By John Woon
What is an affiliate program? I’ve been bombarded with this
question from Internet business newbies since I got myself
involved in this very interesting but challenging
Many years ago, ever since we started manufacturing products
for sale in the offline physical world, we had been having
sales agents representing different manufacturers to help the
latter to expand their markets. The agents conclude sales
without carrying inventory, handling payments, signing
contracts, sorting, packing and shipping of the products.
main focus had been to make the sale by getting the orders
the prospects and existing customers, which were then
by the manufacturers or merchants.
In the Internet online world we have affiliates instead of
agents. Affiliates are highly targeted pay-for-performance
There are also some forms of Internet advertising that rewards
the affiliates for driving traffic to the advertiser i.e. the
manufacturers or the affiliate program owners. The advertiser
pays the affiliates to place a link on their website, and the
affiliate sends traffic to the advertiser in return. In other
words, it's about the affiliates receiving commissions for
helping in making the sales.
The most common reward is pay-for-sale, where the merchant
the affiliates who referred the paying customers.
Affiliates are being considered as a complementary but very
important sales channel although the merchants themselves
continue to get their own direct traffic in making their own
The affiliates do not have to suffer from the occasional
sleepless nights worrying about the processing of orders,
packing and shipping etc because this are being taken care of
by the merchants who usually have an effective tracking system
to determine which affiliates drive which orders to them
starting with the so-called affiliate links. These are
the links that the affiliates put on their websites,
newsletters, ezines or emails.
How does an affiliate link look like? You may ask. The most
common affiliate link is embedded in the linking URL. For
example, if you see a link like
"www.abcmerchant.com/?xxxx=3456", you can be quite sure
that the affiliate with the ID (identification) 3456 will
receive money from ABC Merchant when someone places his order
after clicking that link.
Other affiliate links are more complex and encrypted with some
sites having their links masked so that the prospects won’t be
able to detect that the URL they’re clicking is an affiliate
An excellent example of an affiliate program is that of
Amazon.com who happens to have one of the oldest affiliate
programs in the Internet. Other possible affiliate programs
1) "Pay per click" - the merchant pays the affiliates for the
driving the traffic and the resulted orders to them.
2) "Pay per lead" - the merchant pays the affiliates for
directing the prospects to register their interest with a
possibility of making the sales later.
3) "Pay per subscription" – if the merchant has a recurring
revenue from the customer’s repeated orders, the affiliates
will benefit accordingly.
Why bother about Affiliate Marketing at all then?
The following are some of the reasons why Internet marketers
the world over swear by the affiliate marketing as a form of
their Internet advertisement and strategy:
1. Low budget
Many are hesitant to venture into any home based businesses
because of the lack of fund or the unwillingness to part with
money due to uncertainties. In affiliate marketing, you don't
have to invest a lot financially to start pulling in profits.
2. No inventories
There is no need to keep and manage an inventory as this would
be taken care of by the merchant.
3. Passive income through leverage
One could copy what the truly wealthy people are doing (or
rather not doing). They earn their income through various
leverage strategies which allow them to make money while
they’re sleeping, meddling with hobbies, or having vacation in
far away places such as the beautiful beaches in Hawaii or
Unlike a paid job, affiliates could just drive traffic to the
merchants’ websites without having to sweat after having
provided them your ad copy and links.
4. Minimal risk
The main reason for most successful Internet marketer's
extensive use of affiliate marketing is the low-risk nature of
the program. This is especially attractive to those with low
budget for advertising
With affiliate marketing, you are dealing with an unending
global market place. All you have to do is study, research and
select a niche product or service and prepare all the
marketing tools for your affiliates to direct traffic from
about anywhere around the world to your website.
6. Getting paid while you sleep
This system allows you to “recruit” thousands of “salesmen”
are willing to work for you 24 hours a day and 7 days a week.
The best part is the fact that they’re willing to do so for
nothing! This is a system that allows you to switch your
business to “Autopilot” mode so that you could continue to
money whether you’re awake, asleep or holidaying in Bangkok or
Penang. It is a system that allows you to work from home or
some places 10,000 km or more away from home.
Having said this, it must be stated that not all affiliate
programs are successful. Many affiliate program owners fail
because of their lack of the necessary investment, for
instance, the merchant needs to invest in an effective
system, which is usually an outsourced affiliate network or an
in-house affiliate software system. Another factor to consider
is having sufficient human resources to recruit, manage, and
motivate the affiliates with the right technical support and
remuneration. Without a good support system in place, the
affiliates will not stay long enough to produce the desired
Most online businesses use affiliate marketing strategy to
their products which could include physical products, software
or e-books. Service industry can also benefit from an
program via a pay-per-lead program.
Before a merchant could establish an affiliate strategy, he
should consider many factors among them are the answers to the
1) What are the benefits to the affiliates? What commission
rate should be offered to affiliates to attract them and
2) What are the competitors doing? Are there any innovative
strategies that could produce product differentiation?
3) What pay-for-performance model should be adopted?
4) How to manage the affiliates and motivate them?
5) How are the affiliates paid using the latest technology
without affecting their moral due, for instance, to delayed
payment of their commission?
6) What affiliate software tracking systems are available and
which is the best for the purpose?
A well designed affiliate program could bring very explosive
positive results to the affiliate program owners’ business and
the stream of income for the affiliates themselves.
An affiliate strategy done right can increase online sales
tremendously. There are well over 30 affiliate software
packages to choose from. There are also more than 200 features
in affiliate software and network offerings.
With all these possibilities, no wonder many success stories
the Internet businesses today are the results of suitable
application of affiliate programs. Indeed, most online
businesses could not survive today without effective affiliate
About The Author: Sung-Liang Woon (John Woon) is an
Rubber and Latex Consultant with about 30 years of experience.
Check this fantastic website to find out how he has ventured
into Internet business:
www.pluginprofitsite.com/main-9747. Check his website:
www.johnwoon.com and take a tour at his blog: