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Now that the idea of doing business over the internet has been firmly established, many potential internet businessmen are searching for the best way to do business. Usually the choice comes down to whether you want to set up your own business and online store, or sign up for an affiliate program.
First of all, let's define what we mean by an affiliate program. An affiliate program is basically an internet business set up by someone else. They could be selling physical goods, education, information or any other products that can be sold online. By signing up as their affiliate, you are helping them promote their business or store. In return, they will pay you a commission for each sale you bring them. The amount of commission varies between different affiliate programs. Examples of affiliate programs include Amazon.com and Wordtracker.
1) EARNINGS
So how does an affiliate program differ from starting your own online store? Let's start by looking at the potential earnings. (After all, the main reason everyone wants to start an internet business is for the money). When you sign up for an affiliate program, you will be paid a commission for each sale you refer to the online store. This commission can range from 5% to 15% for physical products, and possibly up to 50% or more for virtual products such as subscriptions and ebooks.
On the other hand, if you start your own store, your profit can be much higher. For virtual products, your profit can be 100% of your selling price. After all, once the newsletter or ebook is created, you do not need to spend any more effort. When someone buys your ebook, they just download it from your website. If you are selling a physical product, your profit depends on whether you are manufacturing the product yourself, or buying from a wholesaler or dropshipping company. Your profit in this case could easily be more than 40% or 50%.
So, if you only consider the potential earnings, starting your own business is more lucrative than joining an affiliate program.
2) LOGISTICS
However, money isn't everything (Or so they say). When you are starting your own internet business, there are a number of logistic issues you need to look at. Here are a few things you would need to take care of:
a) Create your website
b) Design your product (if you are selling new products)
c) Create your product (if you are selling new physical products, or any virtual products)
d) Set up an online store
e) Set up a merchant account or payment gateway
f) Set up a warehouse or storage space (if you are selling physical products)
g) Have procedures and staff ready to fulfill orders
h) Set up an affiliate program to get others to market the products for you
i) Monitor for fraud
j) Monitor stock levels
As they say, "No pain, no gain". Having your own store pays very well, but requires a substantial time investment from you.
On the other hand, if you sign up for an affiliate program, all you need to do is set up a website to promote the program. All the ads, banners, marketing text etc will be provided to you by the affiliate program. Your only responsibilities would be to get people to visit your website, and hopefully click on the affiliate links to buy the products that you are promoting.
3) CONVERSION
Whether you have your own business or are promoting an affiliate program, the bottom line is the conversion rate, or the percentage of visitors that actually buy something from you. A number of factors influence this conversion rate. Factors as quality of the product, quality of the website, customer support are all important. However, I personally believe that the most important factor is trust.
When a potential customer arrives at your website, he will need to trust your site enough for him to be willing to buy from you. After all, on the internet you are just a faceless salesman. He doesn't know who is actually running the site and whether he will actually get the goods that he orders.
Having said that, one of the key methods of garnering trust is by recommendation and referral. If a store is being referred to or recommended by another website, the potential customer will feel that the store is trustworthy. After all, if the store is not trustworthy, why would the other website recommend it?
This is where affiliate programs shine. When you refer a potential customer to the store for which you are an affiliate, the customer will feel more relieved, since the store is being recommended by your site, a 3rd party. The customer will be more likely to buy from the store, benefiting both the store, and you as well.
There are both pros and cons to joining an affiliate program. You might earn less with an affiliate program compared to starting your own store, but I believe the benefits of not having to be responsible for the logistics makes affiliate programs are very viable "passive" source of income.
Steven is the webmaster of http://www.onlinebiz-help.com - Your Guide To Internet Business. His website contains various resources on affiliate programs and internet marketing advice to help you succeed in your internet business.
