In This Chapter

So far in this book I’ve focused primarily on selling products and services that you must provide in some manner to your online buyers. But that isn’t the only way to make money with your website. In fact, you don’t have to sell anything at all—at least not in the traditional sense. If your website is popular and gets lots of traffic, you can do very well by either recommending affiliate products to your website visitors, or allowing other companies to place ads on your web pages, or both.

There are numerous examples of web-based business owners who have generated enviable incomes entirely through affiliate products and advertising. And even if you do plan to offer your own products and services, this chapter will enlighten you on how these two revenue channels can provide a great secondary source of income.

Chances are, you’ve been on the buying end of an affiliate transaction and didn’t even know it.

Say you’re a running enthusiast preparing for your first marathon. You want to learn more about how you should train so you Google “marathon training programs” and visit several websites. One of these sites contains great articles and free training programs that you can download. You hit the how-to information jackpot!

As you explore the site, a book recommendation for a beginner’s marathon training guide catches your attention. You click on the link, are taken to an Amazon.com page, and place an order.

You may not have realized it at the time, but you just earned that website owner some cash. He is an Amazon.com associate (their preferred term for affiliate) and the link you clicked on is an affiliate link. That website owner will be paid a percentage of the purchase price of the book you just bought.

The website owner generated income—without having to stock or deliver the product, deal with the financial transaction, or handle any aspect of the shipping and after-sales service.

Sounds like a good deal, doesn’t it? And for the most part it is. But there are some important pros and cons you need to consider before you decide to promote affiliate products or place advertisements on your website. Before we get into that debate, however, let’s take a look at how affiliate programs work.

Say your website sells custom embroidered knitted sweaters. You make and ship those sweaters yourself; however, you notice that a lot of your customers are asking you about knitting books and supplies—products you don’t sell. Your customers are buying these somewhere else, which means that potential profits are literally clicking away from your website.

How do you remedy this? That’s simple. You find a website that sells knitting books and supplies and you sign up for their affiliate program. You create a special page called “Stuff For Knitters” and feature a list of their products (being sure to use the affiliate links that the company has provided you with). Then when a customer visits your website to buy a sweater, they can also review the knitting books and supplies and purchase some of those, too.

The cornerstone of an affiliate program is the affiliate link. This can either be in the form of a simple text link that you put on your web page or in your e-mails, or an online advertisement (often referred to as a banner). It can even be in the form of a small online video—similar to a television commercial—an Internet advertising format that has recently become popular.

For example, if you were an affiliate for my how-to guide Pricing Your Writing Services, you could either mention it on one of your web pages like this:

Or you could place an advertisement on your website like this:

In either case, the embedded affiliate link would be the same; a special link that, when clicked, takes the website visitor to my site to learn more about the product and (hopefully) place an order, and tracks that activity so that you get paid your commission for the sale.

Generating revenue with affiliate and advertising programs seems so simple, especially when you compare this approach to the complexities of sourcing and selling your own products. But before you consider stuffing your website with affiliate links and banner ads, you first need to carefully weigh the pros and cons.

Let’s start with the advantages.

It takes virtually no time at all to start selling affiliate products. Once you’ve signed up for a program and received your affiliate links or banners, all you have to do is place them on your website or in your e-mail newsletter. You can be up and running—and possibly even making money—in less than an hour.

Some affiliate programs even have special programs that automatically post relevant advertisements on your web pages. You just plug in the snippet of code that the affiliate program provides you, and they handle the rest.

In addition, you don’t have to worry about the traditional headaches associated with selling your own products and services. You don’t have to accept payment. You don’t have to deal with credit cards. You don’t have to stay up late at night wrapping parcels and filling out courier waybill forms. The company with the affiliate program takes care of all those pesky details.

Finally, affiliate products can fill gaps in your own product line. If you sell coffee beans online but not coffee machines, you can sign up as an affiliate of a coffee machine company. Your customers probably shop for this equipment anyway. Why not earn extra money pointing them in the right direction?

But before you get too excited, there are a couple of important disadvantages you should consider.

First of all, affiliate products are, of course, not your own. But your website visitors may not see it that way. If they clicked a link on your site to purchase a product and become unhappy with the quality or after-sales service, they might blame you. Sure you can explain, “I’m just an affiliate!” But by that time you would have already been tarred with the same brush. That’s why it’s important to select only those affiliate products that you can recommend with confidence.

Secondly, when a customer clicks on an affiliate link on your website, guess what happens next? They get taken to someone else’s website business! (Internet marketers call this “click and bye.”) Will they return to yours after making the purchase? Maybe. Maybe not. So an affiliate link is not just an income generator, it’s also an exit sign.

