AFFILIATE MARKETING EXECLLENCE Chapter 2: The Mechanics of Affiliate Marketing: How it All Works

We’ve seen how affiliate marketing works but what we haven’t addressed yet is the precise mechanics and how understanding this can help you to be more effective at your job.

What happens for example, when someone clicks on one of your affiliate links?

The answer is ‘cookies’. Cookies are small files that get saved on the computer and are handled by your browser. Websites can store cookies and then look for them and they use this to keep you logged into Facebook, or to show you relevant adverts based on your browsing history.

When a buyer clicks on your link, they get sent to the checkout page for a specific product. At the same time though, a cookie will be stored on their computer which will identify them as having been referred by you. This then means that when they make a purchase, the profits can be allocated to you.

Understanding this is important because it introduces a potential risk – that people will see what you’re selling and navigate there of their own accord. This is called ‘link bypassing’ and it’s worth your while to prevent this using link cloaking. That means using a redirect that sends people to your affiliate link while hiding the URL from them. You can do this using a simple bit of code:

meta http-quiv=”refresh” content=”0; url=http://www.example.com/affiliatelink”

Alternatively, you can use something like TinuUrl or Bit.ly.

It’s also worth doing a little research into the affiliate scheme that you’re going to be working with. That’s because the creator of a cookie also gets to set the lifespan. A cookie can last a few minutes, or it can last until the user actively chooses to delete their cookies/changes computer.

Of course it’s much better for you to have an affiliate scheme with cookies that don’t expire at all. Amazon has a ‘session limited’ cookie scheme for instance that only lasts 24 hours. That’s actually pretty good in this case though, considering that people already know about Amazon and you can make money from other things people buy from the site that day.

What’s also key to note is whether a subsequent affiliate can ‘override’ your cookie. This becomes relevant if someone
should click your affiliate link, not make a purchase, then click someone else’s affiliate link and buy. Who gets the money? This depends on whether the affiliate honors the first click or last click. If you are a ‘lifetime referrer’ then you will always be given credit for the referral regardless of what else happens subsequently.

###Types of Affiliate Program and Choosing the Best Product

With those technical details out the way, it’s time to start choosing affiliate products and schemes. The first step here is going to be in deciding which type of affiliate scheme you want to join up to. Do you want to sell a digital product? A physical product? Or a service?

The best answer for most beginners will be a digital product. This means something like an eBook, a free report or a digital course. There’s no cost associated with production, storage or delivery here and as such the product creator gets a much bigger slice of the profit. What’s more, they have more profit to share with you and that means you can earn up to 50-75% from each sale.

To find these products, you should look at an affiliate network such as JVZoo, ClickBank, Comission Junction or Warrior Special Offers.

To use one of these sites, all you need to do is sign up, browse through the available products and then apply to work as an affiliate for a few. You can see data and information about each one, such as the number of sales, the cost etc.

From there, you want to choose a digital product that is making a lot of sales but also offers you a good amount of cash per sale. Think too about how you’re going to market each of those products and what ‘angle’ you’ll go with to make it desirable for your audience.

Trying out the product is a very good idea, as is finding one that offers free marketing materials that the product creator designed. Some will come with free landing pages, blog posts, email autoresponder sequences and more that you can utilize.

Promoting digital products means you make more money per sale and it means there’s less that can go wrong. It’s also the preferred method by many digital marketers, which means you’ll find a lot more advice and help.

Some people though will feel more comfortable selling physical products which they can do by signing up to Amazon Associates or Shareasale. People like selling physical products because they still have a much wider audience. It’s a certain type of person who is willing to spend $50 on an eBook and anyone who is a technophobe, who wants something physical, or who is savvy enough to know they can get most information for free will be uninterested.

On the other hand, we all spend money on physical items – from Grandmas, to jocks to genius coders. This means you have a much larger potential audience. Unfortunately though, physical products also cost a lot more to produce and to ship and normally they go through more channels before you get the opportunity to promote them. When you sell a product through Amazon for instance, the money isgoing to get split between you, the product creator, Amazon, the delivery company and possibly even another reseller.

