How to Evaluate Potential Affiliate Programs
In an earlier article we talked about the affiliate model being one of the easiest ways to get your feet wet in e-commerce.
Once you’ve decided to give affiliate marketing a go, it’s time to find the best affiliate partners for your niche. This requires some research on your part. With the right systematic approach, it shouldn’t take too long though.
Remember, you want to build your affiliate business on a solid foundation — quality merchant-partners (and products) are essential, so find good programs and eliminate poor ones.
Watch for the following criteria as you evaluate potential programs…
+ = positive
– = negative
* = caution
Are these + positive factors present?
+ High quality product or service — remember, it’s your reputation that’s on the line (and online!). Don’t recommend products that UNDERdeliver.
+ Merchant has a good site that sells effectively.
+ Ability for affiliate to link straight to individual products, rather than just to the home page. (If the visitor has to find the product that you recommend, your conversion rate plummets.)
+ Type of payment model — Pay-per-sale and pay-per-lead are good. This is true “performance marketing.” If your referred visitor delivers the desired response, you get paid. What about “pay-per-click?” See the red flags below.
+ Affiliate Support…
- Accurate, reliable real-time online accounting, preferably with some kind of ability to “audit” by spot-checking
- Detailed traffic and linking stats
- Notification by email when a sale is made
- Useful marketing assistance, provides traffic-building and sales-getting tools
- High-quality newsletter that educates, trains, and accounts for amounts earned
- Professional marketing materials available
- Affiliates receive discount on products
- Great affiliate support is important for a “between the lines” reason, too. It indicates a high degree of commitment to the program and its affiliates.
+ Pays good commission — hard goods have lower margins than digital ones. So their commissions will be lower. Still, you should make at least 10% (hard good) or 20% (digital good) on any product that you recommend. Don’t be scared off by low-priced products if they offer a good % commission — the lower dollar value per sale is offset by the higher sales volume.
+ Must be free (no charge) to join, no need to buy the product.
+ Lifetime commission — if the program pays a commission on future sales of other products to customers that you refer, this is a huge plus.
+ Two-tier commission — if the program pays a commission on affiliates who join because of you, this is also great.
+ Lifetime cookie — do you receive a commission if the person you referred returns and buys within one month? Three months? The cookie that tracks this should not expire. This policy should also be backed by database-matching — that way, a merchant can still identify a customer should the cookie be deleted — heck, the company can even re-write the cookie in that case. A true lifetime cookie.
+ Restriction on number of affiliates — you won’t find many of these. But if you do find one, grab it.
+ Monthly payment, with reasonable minimum.
Do all those plus signs have to be present? No. But the more, the merrier.
Watch out for these negative (–) factors
– Slow and/or poor support.
– Unethical conduct of any kind.
– Reports of late, or lack of, payments.
– Allows spam, or seems to spam themselves.
– Supports, or is slow to condemn, scumware programs that deprive hard-working affiliates of their commissions.
– Defective affiliate-joining process. Hey, if they can’t get this right…!
– Clauses in the agreement that you find unacceptable.
Example… No exclusivity (i.e., you should be allowed to represent more than one book vendor).
… and perhaps the most worrisome of all…
– “The dark side” of affiliate programs. Is the program really just a way to legally bribe folks to recommend overpriced, UNDERdelivering products in order to collect excessive commissions?
There’s a commission that is “just right” for each product. If the commission is too low, it’s not interesting enough for affiliates. If it’s too high, it’s a consumer rip-off. (Excessive commissions also push the price of the product up to levels that cannot survive for long in the competitive Web marketplace.)
Your job as an affiliate is an important one. You deliver high-value content that gains the confidence and trust of your visitor/reader. You include recommendations and referrals to your new friends as part of your service and content. Recommending anything less than sterling products is simply sophisticated, subtle fraud.
If you find products that fit your theme but that don’t deliver quality, walk away. Don’t recommend such products — in the long run, your reputation will be ruined. And so will your business.
On the other hand, when your visitors are rewarded repeatedly by your rich recommendations, their increasing like and respect of your judgment will keep them coming back for more!
Watch for these * warning signs
*“Pay-per-click” method of payment. In this method, you get paid whenever a visitor clicks on your link. No purchase or lead-generation necessary.
Unfortunately, it’s wide open for abuse — very sophisticated folks create incentives to get thousands of people to click on their links. But the visitors couldn’t care less about the products being promoted. It’s virtually unstoppable. And merchants end up paying for nothing, so merchants cancel or change the program.
In theory, pay-per-click affiliate programs are a good idea. Unfortunately, they attract “scam artist affiliates.” Sooner or later, merchants seem to throw in the towel against the onslaught. So be wary — this kind of affiliate programs tends to dissolve or mutate into a different model.
* Multi-tier commission — this is online MLM, which is perfectly legal. Do your due diligence to make sure, of course, that a multi-tier program is not an illegal pyramid scheme. If the “game” is to earn income by signing up others, you most likely are dealing with a pyramid. Many people confuse honest, legal MLM with dishonest, scammy pyramid schemes.
With MLM (also known as Network Marketing), it becomes as important to build a strong downline as it does to sell product. Also, MLM companies are subject to numerous regulations (to prevent them from becoming pyramids). Not all online companies are complying (or even know about this!).
If multi-tier interests you, I recommend that you check out established offline MLMs that are now online.
Or… investigate all others extremely carefully before you decide to invest a lot of time in these.
* Poor or little info about affiliate program available. What kind of priority could it have?
* Dead links on merchant site.
* No clear anti-spamming policy visible on site.
* Site that promotes “get-rich-quick” gimmicks.
* Financially unstable. You can lose a lot of momentum if a company goes under, especially if you were banking on lifetime customer/2-tier promises.
* Poor traffic stats, and low Google PageRank score. Outboard tools like MajesticSEO can tell you a lot about a site. If there’s no traffic, how successful can it really be?
Don’t worry about identifying all of the above criteria before you join. Some can only be found after joining. Others only become clear over the weeks that follow. But keep them all in mind. Don’t get hurt. Spend your time on smart, stable, ethical companies with great products.
Get more advice for building and monetizing your website business!