Earning money online can be fun and serious challenge simultaneously. Sometimes one can learn a lot once decided to run online business. Some people can work 8 hours a day from 8 am to 5 pm, but online business workers can work 24/7. We are speaking about affiliate marketing here as one of the most profitable online business models in the world making millions of people rich and prosperous.
What is affiliate business? Wiki has got an exhaustive article about affiliate marketing explaining almost everything. “Almost everything” means that the essence of this business is clear, but no any choices suggested for a beginner or experienced online marketer. I will try to mention a few key points which may influence the decision and determination to run or continue this type of online business.
For those who never heard this term the explanation can be the following. Affiliate business model is when customer of a shop brings other customers and gets paid for the people he brought or the part of profit those people made to the shop. Of course, you do not need to be a customer of the shop yourself to advertise the shop itself and their goods, so then you are called a “partner”. Shop’s staff are bound by their contracts to some of legal issues, such as loyalty to the shop brand or prohibition to work for a competitor. “Partner” does not have such limitations, so he can advertise all competing shops and get “salary” from all of them. These are main principles of affiliate business. The main questions may be asked:
1. What shops and goods should I advertise?
2. How and where can advertise them?
3. How much and when I am getting paid?
Choosing the right niche
One of the main issues in affiliate marketing is choosing the right niches of goods and services to work with. All the markets have got competition. Some of them has got very harsh one as there are so many people and companies working in particular niche, that beginners should think very well, if it is worth starting at all. Affiliate business can be done everywhere where you sell goods or services online. You can sell dippers, jewelry, books, cleaning services, dating services, banking services, software, gaming, website hosting and hundreds of others. If you starting today, please keep in mind, that someone has started few years ago and has better expertise in the particular markets, but not necessarily about the advertised product or service. If you have been working with some products yourself and know them very well, it is the best way to continue working with them online. For example, if you were fixing cars for 10 years, or it is your hobby and you know everything about every part of the engine, it is normal that you can succeed in selling parts online, tuning services, maybe even used car selling can be an option.
Choose as narrow niche as possible in the beginning. Learn everything about the products. Investigate competitors (one of the way is simple, just enter the most general name of the product - for example “wooden toys” - in Google and you will see how many pages write about that) and possible partners. Check what people know about the products (to determine what they still do not know and needs to be explained). Learn about marketing of the selected products from the competitors. Try to offer something better than they do.
The main mistake in this business is advertising everything. Some people who work with sales usually say “I can sell everything”. When you know the psychology of the customer and speak with a person directly, this can be true. Online business cannot grant such opportunities as there is more anonymity - customer does not see the seller’s shops, warehouses, packages, salespeople; seller does not see the customers face, clothing, body language, mood etc. Therefore advertising anything usually ends with failure. Usually, but not necessarily always. Choosing the niche is an essential issue in the beginning, when starting from zero. Once you are advanced in internet marketing, you can easily work with few groups of goods and services as you already know the main principles how to advertise the product.
Choosing the right ways of advertisement
Hosting services (by the way Host1Plus has also a very nice affiliate program to start with) cannot be advertised in the same place as online poker or health and fitness goods because of different audiences, interests and the age groups. The banner advertising online poker in online book store will not be as effective as in gaming community website. Website hosting service links will not be probably clicked in the youth community of mobile accessories such as Java games and ringtones. Also you cannot send a newsletter advertising US instant loan services to people living in UK or Australia.
However they can be advertised in the same ways which are available to everyone:
- Website or blog, explaining everything about particular goods, writing news and interesting facts, glossary, reviews and comments about best options in the market etc.
- Email marketing - sending out newsletters about the latest promos
- Advertisement buying in Google or similar sites
- SEO (Search Engine Optimization) tricks
- Web 2.0 - working with potential customers in social networks - Facebook, Twitter or interest and location based ones
Mentioned ways are not enough, as everyone does that already. The unique approach to any market can earn much more money than you can ear using regular methods. One of the unique ways is tool creation. For example if you advertise financial services, you can create some helpful tools and attract lots of people using them and signing-up through your links and banners. Another way of earning is subscription based services to a “secret” information or tool. Every market has its own unique features which are used as main sales power; therefore the attention must be paid to them and corresponding ways of advertising.
Earning and getting paid
You probably expect the list of most profitable markets to start with. Unfortunately, there is no such list and cannot be because of the payment nature of affiliate business. Of course, majority of money is concentrated in porn, gambling, financial services and drug businesses because of the huge competition. But that does not necessarily mean that you can earn more advertising online poker rather than website hosting services.
Affiliate business is built on a simple principle - you are getting paid ONLY when your customer makes a purchase and uses the good or service. Very little affiliates work with so called CPM (Click per mille - impression) - paying for showing banners for the preset amount of times, for example 100,000 - as it does not define the conversion of advertisement. Majority of affiliates (some source says 80%) work with CPS (cost per sale) module which is known as share revenue - the merchant shares the profit or revenue with the affiliate for bringing the customer. If the services are continuing ones, the affiliate gets money from all the customers spent money lifetime. For example, affiliate has brought 100 customers to website hosting service. These customers buy additional hosting plans and packages, increases their bandwidths for additional prices, buy additional dedicated servers and pay monthly fees. Affiliate gets the percent from their money paid to hosting service and will continue once they will be paying more. The same situation is with online poker. If you bring a player in online poker room, you get the share of the rake he leaves for the online room. In both cases the money flows are lifetime if the customer does not leave the merchant service.
Another method of compensation is CPA (cost per action/acquisition) - one time single payment for a guaranteed customer, who buys the service and starts using it. For example, affiliate brought 100 customers to hosting service. All of them signed the contracts, paid money and started using their services. Affiliate received a fixed fee per each of them, let’s say $50, so in total he earned $50×100=$5000. That’s a one time payment, so affiliate does not care if one customer earned more or less than $50 to hosting company. Poker market has the same issue with real depositing player in poker room who add the money to virtual cashier and fulfill the required play requirements (collecting points, playing certain amount of raked hands etc.)
The question is which of these compensation methods can bring you more money. Share revenue will be collecting small money for each service and will pay back in long term. CPA money is quite quick, but guaranteed. Also you never know when one of your customers will spend lots of money and you will get the percentage from his payments. That’s the main reason why no one can tell exactly which market is more profitable.
Like in all kinds of businesses there are trusted companies and fraudsters. Affiliate business is not an exception, therefore before starting one should check if company is credible or not. It can be done in various communities where people share their advice and can tell if the company keeps the promise to pay money or not. If company is serious and working quite long in the market, it will not probably cheat as reputation can be lost immediately. Another issue is the unlawful methods of advertising, such as phishing, spamming, click fraud which are not tolerated by the majority of companies, therefore you should read their terms of services before starting any “sophisticated” advertisement.
Affiliate business is a hard one. It cannot be done from air, so everyone needs some investment. Affiliate business requires knowledge, so people who learn fast are the most successful. Affiliate business requires creativity and some basic knowledge of technologies, so knowing everything about one kind of goods or services is not enough. The main way to advertise is writing good quality texts. You can be the best marketer, but if you will write with mistakes and bad style, it can be very difficult to succeed. There are so many additional factors which can influence the success that some companies earn money even from teaching the beginner affiliates 
Personal advice. There are so many markets where competition is huge, but only among English speaking companies. If you see that you cannot win such battles, try to transfer them to other countries with other languages and internet usage habits. In the country I live there is only 1 company selling books online which offer the affiliate partnership option. Imagine what you can do in such countries with your knowledge and determination to earn money online as affiliate no matter if you just beginning, or already advanced.
