Online Affiliate Programs - Quickest Way to Start an Online Business

Online affiliate programs offer a turnkey solution for aspiring entrepreneurs to start their own online business.

Affiliate program or a revenue sharing program is a mutually beneficial agreement between the affiliate and the company wherein the affiliate is provided monetary incentives for promoting the products of the company. As there is no startup costs associated to get involved in an affiliate program, they are favorite among online entrepreneurs.

How Affiliate Programs Work

Once you join an affiliate program, you'll be provided with a unique link that is coded with your affiliate id. You'll be required to promote this unique link either through your website or by placing on other websites. When someone clicks on this link, the user is directed to your company's website and in the process a cookie is placed on the user's computer that contains essential information to credit you incase a sale is made.

Depending on the affiliate program's terms, this cookie will have a life span of 30 to 90 days or even a year in some programs. So if the user makes a purchase within this period after clicking on your link, you get the credit.

However, there is a catch here. If within the life span of the cookie, the user clicks on another affiliate link of a different affiliate, your cookie will be erased and a new cookie containing the other affiliate's id will be placed on the user's computer. If a sale is now made, the new affiliate will be credited and you won't get any credits.

The companies running such affiliate programs have sophisticated software to handle all the tracking and sales.

Understanding Affiliate Plans

Different affiliate programs have different plans and one must carefully analyze them before joining. Majority of them have simple plans in which the affiliate is paid direct commissions on all the sales made through his link.

Some online affiliate programs have complex tier plans in which you as an affiliate also have the power to recruit sub-affiliates under you. You'll be paid commissions on sales made by your sub-affiliates too. Such tier plans can be single tiered or 2 tiered. In 2 tiered plans, you'll be paid commissions on sales made by affiliates recruited by your sub-affiliates too. While this may sound tempting, direct commissions (sales made directly by you) in tiered plans are generally lower than those made in simple affiliate plans.

Advantages of Affiliate Programs

As an affiliate, you have the freedom to join any affiliate program you wish to. At the same time, you also have the freedom to stop promoting any program that you are not happy with.
The company provides with all the training, support and marketing materials to help you get started.
You don't have to worry about manufacturing and maintaining the products.
You don't have to worry about warehousing, transport, etc.
You don't have to handle customer complaints.
Your duty is just to divert traffic to your company's website. Tracking, closing of sale, collecting payment, handling complaints and refunds, and all other headaches associated with running a business are taken care of by your company.

Disadvantages of Affiliate Programs

Your company enjoys a major share of the revenue generated on the sale.
Your earnings are always limited and you never can enjoy the same level of earning as a business selling its own products. Of course there are millionaires made out of affiliate programs alone but they represent a fraction of the affiliate marketing industry.
Though it doesn't happen frequently, there is always a chance of your company closing down its affiliate program. If there are no similar affiliate programs in your industry, all your efforts in building and promoting your website go down the drain.
You may be competing with hundreds of affiliates of the same company.

Like you see, online affiliate programs have both their advantages as well as disadvantages. However, the advantages far outweigh the disadvantages and for aspiring online entrepreneurs, they offer an excellent opportunity to get started.

Do you have a tip or suggestion? Please share it with our visitors

Add this page to del.icio.us