Building Wealth on Web

Affiliate Marketing is classified into many types. All kinds fall under two basic categories. These are pay/click and pay/performance.

Pay/Click

It is also called PPC. It is considered to be the easiest and most popular affiliate marketing method. This is the greatest thing for small websites. With this method the affiliate marketer places the banners and text ads of merchants on his website. The affiliate is paid for every click made on these banners. When any visitor clicks on these banners and visits the merchant website, the affiliate gets credited. It is not essential that the visitor makes a purchase. However, the typical earning for a single click is very small, usually less than one dollar.

Pay/Performance

Pay/performance affiliate marketing, also called PPC, is extremely famous among big affiliates and all types of merchants. In this method the affiliate gets credited only when any visitor from their affiliate id performs the required action. This required action may be a purchase or becoming a member of a merchant website. This method is very good for the merchants because they will only pay when they are paid. For affiliates, it is attractive because they are getting a good share in the sales of merchant products. The usual share is about 15-20% of sale.

If we classify the affiliate marketing on the basis of depth, then it can be divided into 3 classes. These are single-, two-tier and multi-tier programs. Another type is the one in which an affiliate marketer is paid for every sale that is made by a person referred by him. This is called residual income affiliate marketing. Let us study these types in detail.

Affiliate Marketing: 1-Tier, 2-Tier & Multi-Tier

In an affiliate program of single-tier nature, the affiliates get the commission, only, for the visitor’s traffic or sales to the merchant’s website. Pay/performance and pay/click fall under this category.

Talking about Two-tier marketing, the affiliate gets the commission for every action done by the visitors referred by him. Plus he will get the profit whenever some other affiliate, referred by him, gets the commission. So in this way affiliate is earning directly as well as indirectly.

The multi-tier marketing is the same as two-tier marketing. But in this type, the affiliates get the commission for the sales made by their affiliated affiliates in multiple tiers. The depth of this type may be unlimited.

Residual Income Marketing

In this type of marketing, affiliates get the commission for every sale that his referred person makes on the merchant website. The only requirement is that on the first time visit, the person should come from the affiliate link of the affiliate. Next time if the same person visits the merchant website, even without using the affiliate link, the affiliate will be paid for every sale made by the visitor. The question that arises is how the merchant will know the affiliate id. The answer is very simple. On the first visit of the person from the affiliate website, a cookie is created on the computer of the visitor. This cookie stores the affiliate id of the affiliate. This cookie usually expires after 3 months. In some cases it may be longer. Whenever a visitor visits the merchant website, the visitor’s computer is checked for the existence of any previously created cookie. If the cookie is found, the affiliate id is retrieved from it and the affiliate gets credited for any purchase made by the visitor.

If you are new in the field of affiliate marketing and your website traffic is not very large, then you cannot make more sales. If you are promoting the products that are low priced, then your monthly income will be very low. Usually the e-books and audio files are one of the lowest priced products which you may decide to sell. The usual sale price of these items is less than $100. This means for every sale, you will be receiving about $20 if the sale commission is 20%. In order to generate some reasonable revenue, many sales will be needed. But it is not possible in case of new websites where traffic is not very large.

On the other hand if you are an experienced affiliate marketer and your website traffic is really large then you can expect to earn a good amount even by promoting low priced products. If the products are hot and your traffic is large, then it is not a problem. For example, if you can sell 100 products, then your monthly income will be $2000 at the rate of 20% sales commission. This amount can be increased if you are promoting more than one product.

Small affiliate marketers should not choose the low priced products to promote. Such affiliate marketers should choose the hot product having a good price. For example, if the product price is $1000 and your monthly sale is 10 products then you are getting $2000 per month at the rate of 20% sales commission. It means that less traffic and sales may reward you more, if you are promoting the high priced products.

But to sell the high priced products requires some extra efforts. Offer some free reports or newsletter or some other useful stuff on your website and store the email addresses of your website visitors. Your offer should be so effective that most of the visitors should give you their email address to take your offer. Now use these email addresses to start your ad campaign. This will result in more traffic to your website. The companies that are making high priced products usually offer the free installations, free maintenance and other benefits to their customers. Study these services in detail and advertise them. Tell your visitors that they will receive the technical assistance after they purchase the product. There may be some other offers like a money back guarantee. Talk to your merchant and get the full details. Then inform your users using your website pages, newsletters and emails. These steps will surely increase your website traffic and number of sales.

The merchants, who are manufacturing low priced products, usually don’t offer extra benefits like a money back guarantee, free installation, technical assistance and free maintenance etc. This is another reason of fewer sales of low priced products.

But if you can find some merchants who are offering these extra services with their low priced products, you can choose to promote their product. But also choose some high priced hot products too. Try to sell them both.

Conclusion

As a conclusion, we can say that usually selecting a low priced product for affiliate marketing is not a good decision, because you are required to make many sales to get generate a good income. But if your website traffic is very large then you can select the low priced products, because you can expect more sales. Selecting a well priced product and starting a good advertisement campaign usually gives better results.