As such, affiliates on Amazon tend to get as much as 4-8% per sale as opposed to 50- 75%. The products will also often be cheaper and less geared toward getting digital sales. Why would someone click your link to buy a computer when they can just go to their local technology store? These are the considerations you’ll need to take into account when you start trying to sell physical products rather than digital ones. Of course there’s nothing to stop you from selling both types of product, though then you do risk cannibalizing your own sales.

Ultimately, it makes more sense to start with digital products because you can make a bigger earning from fewer sales. When you’re not yet getting the sheer volume of visitors you need to make hundreds of sales, selling digital products is still the quicker route to making more money.

Finally, you can look at selling services or memberships. These will often provide you with what are known as ‘lifetime commissions’. For instance, if you can get people to sign up to a gambling site, then you might be able to earn commission from them for the lifetime of their membership. Get enough of these and you can be set for life – but of course there are unique challenges here too.

There are far fewer of these sorts of affiliate schemes for instance (for obvious reasons) and normally the best way to find them is to visit the sites in person. This means you can end up with lots of separate accounts and in turn, things can get a little fiddly. This is more complex and perhaps not a great starting point for complete beginners.

###Some More Tips for Choosing Your Affiliate Product

Something else to consider when choosing an affiliate product is whether it’s something you will be able to sell. Not only must it be possible to sell generally, but you also need to be able to sell it personally. That means that ideally, it should be on a topic that you find interesting and that you know how to sell.

When creating a blog or building a mailing list, you will usually need to write a lot of blog posts and e-mails on the topic of the product in order to build trust, provide value and offer a reason for people to come to your website in the first place. If you aren’t careful and you choose a subject you know nothing about, you’ll quickly find this tiring and boring and you’ll again be more likely to quit. What’s more, is that readers might be able to tell that you aren’t in fact an expert on the subject and this will undermine the points you make and leave your readers less inclined to trust you.

At the same time, you also need to think about the advantages that are unique to you, such as any routes to market you might have. A route to market is any direct link you have with a potential audience – such as a blog or a magazine. If you already have a blog, then of course you need to choose a product that your readers will find interesting.

But you might also have some additional routes to market. For instance, think about your contacts: do you have the e-mail address of any top bloggers? Are you friends with the editor of an industry magazine?

In other words, it basically boils down to choosing a product that you already know you can sell. Even if you don’t have a direct route to market, think about what the best routes to market for each product might be and how you could go about reaching them. Don’t choose a product then think about how you’ll sell it – choose the product because you know you can sell it. We’ll be talking more about this later in the book.

Big Niche, Little Niche

Likewise, another consideration you will have is whether to pick a ‘big niche’ or a ‘little niche’. Of course every internet marketer knows that your ‘niche’ is your industry which at the same time will dictate your subject matter.

So if you’re selling an eBook on getting abs, your niche and your industry are ‘fitness’. On the other hand, if you’re selling an eBook on making money online, then your niche is online business.

Making money online is actually the biggest niche you’ll find when it comes to digital products with affiliate schemes. In fact, WSOPro (Warrior Forum Special Offers) is entirely dedicated to digital marketing products. Just behind digital marketing as a niche meanwhile are the fitness niche and the online dating niche.

This is a good thing because these are proven niches. People are happy to spend money to make money and they’ll also spend money to look and feel better or to find love. These are also subjects that appeal to everyone. So if you’re looking for a product with a proven track record, it will likely be in these areas.

But there’s also a problem here: that problem is that these areas are highly competitive and oversaturated for the same reasons. If you want to reach this audience then you’re going to need to spend more money on PPC advertising as you’ll be bidding against more competitors. Likewise, if you want to create a blog, you’ll be competing with a much larger number of other blogs for the top spot on Google and for readers.

