Building Your Own Affiliate Program

Once you’ve finished the links campaign for your informational site, it is time to get your affiliate program running on your product site. An affiliate program is simply web based software that tracks the source of referred visitors to your site through cookies and databases, and then connects with your shopping cart to calculate commissions to the referring affiliate when a visitor they referred in the past ends up purchasing your product(s).
As stated above, affiliate programs have been very useful for Internet entrepreneurs. It seems that not a single successful online company is without one. Between August 2001 and November 2001, I was able to build approximately 1200 affiliate partners for the nutraceuticals company I worked with. By March of 2002, these partners were bringing in over $45,000 in additional sales to the company each month. The company was able to greatly expand its sales reach and position itself on thousands of related web sites all without spending any money in advertising costs until the sale had already been made.
The first step in launching your program is to obtain affiliate software. I have used three different software packages in the past, AssocTrac, My Own Affiliate Program, and a custom-developed package by Preation, Inc. For a list of my current recommendations for affiliate programs and other software, you can visit http://www.zeromillion.com/webmarketing/web-marketing-software.html. You can expect your affiliate software to cost around $1000 plus a per month fee. While it is not inexpensive, if you can properly build and promote your program your return on investment will be many times this amount.
Once you’ve purchased your software, installed it, and ensured that it works with your shopping cart and merchant account, you’ll need to decide on the level of commissions you will pay. Most programs pay between 15% and 35% of each sale. Keep in mind that the higher you pay out, the more affiliates you will attract. However, if you are losing money on each sale, it will not matter to you how many affiliates you have. Once your commissions are set, you’ll need to create banners and images for your affiliates to use. If you are not good at graphic design, send an email to info@virante.com and I’ll refer you to my top designer or you can visit www.guru.com, www.smarterwork.com, or www.elance.com to find freelancers. You’ll also need to create a guide explaining how to link to your site, instructions on how to view sales statistics, a sign up form, and sales copy encouraging affiliates to sign up. When you have all this done and have tested everything, you can begin to promote your program.
To promote your program, follow the same general method that was used in contacting link partners. Use the search engines to find related web sites and contact them via email and phone to encourage business owners to partner with your company.  You can also use automated software that will go through the search engines for you to build a list of related sites. Once you have this list, contact the potential affiliates. Encourage them to learn more about your program at your site. And, as always, be sure to follow-up about a week later. One often gains more affiliates on the follow-up that the initial contact. Many affiliate program owners have a great affiliate program but fail to promote it. During the eight to twelve weeks you are waiting for your search engine rankings to come in, it is a great time to promote your affiliate program. You should be able to build at least 200-300 affiliates during this time frame, depending on your product and the commissions you are offering. This should be enough affiliates to get a steady stream going of a few sales each day.
Once you have a couple hundred affiliates and a few months of data, you can go after larger partners that can bring in $10000 per month or more in sales. First, determine what your overall visitor to sale conversion rate is on your site. Using this data, figure out the average payout per visitor sent to you. If you can show empirically that it makes financial sense for larger companies to partner with you, you’ll have a much easier time convincing Boards of Directors to take on the risk and establish an alliance with your company.
To establish these larger alliances, you may have to increase your commission, sign contracts, guarantee minimum payouts, and get on planes. Do whatever it takes within the realms of profitability.