Thursday, February 10, 2005
Affiliate Programs - the money spinner of the Internet
1. Sell your own product or service.
2. Sell someone else's product or service for a commission.
Sell your own product or service online.
Selling your own product or service is not as easy at it sounds. All the normal business challenges apply to online businesses just the same as an offline business.
1. You need to advertise to get customers to even look at your offering.
2. You need to manage your stock.
3. Logistics of shipping your goods to the customer.
4. Procurement of goods including tax management.
6. Your site needs hosting, just like a real business needs a physical address.
7. You need to keep and manage proper customer records.
8. Management of complaints and return of stock/refunds.
Sounds like hard work eh?
All an online business gives you, that a traditional business does not is
1. A shop that is open 24 hours a day.
2. A shop that anyone can go to without leaving the comfort of their chair (anywhere in the world.)
These are both great things but they come with their own challenges.
Wouldn't it be nice if you could run a store and not have to worry about the shipping, stock management, merchant facility etc.
Well you can! and that is what thousands of people are doing right now!
Sell someone elses product or service for a commission.
Merchants are realizing that getting their advertised message through to their targeted audience is not easy at all. It is time consuming and expensive.
That is why the idea of commissioned sales force has become synonomous with Internet marketing. Individuals (often customers of a merchant) join the merchants affiliate program and are paid a commission for adding value to the merchant.
This is nothing new however. All the herbal companies have been doing it for ages. Have you received any little paper handout lately that request you to go to something like www.Loose-12kg-in-12-weeks.com" and on the back you can go to "www.make-money-from-home-using-your-pc.com". One side is the product that will make you slim, the other side is a sales pitch to recruit you into their affiliate program.
There are basically 3 categories of affiliate programs:
1) pay commission per sale of merchants product or service
2) pay commission per lead when your refer a potential customer (someone who actually signs up or leaves a contact details)
3) pay per click when you refer a person to visit the merchants website. (usually a very small amount)
The programs can have sliding pay structures, minimum cashout levels, bonus incentives and more.
Some programs known as Multi Level Marketing (MLM) Programs pay the affiliate commissions based not just on the activity the affiliate does but also any activity anyone the affiliate has referred does. So If Tom is earning 50% of every sale he referres, and he refers Mike who also signs up for the affiliate program. Then Tom might earn 5% of every sales Mike makes.
The affiliate programs are often free to join, but the commission that can be earned or the incentives offered are limited unless you upgrade to a paid affiliate membership.
So the challenge is obviously to get people under you (downlines) who will work hard to make sales and build their downlines. Eventually you can sit back and receive a passive residual income without doing much at all.
This is where SpinningTornado targets its service. SpinningTornado is the worlds first customer acquisition Exchange and Customer Reciprocation portfolio management system allowing you to join the program you want to join and receive a downline in return. I'll join your program if you join mine.