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Article

Becoming a merchant in affiliate marketing




© AffiliateSeeking - This article is not allowed to be re-published but can be linked to.

Advertisers who sell products, goods or services online can develop a partnership with other websites through affiliate marketing. This partnership with affiliate websites enables the advertisers or merchants to experience an increase of their website's traffic and sales. In return, they compensate their affiliates based on their performance and based on the affiliate program both parties agreed to work into. Affiliates empower the merchant's website by putting up banners and other types of links on their own sites which points to a page, a product, or encourage the visiting user to do desired actions on their site.

While business growth is promising with affiliate marketing, it can also entail intense management tasks to merchant websites since they need to have mechanisms to track back affiliates who generated traffic and/or whose referrals commenced sales.

The most popular and successful affiliate program on the web is the Amazon.com Associate Program launched in July 1996. They provided links in forms of graphic banners and HTML snippets to affiliates who want to set up their own online mini-bookstore. For every book purchase the visitor engages in Amazon.com, the referring affiliate website can get at least five (5%) percent of the revenue. Amazon exploited traffic-tracking automation tools and sends quarterly checks to its affiliates.

The trend of most companies who do not have adequate resources to provide their own software and tracking tools is outsourcing - they let other companies who specialize it handle such development including the monitoring of these applications on running servers. This method wipes out overhead and in-house technology costs of affiliate marketing companies.

Getting Started as Merchant

Advertisers or merchants need to consider a lot of factors before rushing in and creating affiliate program. These are steps that require decisions that can be difficult to reverse on later phases of the business.

First, they should determine and specify the program's objectives. The objectives could be attainment of certain sales level, getting new customers in a new market segment, or in cases of sites that sells only advertising - an increase of site's traffic. Objectives aid decision making and expose possible management tasks that the program might demand.

When the objectives have been identified, merchants should decide how much they are willing to spend or invest in the affiliate marketing. Figuring out how much they can offer to affiliates including the program methods which the payments will be based should be determined. Should the merchant pay a certain amount for every user referred by affiliates through click-throughs or when the referred customer engages in a transaction? It is has been customary for experienced merchants to pay smaller fee for click-through referrals and higher fee or perhaps a percentage of the sales for the sales-based affiliate program. Advertisers should know that setting the offer at minimal level does not really pay because most affiliates will dedicate more to the program if the offer is better, especially when the merchant's customer support is excellent.

If resources are not great enough to support the development of software tracking tools, merchants can decide to pass this task to a company who specialize such activities. This usually can save a lot of extra expenses because the said companies will take care of most technical tasks such as software monitoring on servers, technology implementation and related activities. A good outsourcing company allows advertisers to supersede expenses by its cost-effective services.

The next thing the merchant needs to do is to measure the initial results of the program after being implemented to a very limited number of affiliates. This lets them identify if results are favorable or not. This usually leads to an important business decision. If the results are good, then they can decide market the program or to roll it out to the general public where competition is inevitable - again, this would require another strategy.

When the program turns out to be on the positive side, merchants should allow more affiliates to join the program without losing the quality of support. This will increase the online exposure of the merchant's products and services. Merchants might also need to weed out fraudulent affiliates as it becomes common these days.

The Philosophy

Regardless of the number of affiliates, the relationship between the affiliates and the merchant is one of the most important ingredients for the success of affiliate marketing which benefit both parties. If this relationship is harmonious, affiliates will be eager to exert efforts to improve the traffic directed to the merchant's site.



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