Finding the Right Affiliate Merchants

Finding the Right Affiliate Merchants


Almost all e-commerce sites have affiliate systems these days, but hang on! You don't just want to join all of them. It's important to carefully choose which company/ies you will associate with.

You should first understand that there are two types of affiliate programs:

a.  Direct sign-up with the company.
b.  Intermediate affiliate system provider sign up.

While direct sign-up with a single affiliate program is often quicker, many affiliates prefer to sign up with intermediate companies. Why? Companies like ClickBank and AdSynergy provide all the tools you need and they give you access to thousands of brands in one easily accessible place. You don't want to spend all your time tracking your clicks and revenues.

Let's look at the issues you should consider when choosing an affiliate company:

3.1. The Product

You will need to pick a company not only for their brand reputation and great commissions, but also for their product. Is it something you can become passionate about? You will be spending a lot of time with it, so you have to be sure that you can do that without becoming bored. You also have to consider whether it is a popular product and the level of competition.

Tip:  Use Google Adwords Keyword Planner to see the keywords used to search for the product every month and the estimated level of competition.

Link to Choosing the most profitable affiliate product (below)

3.2.  The Company Website

Since you will be referring people to the site, and particularly if you will be getting paid a commission per sale, rather than per click. The site should be designed in a way that makes it user-friendly. The benefits of services and products should be clear with strong calls to action. Images should be clear and order pages should explain exactly what the person is buying. Remember, as a representative of a company, you want to be sure that your reputation is also upheld amongst your readers.

Tip: Watch out for 'leaks'. Leaks are links that lead to external web pages that will not generate income for you. Some websites may display their toll-free number in huge print all over the site.

3.3.  Conversion Rates

Even a reputable brand with an excellent website and attractive commission structure may have a low conversion rate. Conversion is based on the number of people who act (sign up for a newsletter or buy a product) after clicking on a link from your website to that of the affiliate merchant. If 100 people click on your link and 10 buy a product, you have a 10% conversion rate.

When selecting a company, the conversion rate should be right at the top of your priorities. A conversion rate of 1% is industry average, but that's not enough for you to make a lot of money online. You need to look for a conversion rate of 3% or more in order to turn a profit.

Tip:  Considering the conversion rate and the commission percentage on sales, you need to assess the value of the average order. A site with the same average order value and commission percentage, but a higher conversion rate will earn you more money for the same amount of referrals.

3.4.  Payouts and Commissions

Don't let the payouts and commissions be your only consideration when you decide which affiliate company to join. The example above clearly shows the importance of the conversion rate over the commission percentage.

Tip: Cheaper products almost always have a higher conversion rate than high-ticket items. However, you need to consider your niche and the demographics of your readers. Which product will they prefer?  You may sell more volume of the product with the lower commission.

3.5.  Average Value of Orders

Average order value is the most interesting aspect of selecting an affiliate merchant, because that's where you get to apply your analytical senses to find the best way to make the most money. Average order value is the total amount of the average order placed. Look at these two examples:

Example 1:  Merchant one offers a 10% commission and has a 1% conversion rate.

Example 2:  Merchant two offers 12% commission and has a 3% conversion rate.

Will you join Merchant 1 or Merchant 2?

Most people will join merchant two. However, when average order value (AOV) comes into play, you might change your mind.

Merchant one has an AOV of R380, while Merchant two's AOV is only R100. Therefore, Merchant one will pay you R38 per sale, while Merchant two will pay you R12.  While Merchant two has a higher conversion rate (3%) vs. Merchant one's 1%, you will earn R36 for the 3 sales, while Merchant two will pay a total of R38. Thus, Merchant two is the better choice.

Tip:  Grab your calculator and do some sums, rather than choosing the programme that looks better on the whole.

3.6. Earnings Per Click

EPC is another important consideration, and intermediate programs will report this while you're browsing for a program. EPC shows you the average earning potential based on its current affiliates. Checking the EPC is a good way to check whether a programme will be of value to you.

Tip:  Work out the EPC by dividing total commissions, by the number of clicks delivered. Example:  If the earnings are R10 after delivering 100 clicks to the merchant, you should divide R10 by 100 = 0.10. Your EPC will be R0.10 per click. That means that you're paid 10c per click.

3.7.  Cookies

The duration of the affiliate cookies on a site will certainly affect the money you're able to earn. Cookies track your affiliate code from your website to that of the merchant. Example: If the merchant offers a 30-day cookie duration, and a visitor clicks on the link today, but only completes an order in 2 weeks, the sale will be attributed to your affiliate account. That means that you will still get commission on that sale.

Tip: The longer the cookie duration, the better for affiliates.

3.8.  Reversals

The reversal rate tells you the amount of orders canceled or reversed. It also includes non-commissioned sales. This number is critically important, because even if every other point on this list is optimally designed for your pleasure, a 70% reversal rate will ruin your income earning potential.

Tip:  You don't want to work unpaid. Most programs have slow conversion rates and you have to understand that orders are sometimes returned or canceled. If you have had success with a merchant and suddenly the reversal rate increases, it's time to ask them what has changed. Unless they can offer a legitimate excuse, it's time to switch their links for those of another merchant.

3.9.  Affiliate Marketing Tools

Most affiliate merchants offer comprehensive sets of tools, including banners, links, coupons, widgets and more for you to place on your site. The better the quality of the tools, the more likely people will click on the links.

Tip: If you're new to web-design, find a programme that offers high-quality creatives and useful marketing materials that are easy to use. Good tools make your task much easier.

3.10.  Competitive Sites

It's always good to keep an eye on the competition. There will always be competition - not only for you, but for the merchants. The competition is always looking to recruit top affiliates and they offer higher payouts with better conversion rates. They may be listed on other affiliate network sites, or they may have in-house programmes.

Tip: Once you have narrowed down a few companies you'd like to join, check out their competitors, too. If your choice of company faces a lot of competition, it will be more difficult for you to get market share (since more affiliates are participating). Therefore, if you want targeted traffic, you need to use better strategies than the rest of the merchants and affiliates.

3.11. Affiliate Support

While most merchants have highly automated affiliate systems with all the tools and information easily accessible, it's still important that they have a dedicated manager who deals with affiliates.

Tip: The affiliate manager should be easily reachable by phone, email or live chat. They should have a good response time and they should be able to answer all your questions. Test this by placing a call to the affiliate manager and take advantage by asking any questions the website didn't already answer.

3.12.  Terms of Service

Each merchant will have its own affiliate marketing terms of service, or terms and conditions. Most people overlook this aspect of anything they sign up for. However, for the sake of your income potential, please read it!

ToS will include ways in which you are permitted to market the affiliate links; where adverts can be placed and methods that you're not allowed to use.

Tip: Read the ToS, so that you can ensure your commissions are paid. Many merchants have withheld commissions due to affiliate marketers using unauthorised methods to gain traffic.







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