Conversely if you create a blog on ‘Super Meat Boy’ then you’ll be among maybe two other fan sites and you’ll find that you can very quickly get seen by pretty much your entire audience. Likewise, you’ll probably be able to pay to advertise on Google or Facebook for these terms without spending much money.

The same goes for writing about a specific job or profession. If you’re selling an eBook on ‘stage lighting techniques’ then you’ll find it much easier to reach those professionals without spending vast amounts of money.

But at the same time, the products will also appeal to a much smaller market. This means that it won’t take as long to saturate the market and you likely won’t make as many sales over the long term.

The answer? Often the best strategy will be to start smaller and then to build your way up to reach the bigger niches.

Another option is to choose an affiliate product that aims at a smaller cross section of a much larger niche. For instance, ‘fitness for the over 50s’ is a much smaller chunk of the larger ‘fitness’ niche. The same goes for ‘digital marketing for students’.

One more consideration though is who that target demographic is and specifically how much disposable income they have. In this regard, aiming at the over fifty makes more sense than aiming students!

###Why do Product Creators on Digital Affiliate Networks Give Away So Much Profit?

Something you might be asking yourself at this point is why a digital product manufacturer would be willing to give away 75% of their profits; what’s in it for them?

To understand this, it’s worth considering the power of scaling up. Sure, they’re only making 25% per sale but if they have 20 affiliates selling 100 copies of their item a day, they’re still going to make far more than any of those individual affiliates. More importantly, they’ll be able to earn much much more than they would selling the product on their own.

The more commission the affiliates offer, the more people will come on board (versus other products) and that means they’ll be able to continually scale up their profits. And anyway, they’re probably still making money from their own marketing activities where they’ll be making 100% per sale. The sales they get from you are all on top of their earnings.

###Your Beginner Strategy: Don’t Reinvent the Wheel

The great thing about affiliate marketing through JVZoo or ClickBank is that you can start earning nearly as much as the product creator themselves without having to create anything. There’s really very little reason to spend lots of time and money creating a product when you could just find one ready made to earn the same amount of money for you right away.

But saving time and money is only one big benefit of affiliate marketing. The other is the fact that the products you’ll be selling will come ‘pre validated’.

What this basically means, is that you know for sure that there’s demand out there for the product you’re selling and that people actually want to buy it.

When you create a product of your own conversely, there’s a chance that after putting all the time and effort in to build it, you’ll find that no one actually wants it. In that case, all the marketing prowess in the world won’t help you and you’ll actually come out of your affiliate marketing activities worse off than you started.

With affiliate marketing, you get to choose a product that is already selling lots of units and in some cases you can use their exact sales scripts in order to sell it. This is a proven quantity and as such, there’s nothing that can go wrong. This is literally a ‘cut and paste’ business and all that’s left to you is to find your own audience.

Unfortunately, many affiliate marketers don’t realize this and they instead want to get clever with creating their own unique business strategy. The same goes for all the people who try inventing their own new app, or becoming the next massive blogger. That’s all good and well but 9 times out of 10, they will fail. If you’re really serious about earning money, you don’t need to re-invent the wheel. Just find what you know works and then use that exact business model to earn money yourself.

This is the smartest way to start making lots of money as an affiliate. Find what works and then go with it – don’t try and be clever. Once you’ve had some initial success and earned some cash then you can look at creating your own product or changing the world. For now, settle for earning money in a tried and tested manner, quickly and efficiently.

###Scaling Up
Once you find the right product and you begin making some money from it, you can continue with this ‘repeat what works’ strategy in a very simple manner: by repeating it!

In other words, if you are making money from a certain digital product in a certain niche, then why not just completely mimic that model and start selling two different digital products? That quickly, you can double income as well as giving yourself a backup and a more secure model as a result.

Alternatively, you can just start spending more on your PPC ad campaign to drive more traffic there. Build mini business models and monitor your conversion rate and then only once you’ve proven that they make ROI, start spending more money on them to multiply your earnings.