Yet, despite these disadvantages, it makes sense for most website businesses to offer at least some affiliate products in the form of links or advertisements. You just need to select affiliate programs carefully to ensure that the recommendations you’re making to your website visitors reflect positively on you and help to build your business.

There are tens of thousands of affiliate programs on the Internet representing millions of products. Finding the best ones for your website can be like finding toothpicks in a haystack (which, by the way, is a lot harder than finding needles!). Where do you start? Your first step is to decide what types of products you want to recommend or advertise.

Take a look at your website product offerings. Are there gaps in your product line that need to be filled? One of my website businesses, ForCopywritersOnly.com, offers e-books, courses, and other educational materials for freelance copywriters. I have developed a lot of my own products; however, one product I didn’t have was a guide to speechwriting. So I signed up as an Amazon.com affiliate, and now I make extra money by providing my website visitors and customers with a list of recommended books on the subject.

If your website is essentially an information site, then look for affiliate programs of closely associated products. Say your website features articles, stories, and other resources of interest to kayaking enthusiasts. You could sign up as an affiliate of a kayaking equipment company. An affiliate advertisement for safety helmets next to an article on whitewater kayaking would probably get a few clicks—and make you some money!

Another strategy is to ask your website visitors. Find out what kinds of products or services they are shopping for on the Internet. Then sign up for those affiliate programs.

Once you have an idea of the types of product recommendations and advertisements that make sense for your website business, your next step is to find the right affiliate programs.

First, check out the big guys! Just about every major web-based company has an affiliate program, from Amazon.com to Dell Computers. If there’s a big player in your niche, then chances are your website visitors are already comfortable buying from them. You can take advantage of that fact, as an affiliate, by offering convenient links to recommended products.

And of course, affiliate programs are not just for the big guys. Just about every website business these days has an affiliate program of some kind. (And, as I’ll discuss in Chapter 23, you should, too.) On any company’s website, look for a link called affiliate program, associate program, partner program, earn cash, or something similar. There you’ll find information on their affiliate program, including such vital details as how to join, how it works, and how you make money.

Another good source is affiliate program directories. These are websites where companies list their affiliate programs in the hopes of attracting good affiliates—like you! Here are some of the most popular.

Finally, take a look at the many affiliate networks available. These companies run affiliate programs on behalf of their clients—often web-based business owners just like you. On their websites you can usually sign up as an affiliate for free. The affiliate network company will then help you find appropriate advertisements that match the content and target audience of your website. Here are some of the most well known:

Each of these affiliate networks operates a little differently and have varying requirements. Be sure to read all the information about the program before you decide to sign up.

If you’re new to all this affiliate stuff, I suggest you tip your toe in the water by starting with just one or two products from a single affiliate program. Get a feel for how this method of earning income works and become savvy at using affiliate links and banners, and tracking your clicks and sales. Once you’ve gained more experience, you can start adding more products from more affiliate programs as appropriate.

So far we’ve talked about placing links and advertisements on your website as part of a traditional affiliate program where you get paid a commission for clicks or sales. But there’s no reason why you can’t sell ad space on your site the old-fashioned way: by charging a flat fee.

Hey, newspapers and magazines do it all the time!

Selling ad space, of course, involves getting paid by an advertiser to put a banner ad on your site for a specific period of time—say, one month. For example, if your website features information and advice for expecting mothers, then a baby wear store might be very interested in advertising on one of your pages or in your e-mail newsletters.

To generate advertising revenues in this way, create a link on your website that contains information on your advertising program. Potential advertisers will need to know the following:

For example, I recently wanted to place an advertisement on a popular website for graphic designers. I visited the site, clicked on the advertising link, and learned about their program. I discovered that they accept only two sizes of banner ads and the cost was $250 per month. After making the financial arrangements, I sent them the banner graphic along with the URL I wanted the ad to be linked to.

Running your own advertising program can be very profitable. However, you have to deal with ad sales, payments, client relationships, posting ads, and more. In essence, you’re in the advertising business.

Another approach is to sign up with Google AdSense or a similar program that automatically displays advertisements on your website that are relevant to its content. In Internet marketing lingo, this is often called contextual advertising.

You’ve probably seen these types of ads before. Google AdSense (www.google.com/adsense) is the most familiar because of the distinctive way the text ads look on a web page and the familiar “Ads by Google” logo. But there are many other companies in this space, too.

