Marketing is one of the most expensive activities in any business—you have to pay a graphic artist, an advertising company, and then you have to pay for the actual impressions and clicks you get on the advertising platform of your choice.
But what if there is a free way to do it?
Yes, there is. It is not 100% free, but you only pay for successful sales. It is called affiliate marketing. Today, I will show you 4 reasons you should develop an affiliate marketing program for your business.
It is almost free
In affiliate marketing, you convince people, especially content creators, to promote your product. Once they make a sale, you give them a commission. However, you do not have to pay for their actual efforts.
So, how does this work?
The first thing you have to do is to set-up your affiliate marketing program. You can set it up on your website, or you can go to affiliate marketing sites like ClickBank.
No matter what you choose, you have to create a commission program. It is not uncommon to give a 20% commission from the gross sale.
Let us say that your product sells for $100. If you give a 20% commission, you will pay $20 to the affiliate marketer for every successful sale.
Once your rules and system are set-up, you can now ask affiliate marketers to promote your product. You have to provide them with banners, advertising materials, ad copy, and anything they need to promote your product.
As they promote your business, you do not have to pay them anything. Affiliate marketing is commission-based. You will only pay them if they made a successful sale. Naturally, you want to put extra time in here. You should only pay them once the buyer’s refund time-frame has lapsed, or if you are now sure that the buyer will not cancel or file a chargeback.
As you can see, you can have hundreds of affiliate marketers, but you do not have to spend a dime—you only pay when a sale is made, and only if the sale is final.
It increases your sales revenues
Just think about the amount of money you are saving with affiliate marketers. Here are some examples:
- You do not pay salaried employees
- You do not have to pay for many ad materials
- You do not have to pay for ad spaces
- You do not have to pay for ad clicks and impressions
In affiliate marketing, it is up to the affiliate marketer to decide how he wants to advertise your business. Many of these will offer your product on their blogs. Many will also promote your products on their YouTube channels.
You do not have to pay them for doing this. You only pay them a commission.
Because you are saving a lot of money, you are going to increase your net profit. One trick you can do here is to increase your prices. Let us say that you want to maintain $90 in sales per item after paying the 20% commission. In this case, you can increase your sale price to $115. After paying 20% to the affiliate marketer, you still have $92 left.
Because there are dozens or even hundreds of affiliate marketers who will sell your products, you can expect to have a boost in sales. This is bound to happen if the affiliate marketers you get are those who have a massive following—influencers on different social media channels.
It puts you in control
Because you own the business, you are in control of your affiliate marketing program. It is up to you to increase or reduce your commission rates. However, I do not really advice lowering the commission rate, as this makes affiliate marketers demotivated to promote your products.
Another model you can do is the recurring commission. I only suggest this if you are selling a subscription-based product or service.
In a recurring commission, you pay a commission to the successful affiliate marketer on a monthly basis. As long as the customer he referred is paying, you will pay him a commission. Some businesses pay a recurring commission only for a year and then stop after that.
An alternative to this is paying a commission worth an entire month of subscription. For example, if you are charging $15 per month from a customer, you can pay the affiliate marketer $15 for each customer he refers to (a customer who subscribes).
After paying the first month of commission, no more commission will be given to the affiliate marketer, even if the customer he referred is an annual subscriber.
As you can see, you are in control. You can create various commission programs for your campaign. You can also set your own rules, provided that you built your affiliate marketing program on your website. If you use platforms like Rakuten and ClickBank, these companies have their own rules.
It is a big industry
The affiliate marketing industry is huge. It is dominated by large companies like Amazon and ClickBank. Affiliate marketing is a billion-dollar industry.
Because of its size, there is no shortage of affiliate marketers. You can find them everywhere—YouTube, blogs, Facebook, Instagram, and so much more.
If you are a content consumer, I can tell you that if you see product recommendations from any content, I bet my bottom dollar that it is an affiliate link.
And if that content creator is in the same niche as yours, then surely you can ask him to promote your business, provided that you make an interesting offer.
Now, it has a caveat.
Because it is huge and easy to set-up, you are competing against many others who are in the same industry as yours. If you are selling a course, there are many other course creators like you who need the services of affiliate marketers.
So, how will you stand out?
There are two key secrets here:
- Advertising materials
- Commission size
For advertising materials, you have to provide several banners and ad copies to your affiliate marketers. This will help them choose which banner fits their blog or channels.
For the commission size, you have to offer something that is reasonable for you and the affiliate marketer. Do not be like Amazon—it pays only 4% on average for affiliate commissions.
If you want to shine and be recognized in the industry, you have to offer at least 20% in commissions. You can also do a tiered commission like what others do.
In a tiered commission, you increase the commission as the marketer’s sales get higher. Then, you reset it back to its original state after every month or quarter.
Summary: reasons you should develop an affiliate marketing program for your business
Affiliate marketing is going to work if your commissions are generous. The thing with affiliate marketers is that they only want to support brands and products that are worth their while.
The good thing about it is that you no longer have to create your own code to make it happen. On any website building platform, you will find apps for affiliate marketing that you can install.
Or, you can use affiliate marketing sites like ClickBank, CJ Affiliates, Rakuten, and so many more. Start an affiliate marketing program now, and then work on convincing marketers to promote your products.
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