Affiliate marketing has become a buzzword of sorts among Web marketers hungry to drive sales on fledgling e-commerce sites. Part of the appeal lies in its simplicity: It lets anyone with a presence on the Web (from the biggest sites down to the smallest homepages) promote and sell goods on their site and get paid a commission for sales generated. In theory, the opportunity affords nearly limitless avenues for promotion, access to an instant sales force of thousands, and - here's the kicker - no out-of-pocket media costs to marketers or potential affiliates. It's no big surprise that Web marketers are clamoring to find out more.
It should also be no surprise that affiliate marketing, like every other get-rich-quick scheme on the Web, is neither a marketing panacea nor a fast lane to help Joe Homepage retire. Successful affiliate programs require effort, focus, and, yes, money.
I hold the Web's trend-setting Midas, Amazon.com, partially responsible for the unbridled outbreak of affiliate marketing enthusiasm. Like everything undertaken by Bezos and company, the Amazon affiliate program has grown to mammoth size in a relatively short period of time, and they've made it look so darned simple. Amazon now counts over 100,000 affiliates, sites ranging from The Motley Fool to Y2KChaos, that have set up book boutiques designed to appeal to niche audiences. Site operators earn 15 percent of every purchase that's made through a referral, and "the world's biggest bookstore" gets the rest.
Let's say I'm a Y2K-concerned individual and I decide to purchase Y2K:
It's Already Too Late from the Y2KChaos catalog. I click through to
Amazon, fill out a few forms, drop US$14.36 and 24 hours later the complete
guide to what I should have done to prepare for the apocalypse shows up on
my doorstep. Amazon keeps Y2KChaos' site operator up to date on his newfound
lucre ($2.15) through a weekly email that tallies sales totals.
Actually, our friendly site operator doesn't get paid the $2.15 then and
there. According to the contract he signed with Amazon, payment is made on
a quarterly basis and after the total amount of commission equals or exceeds
$100. Out of courtesy, though, Amazon pays affiliates once they reach $10
of affiliate fees. In any case, a site must still generate $67 (15 percent of $67 is
$10.05) in book sales before it gets paid anything.