When you sign up for one of these programs, advertisements will be placed based on the preferences you set up and the content of your web page. So you don’t have full control over which ads will appear. In fact, with Google AdSense the ads may vary with each new visitor! You can, however, prevent undesirable advertisements from being placed on your site. You might not want, for example, to see a competitor pitching his goods to your hard-won website visitors!

Most advertising programs like this work the same way Google AdSense does: you get paid when someone clicks on the ad. However, there are some programs that pay on a Cost-per-Impression (CPI) basis, which is usually a flat fee paid for every thousand visitors who see the ad. As with any advertising program, be sure to read the “How it works” and “How you earn money” sections carefully.

You signed up for an affiliate program and now you have access to a range of affiliate product links and advertisements that you can use to generate revenue for your website. If you place these on a few key web pages, you’ll probably do fairly well. You’ll generate some clicks and make some money. However, you’ll earn even more affiliate dollars if you follow these suggestions.

Create a recommended resources page. Your website visitors are looking for resources associated with the products, services, and information your website provides. So why not oblige them? If your site sells gourmet cooking supplies, sign up for the affiliate programs of products and services you would recommend to your target audience. Then list these on the web page.

Leverage your e-mail newsletter. If you use an e-mail newsletter to keep in touch with website visitors, feature recommendations or ads for the affiliate products you represent. Some web-based business owners report they earn more affiliate income with their e-mail newsletter than they do their website.

Affiliat-ize your backend. When a customer purchases one of your products, recommend other affiliate products they may be interested in. This strategy alone could double your income on the sale. You can recommend products on one of the checkout pages, in the “Thank you for your purchase” e-mail, or in the information shipped with the product. Amazon.com does this all the time.

Write a review. Provide a candid review of a product or service, and then provide your affiliate link to it. People are always looking for reviews as a way to make purchasing decisions. Just be sure to give your honest opinion. Never tell your website visitors that you like a product when you really don’t, just because you’re an affiliate. (And if you don’t like the product, should you really be an affiliate?)

There may be other ways you can think of to use affiliate links and advertisements, too. Use your imagination. Look for opportunities to show your affiliate link at those moments when your website visitor or customer may be interested in that product. The more clicks you get, the more affiliate income you earn.

Throughout this chapter I talked primarily about sales commissions, because that is how most affiliate programs work. Someone clicks on your affiliate link or ad, buys the product, and you get a cut. However, not all affiliate programs work this way—and even among those that do, there are many variations. So it’s important to know the language of affiliate and advertising income so you can fully understand how a particular program is going to compensate you for your efforts.

Affiliate Commission. This is the most common type of affiliate payment. Basically, you get paid a percentage of the purchase price when someone clicks your affiliate link or advertisement and buys the product. How much commission? As a rule, physical products such as books and electronics pay 5 to 25 percent. Downloadable products and online services typically pay more because there are no manufacturing or shipping costs involved; usually you receive 10 to 35 percent, although I’ve seen commission rates as high as 50 percent.

Residual Earnings. This is a commission paid when your website visitor clicks on an affiliate link or advertisement for a particular product but goes on to purchase other products from that company, too. It’s a nice deal—look for this feature in affiliate programs you are considering joining.

Sales Minimums. These are earnings plateaus you have to reach before you receive an affiliate payment. For example, Amazon.com will only pay you with an Amazon Gift Certificate if your monthly sales are below $25. Other programs won’t pay you at all if you don’t reach certain minimums. Read the fine print carefully.

Cost-per-Click (CPC). This is an affiliate program that compensates you whenever someone clicks on your affiliate link or ad. You get paid regardless of whether or not that person ultimately buys the product. Google AdSense pays based on CPC.

Cost-per-Impression (CPI). This is an affiliate program that pays based on a flat fee per thousand people who see the banner on your website. These programs are usually only available to websites with very high traffic.

Cost-per-Action (CPA). You get paid when someone clicks the ad and then takes some specific action on the other website, such as signing up for an e-mail newsletter or downloading a free report.

Two-Tier Referral Program. This is a feature within an affiliate program that rewards you when someone clicks on an ad and then goes on to become an affiliate of that program themselves! Some website owners make the extra effort of actually trying to persuade visitors to become affiliates, just to get two-tier commissions.

Most reputable affiliate programs will provide you with a means of checking reports that display such important information as the number of clicks and sales your affiliate links and banners are generating. I suggest you check these statistics weekly so you can monitor the success of your affiliate efforts and, if necessary, make adjustments. You also want to monitor how much money the program owes you so you can make sure the payments to you are accurate.

The Least You Need to Know