Want to wake up to more money in the bank? Consider adding affiliate marketing.
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; most businesses can add it 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 that are only available through the affiliate offer.
For example, 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.
You structure an enticing payout for the affiliate marketer. 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 a new customer's lifetime value might far outweigh the initial sales commission you pay.
Never forget that the customer is buying your product or service and is now your customer. You are getting PAID to get a new customer.
How does the affiliate get paid?
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.
The affiliate partner sends people through their tracking link. When a sale occurs, the affiliate partner gets paid the agreed-on commission. Their part is complete.
Your business gets the remainder of the sale price, and you gain a customer.
Where is the real money made?
Your business (and perhaps your affiliate seller) most money through an upsell, cross-sell, or bundle of products these new affiliate customers buy.
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 can do very well.
Your niche business (think vegan baking) 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. While you may not make a lot on an individual sale, you will make it up in quantity - and in long-term sales to your new customers.
It’s performance-based.
You only pay when the affiliate makes a sale. The affiliate marketer pays the marketing costs to find new customers. They send the emails and pay for any ads.
You have a fixed cost.
If they sell your $100 product and you pay a 50% commission, you each make $50 on the sale. Your cost is limited to the affiliate payout.
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.
Once the customer buys your product from the affiliate, they are your customer.
You can continue to sell them other products or services. The new customer is your customer.
It's easy to track the sale.
Once you set up the program, you'll know which affiliates are making sales and how much they sell.
You can continue to work with affiliates who perform well and may want to consider a partner relationship or joint venture.
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.
These platforms take a commission on the sale and manage the tracking.
You don’t control how the affiliate markets and sells your product or service.
The affiliate will present your offer to their list without your input regarding their copy, images, or selling message.
You can provide affiliate marketing materials such as email copy, images, and landing pages, but the affiliate marketer is not obligated to use any of it.
Because of this, you have less control over branding and messaging.
There is a risk of fraud.
You will need to monitor affiliates. While most affiliates are honest and hard-working, a few will always try to inflate their commissions with fake sales.
The risk is less when you use a purpose-built platform like Warrior+ or Clickbank, which acts as a middleman for delivery and tracking.
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.
Loss of control.
You don't control how well it sells once you turn a product or service over to affiliates.
Affiliate products are mainly digital.
Most affiliate platforms handle digital products such as software, eBooks, music, and things that can be downloaded.
Listing your digital offer on affiliate management sites such as ClickBank, Warrior+, Commission Junction, Gumroad, or any of the dozens of affiliate platforms is fast and convenient.
All 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.
But what if your business doesn't have digital products?
Let’s say you sell irrigation systems.
This business would not appear to be a great candidate for digital products.
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.
Should your business consider adding affiliate products?
Yes: If you already have digital products or could easily package your knowledge to sell.
Yes: If you have a product bundle or more products to sell.
Yes: If you are willing to give up some profits and pay a commission to gain new customers.
How could your business add affiliate marketing?
Taken from Profit-ize Your Business Book Three: Pricing and Affiliate Marketing
Like this post? It was taken from the Profitize Your Business series
