Affiliate programs are basically just selling someone else's product, and earning a percentage of the profit in exchange. This is a highly effective way to add an additional income stream, or to use as a primary method of income for your site. You can also use affiliate programs to recruit others to sell your products as well.
There are several recommended affiliate programs on the web. Clickbank is the one I use most often to sell electronic products such as ebooks. They manage all your tracking and payments, and you can even refer returns to them. You get paid a percentage of the sales price dictated by the owner of the goods, then a small fee to Clickbank. They send a check every two weeks. Its as easy as that! I think this is the first way new ebusiness owners should utilize affiliate programs, because it is so easy, you have a wide choice of products to choose from in one place, and it's free to sign up!
Many larger websites use their own affiliate management software to run their own programs. This is fine, but make sure you do your research and that they actually do pay as promised. Also, make sure you are partnering with a larger business that has been around awhile...you don't want your profits disappearing overnight like some websites do!
You also can join affiliate programs to sell hard goods from major retailers. I recommend Commission Junction as the first one to try. It is free to join, and they have an excellent array of retailers and products to choose from. You can sign up at www.cj.com.
Rules for Affiliate Marketing:
2.Choose quality products that are well fitted to your readership...in other words, don't try to sell an ebook for Work at Home Moms to stock brokers. DON'T sell products that are sub par...your word is what people learn to trust, and if you break that trust, you will lose sales. Word gets around quickly on the interent, so do the right thing!
3.Be proactive in promoting your affiliate products. Write about them in your articles (With live links to your affiliate page!) recommend them in your newsletters, and review them on your site.
Lastly, it bears repeating...be honest! Don't review a product you have never seen, and don't recommend a product you don't know about. Many times, if you email the author, they will send you a review copy for free. After all, you might make them as much as they make you!
