Q: What is an affiliate?
A: An affiliate is a person who affiliates himself or herself with a program, either by registering, or joining it. At the time of registration, the affiliate must agree to certain terms and conditions that are required in order to be allowed to join the program.
Becoming an affiliate does NOT make one an employee of the company, and the company will not report your income to the IRS or withold taxes from your payments. Depending on the company involved, you may or may not receive a Form 10-99 at the end of the year. For this reason, you need to keep good financial records in order to properly pay your income taxes at the end of the year (approximately 20% of your total earnings).
Now that all the legal stuff is out of the way, let's have a look at some of the affiliate programs out there.
Q: What are the two kinds of affiliate products?
A: There are two distinct kinds of affiliate products that you can sell - Physical products, and Digital products.
Q: What are affiliate programs & how do they work?
A: The best thing about all affiliate programs is that you do not have to physically ship, store, or handle the goods you are selling! All bookkeeping is done for you, and you are paid a "commission" in exchange for sending the buyer to the product.
This is a beautiful set-up really! You do not have to collect the money, deliver the goods or deal with customer complaints! The actual seller handles everything. The only thing you "collect" is your commission!
Your only job, to earn that commission, is to get people to the product's sales page. Depending on the kind of product you are promoting, you can expect commissions from 3% to 75%.
Q: Where do I go to find physical products to sell?
A: Physical products are usually sold by Amazon, Commission Junction, and Linkshare. There are others, but they are not as well known, and I have only dealt with these top three. They are reliable and pay on time.
Q: How much can I earn from selling physical products?
A: Physical products, due to the fact that they are a tangible, solid item with expenses attached to their manufacturing, shipping, etc., will pay only 3% to about 10% to affiliates. Everyone else down the line wants their "cut" of the profits, so affiliates make a smaller commission. The good news is that, if the customer returns to the same business and re-orders, that person's future purchases will pay commissions to you. You sell once and get paid when they order again.
Q: How much can I earn from selling digital products?
A: Digital products, however, are a whole different story! Since the products, once created, can be reproduced at will by downloading copies of the original, and have very little if any cost attached to them, other than the time it took to create it, they pay a much higher commission. Commissions for digital products usually start around 15% and go all the way up to 75%.
My choice of products, for that reason, is usually the digital, unless I have a niche site that can easily support the offer of a physical product that is closely related to the main subject of the site.
Q: Where do I go to find digital products to sell?
A: Some very well known affiliate programs that offer digital products are Clickbank and Paydotcom. These two programs allow you to sell other people's digital products. What I love about these two programs, is the fact that, even though there are thousands of people's products (these people are called "Vendors") that you can promote, they are all sold through Clickbank or Paydotcom (and others) and you are paid one check by the program, no matter if you sold items from hundreds of vendors.
These programs also have "Reports" you can print out that let you know how much you have sold and what commissions you are paid. These help a lot come tax time.
Q: Can I make fast money with little work using these programs?
A: No matter how easy these programs make it seem, there are no "free lunches" on the Internet. Anyone telling you that you can make a ton of cash online with little or not effort is feeding you a bill of goods! It can be hard work if you want to make serious money on the Internet.
Keep in mind that you are trying to earn money. That means you are building a business. Treat it like a business, because that is what it is! You need to have a business plan that states what you plan to do, how you plan to proceed, and where you want to be at the end of the year, the end of 5 years, etc.
You also need to budget for your advertising and you need to keep accurate financial records.
The Internet is a great vehicle that can zoom you to financial success in a lot less time than a brick and morter business, but you still have to keep to the basics of building a sucessful business. Skimp now, and cry later ( or pull your hair out)!
Whats Next?:
Continue to the next lesson by clicking the link below:
What You Need To Proceed and Succeed!
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