What is Affiliate Marketing? Part 2

by Brian on April 13, 2010

Yesterday we talked about “What is Affiliate Marketing?”

We covered a bit, but I felt like we needed to cover a bit more.

The 3 most popular affiliate programs are:

  1. Pay Per Click (PPC)
    This is when someone “clicks” on an ad or link that you have placed on your site and you get paid. The most recognized Pay Per Click affiliate program is Google AdSense.
  2. Pay Per Lead (PPL)
    This is when a potential client is introduced to a company’s products or services through your website or other advertising. Typically the potential client will be required to fill out a registration/ information page or place a call to the company’s call center for you to get credit.
  3. Pay Per Sale (PPS)
    This is when a buyer purchases a product from a company through an affiliate link on your site, a link through an advertisement you placed or some other type of tracking method.

    You get paid for each sale that is made; it can be a flat rate or a percentage of the total sale… If it’s a recurring payment, you may get a percentage of the monthly or annual payment for the life of each customer you refer.

While there is a place for Pay Per Click and Pay Per Lead Affiliate Programs… today I’m going to cover Pay Per Sale Affiliate Programs.

There are 2 typical types of Pay Per Sale Affiliate Programs

1. One-tier affiliate PPS programs
In one-tier affiliate PPS programs, you get commission if one of your prospects buys anything from the company’s website through your affiliate link.

Sometimes one tiered affiliate programs pay a residual commission if it’s a subscription product. For example: The Third Tribe Marketing Affiliate Program gives a recurring commission for every month a person is a member.

If the buyer decides they want to be an affiliate for the company you are promoting, you get nothing for their efforts with one-tier affiliate programs. Even if someone you bring on becomes the #1 affiliate in the company, you won’t receive anything above and beyond what your individual efforts bring to the table.

Don’t discount one-tiered affiliate programs. Just because they only pay you on one level doesn’t mean you shouldn’t promote them. There are several site owners that make tons of money from one-tiered affiliate programs.

One of the one-tier affiliate programs we use is Amazon’s Affiliate Program. It allows us to recommend different products through our sites.  Sign up for it… It’s a great source for generating extra cash.

About Amazon’s Affiliate Program:

This is one of our favorite affiliate programs because Amazon offers millions of unique new, refurbished and used items such as books, movies, music, games, digital downloads, electronics, computers, home & garden, toys, kids & baby, grocery, apparel, shoes, jewelry, health beauty, sports & outdoors, and tools, auto, industrial and about anything you can think of.

Benefits of the Amazon affiliate program:

4% to 15% paid each time a customer you’ve referred to Amazon.com makes a purchase (based upon the number of items you’ve referred, the more you refer the higher percentage you get paid).

2. Multi-tier affiliate PPS programs
In multi-tier affiliate programs, you get paid a commission if your prospect buys something, just like in a one-tiered program. But, you also get a chance to earn a commission on the second-tier or higher, depending upon the program.

What this means is that if someone signs up to promote the same affiliate program through your affiliate link, they become your sub-affiliate. In some programs, if another person signs up to be an affiliate through your sub-affiliate’s link, they become your sub-affiliate too.

As your sub-affiliate, anytime one of their prospects buys something through that program they get a commission and you get a commission. The further removed you are from your sub-affiliate, the smaller your commission is. If your sub-affiliate is on your 4th tier, you are going to get less than if they were on your 1st tier.

The best thing is that with most of these programs, you can have an unlimited number of 1st tier sub-affiliates with multiple affiliate programs, all generating passive income for you. So, there’s no limit to how big this source of revenue can be.

Multi-tier Affiliate Programs utilize Multi-Level Marketing, not to be confused with Network Marketing. Multi-Level Marketing is a business structure while Network Marketing is a stupid marketing method.

This is one of the two-tier affiliate programs we use:

SiteBuildIt
About the service:

  • The only, all-in-one, site-brainstorming-and-building-and-hosting-and-marketing, step-by-step system of software tools that delivers thriving, profitable business.
  • This is the system we used to create our first several websites. It taught us a lot.

Benefits of the affiliate program:

  • Free to join (Some affiliate programs you have to purchase before you are eligible to be an affiliate)
  • Earn $6-$250 for each Site Build It! (“SBI!”) Subscription
  • Receive an annual bonus commission on each SBI! Renewal
  • Earn 0-25% on tier two commissions (rate increases as your team’s sales increase)
  • Lifetime customer policy
  • Paid monthly

Do you find that you get better results from one-tier or multi-tier affiliate programs? What are some of your favorite affiliate programs and why?

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