What Are Affiliate Programs?

They are arrangements in which a merchant will pay you a commission to send them traffic or a sale. You post links to the merchant and are paid according to a particular agreement that you both agree on. This agreement is usually based on the number of people the affiliate sends to the merchant, or the number of people they send who buy products or even sign-up to a merchants program. Some programs pay according to the number of people who visit the page containing their merchant's advertisement. Basically, if a link on your site brings the merchant traffic or creates a sale, the merchant will pay you according to the agreement you signed.

Recruiting new affiliates to an affiliate site is an excellent way to create a residual income, or "profit tree" that will continue making you money time and time again. Especially if the new affiliates sign-up new affiliates and they then sign-up new affiliates. You can make money off ALL OF THEM.

Programs
There a few basic types of affiliate programs and many "modern" programs will follow these:

Pay-per-sale:
In this arrangement, the merchant will pay you when the affiliate sends them a customer who purchases something. Usually the payout is a percentage of the sale but many newer programs are a fixed dollar amount per sale.

Pay-per-click:
In these programs, the merchant pays you based on the number of visitors who click on the link to come to the merchant's site. They don't have to buy anything, and it doesn't matter to the affiliate what a visitor does once he gets to the merchant's site. You get PAID PER CLICK. Usually a small fixed amount.

Pay-per-lead:
Companies with these programs pay you based on the number of visitors you refer who sign up as leads. This simply means the visitor fills out some requested information at the merchant site, which the merchant may use as a sales lead or sell to another company as a sales lead. Every lead is paid, in many agreements, are a small fixed small dollar amount but in many programs, if the lead becomes a sale, in many agreements you get an additional fixed dollar amount.

Two-tier programs:
These affiliate programs have a structure similar to multilevel marketing organizations or network marketing. You know one Two-tier program... Amway. You make money through commission sales and sales-people recruitment. Many, if not all two-tier programs pay you a set percentage of the sales-people that you signed up sales and when your "signees" sign up new sales-people then you get an additional income potential.

Who Are Affiliate Programs For?
Most affiliate service agreements prohibit offensive content like porn, adult or "hate" sites, so if your site isn't one of those, then you could be involved in an affiliate program. The best thing is... you don't even need to sell anything to benefit from having affiliates. A lot of content-based Web sites get most of their money from advertisers, which are attracted by high traffic numbers. Because of this, traffic translates directly into profit for these sites.

My 2cents worth - Pay-per-click affiliate programs are the best way to increase traffic. Smaller amounts, but you get paid EVERY TIME someone clicks the link you advertise.

Linking Methods:
An affiliate can link to a merchant site in a number of ways. The best link choice depends on the nature of the affiliate and the nature of the merchant. Each kind of link is specially suited for particular purposes. Common types of links include:

Link to a specific page:
This is a straight-forward link to a merchant's page.

Product-specific link:
You sell products of your choosing by links and pictures which link to that product's page on the merchant Web site. This makes things easier for the customer and simplifies the affiliate program process. Many people create e-stores using this technique... including YouDonkey & Company.

Storefronts:
If an affiliate Web site wants to expose visitors to a variety of products, they can link to a storefront. Prefabricated storefronts are maintained by the merchant and display the most popular products or most popular sale products. This helps you create more money and also helps the merchant create more sales.

My 2cents - not so popular and generally can not be redesigned to match your site. Not worth it.
Search box:
This type of link allows visitors to search an online database on another site. The results of the search are links to other pages on the site. This only works if you create a store either by affiliate links or through your own product page.

Registration:
You link directly to a registration form on the merchant site. If a visitor would have to register to use the merchant's Web site, this link is a good time-saver and a huge money maker.

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