Definition of Affiliate Marketing

By Private Label Rights PLR eBooks On February 19, 2009 Under Affiliate Marketing

What is affiliate marketing?

Affiliate marketing is nothing more than selling the products or services of somebody else in return for a percentage of the sales proceeds as a commission.

It is a little like working as a commission only salesman for a real- world business. Just as would happen in this real-world scenario, if you make no sales, then you do not get paid. Having said that, there are many advantages to selling products as an affiliate for the original creator:

• You do not need to create your own product (!).
• You do not need to carry inventory or worry about delivery.
• You do not need your own merchant account to accept payments.

All you need to do is find a product and promote it successfully, and then cash your ‘paychecks’ when they arrive. As you will discover while reading this book, there are thousands of merchants looking for affiliates to sell products for them.

Also, the types of products or services that are available to be sold by affiliates vary enormously, as do the commission rates that are paid by the product creators.

Depending upon the product, you will sometimes see businesses offering commission rates as high as 75%, whilst at the other extreme you will see percentages as low as 4% or 5% quoted.

However, viewed on their own, these figures mean little or nothing. I would much rather earn 5% of $10,000 than 75% of $50! In other words, you must look at both the percentage commission rate quoted and the product price to form a complete picture of whether a particular product offers you an attractive deal as an affiliate.

Being digital isn’t everything

I have never sat down and counted the exact number of affiliate marketing ‘how to’ manuals and guidebooks on the market, but I would bet that there are probably thousands of them available. However, the majority of guides about how you can start making money on the internet by selling as an affiliate follow much the same well trodden path.

Central to this basic online affiliate marketing model is that you should focus all your efforts on selling digital products, such as software programs, e-books, special reports, online training courses and so on.

Undoubtedly, there are reasons for this specific focus, and some that are most commonly put forward to justify this position do have some substance.

• Such products are capable of being delivered instantly, and this is certainly an advantage for certain types of consumers.

• There is no question of additional costs for packing or shipping with a digital product, and once again this will appeal to a certain type of consumer.

• Most importantly for you as an affiliate marketer, the major advantage of selling digital products is that you will get paid extremely quickly for any successful sales.

There are, however, several very important but nevertheless widely ignored disadvantages to selling digital products. These disadvantages increasingly lead me to believe that most affiliate marketers are being misled by the common wisdom.

It is not too difficult to understand why this happens. Many leading online business experts make a significant proportion of their income by selling ‘how-to’ manuals to would-be affiliate marketers. It probably pays such people to ensure that new affiliate marketers are not instantly successful, because if that were to happen, they clearly would not want to buy any more ‘how to’ manuals.

To understand the disadvantages, let us forget digital products for one moment and take a look at the non-digital ‘real world’.

Looking beyond the internet

Whilst an ever-increasing number of people are working or spending their leisure time online, there is still a high proportion of the global population who do not have access to the internet. In addition, of those who do have access to the net, a significant proportion is either unwilling or unable to directly purchase products or services online.

In other words, there is a massive global market that people who promote only digital products online can never make a successful sale to.

Added to this is the fact that digital products of themselves are limited by their own format. For example, if someone wants to buy an e-book that teaches them 50 great ways of making fresh orange juice at home, then of course this can be delivered digitally. If, however, they just want to buy the orange juice itself, or the machine to make it, then this clearly cannot be delivered in the same way.

By promoting or selling only digital products, a significant market of people who are more interested in buying a real product or service is being ignored.

The final and most important point that is widely overlooked by most of the advocates of promoting digital products as an affiliate is competition in the marketplace.

I have no exact figures, but I would suspect that over 90% of new (and perhaps even existing) affiliate marketers put all of their efforts into selling digital products.

Whilst the internet marketplace is undoubtedly growing bigger every day, nevertheless this means that there are ever increasing numbers of affiliates who are pushing the same digital products and services.

This can be seen most clearly when one of the big-name ‘gurus’ releases their latest product. Generally, such a launch will be a mega-event, and you will inevitably see details of it all over the internet.

Every time you see such details on a website or blog, you know that it is yet another affiliate for the product who is fighting for their own
share of the market.

Every one of these affiliates is in competition with each other for business. A customer will only ever buy this particular product once. In other words, there can only be one successful affiliate who makes the sale of this particular product to each customer.

Backing up a little, consider the person who is selling the e-book listing 50 great ways of making fresh orange juice at home. How many times are you going to buy this book? Only once, right?

If, however, you decide that you have neither the time nor the patience to make your own juice, and therefore buy the finished product, how often are you going to purchase this?

Once or twice a week every week is the answer. In other words, because orange juice is a consumable product, you will become a regular customer rather than a one-off buyer.

Whilst I can see that there are advantages to selling digital products, the fact is that the overwhelming majority of new affiliate marketers start off trying to do the same thing, and fail to do so successfully for all of the reasons I have highlighted above.

Affiliate marketing is a superb business model, both for the original product creator and for any affiliate who is successful in selling the product or service concerned.

Check out the PLR eBook Club Affiliate Area Here!