manually track unique codes.
Affiliate marketing takes time to set up.
You must find the right offer and the right affiliate partners. But it can be a way to reach a much larger audience than you would on your own and make money with little or no effort or cost.
Take action TODAY. Download the worksheet.
Taken from Profit-ize Your Business Book One: Marketing Strategies for Business Growth.
Like this post? It was taken from the Profitize Your Business series