MORE AFFILIATE REVENUE RESOURCES updated Thu. February / 09 / 2012Disney's Earnings Beat; CEO Bob Iger Talks Piracy, Parks CNBC.com Increased guest spending and attendance at the parks, and higher advertising rates and affiliate revenue at the media networks drove the earnings upside. The revenue fell short of analyst expectations (Disney doesn't provide guidance) – at $10.779 ... |
 Globe and Mail | Disney derring-do New York Post “Affiliate revenue will kick up due to Comcast and other deals that will be negotiated,” Disney CEO Bob Iger said yesterday on a conference call with analysts to discuss first-quarter results. Iger noted the Mouse House doesn't yet have deals with ... The Walt Disney Company Reports First Quarter Earnings Disney Posts 7% Broadcast Revenue Drop Walt Disney's CEO Discusses Q1 2012 Results - Earnings Call Transcript |
 Telegraph.co.uk | News Corp. Earnings Jump in Second Quarter Broadcasting & Cable Affiliate revenue rose 9% at the domestic cable channels. Operating income for the television unit, which includes Fox Broadcasting, rose 25% to $189 million from $151 million. The company said the growth was the result of increased broadcast network ... News Corporation Reports Second Quarter Net Income of $1.06 Billion Headwinds Fail to Deter News Corp. |
 The Frisky | Pinterest Is Making Money In A Slightly Shady Way The Frisky It's also a boon for a company like Skimlinks, which takes 25% of all affiliate revenue. So what's the problem here? Well, Pinterest hasn't been disclosing to users when and how it is making money from their posts. If I pin a link to a cute pair of ... Skimlinks is the real story behind Pinterest's success |
AMD, Nike, Disney, Panera Bread Among Stocks Driving Big News Feb. 7th Wall St. Cheat Sheet The increase at ESPN was driven by higher affiliate revenue reflecting contractual rate increases and a reduction in revenue deferrals related to annual program commitments. During the quarter, ESPN deferred $190M of revenue compared to $266M in the ... |
Fox Studio, TV Divisions Boost News Corp. Q2 Profits Despite Hacking Investigation Reuters A little bit of everything contributed to the higher figures, from a nine percent growth in affiliate revenue to a six percent increase in advertising revenue. FX in particular continued to stand out as a top performer, while the NBA lockout both ... |
Fox on Top Multichannel News SNL Kagan calculates FNC's affiliate revenue at $985.3 million in 2012, based on 82 cents per sub each month. “The network is getting strong monthly subscriber fee increases, up from 58 cents in 2009,” according to Baine, who projects average license ... |
 Fortune | It's time for Disney to cut ABC loose Fortune Disney (DIS) blamed the poor showing at ABC on lower affiliate revenue following the end of Oprah Winfrey's popular talk show and a decrease in political ad spending, as it was not an election year. While both may explain a decrease in revenue, ... |
Cruise line, theme parks propel Disney profit Orlando Sentinel Operating income at Disney's media networks rose 12 percent for the quarter to $1.2 billion, as higher affiliate revenue at ESPN and the Disney Channel cable stations more than offset declines at broadcast station ABC. Operating income at Disney's ... |
Viacom's CEO Discusses Q1 2012 Results - Earnings Call Transcript Seeking Alpha We expect our affiliate revenue to grow on an annualized basis in the high-single to low-double digit for the foreseeable future. As we unlock value for our content across platform, we're unlocking growth potential across global markets as well, ... |
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AFFILIATE REVENUE RELATED ARTICLES:
Affiliate Program Marketing: 10 Significant Sharp Ways To Increase Your Affiliate Commissions Millions of people sign up for affiliate programs, but have no clue on how to promote and market them effectively to generate piles of cash. Below are 10 significant sharp ways to start generating a lot of sales and commissions, starting now:1. 6 BIG Benefits To Selling Big Ticket Items As An Affiliate Today, we'll cover another set of benefits to selling Big Ticket items. BUT? this time we'll specifically focus on the benefits of selling Big Ticket items as an AFFILIATE. 6 Things to Increase Your Affiliate Income So you've signed up for affiliate programs, posted links around the net but you're still only making pocket change? Wonder what others are doing that you aren't? Below you will find 6 things that every affiliate marketer needs to increase their income.#1 - Your own Website:Build a website to promote the product. How to Become a Super-Affiliate Did you begin your affiliate marketing business like this? You surf the internet looking for an internet marketing product you can affiliate with and sell (even though you know nothing about internet marketing), sign up for the program and get your link, and then visit traffic exchanges and safelists, advertising your affiliate site. At the end of the day, week, or month, you wonder why you didn't sell one product. How to Build a Huge Opt-In List as an Affiliate One of the biggest mistakes I see affiliates making everyday is that their building a short-term business where they just make a small sale - one sale at a time. If they stop running ads today, their business would shut down! The strategy we're going to discuss now will allow any affiliate to build a long-term business. High Earning Affiliate Is It Possible? Affiliate Program have exploded on the internet. Thousand of people join them every day. Leverage Your Way to Profits With Joint Ventures You can't conduct business on the internet for very long without hearing the term "Joint Venture", but do you really understand them or how and why a Joint Venture works? In broad, simple terms -- a Joint Venture is partnering with others to create a win/win situation for everyone involved. But just what does that mean? How do you identify a good Joint Venture situation? How do you structure the partnership so that everyone wins? How do you approach a potential Joint Venture partner? There are tons of questions, and I'll try to answer them all. How To Start Your Own Affiliate Program 1. Why Start Your Own Affiliate Program?Multiple web sites and distributors selling your product can result in increased sales and profits. Launching Your Affiliate Program Correctly To any Internet Marketer these days an affiliate program is absolutely essential marketing method of achieving a decent e-growth. Allowing others to promote your products or services can be the most efficient way of selling your products as you only pay for successful results, whether these are leads, sales Or traffic. How to make money with Affiliate Programs - The Sensible Way Every day, thousands of would-be marketers scour the internet looking for any and every affiliate program, sign up, sit back and wait for the money to pour in and get frustrated just as fast when the bank balance still shows a big, fat ZERO!There are tons of guru's floating around and even more eBooks and articles claiming to know the latest and greatest trick to make tons of money with no effort at all (oh and of course, unless you use their method then you will never, ever get anywhere in your online business and stay broke the rest of your life). We've all seen these before. 8 Basic Rules for Choosing The Right Affiliate Program Joining an Affiliate Program is a great way to start earning a sizeable income on the Internet without many of the hassles that come with running your own business.But the problem is? there are so much affiliate programs out there for you. Why Top-earning Affiliates Have Their Own Domains And Websites Many affiliate programs usually provide special web pages for their affiliates. This is one of the reasons why it may appear very strange, at first, that most top affiliates and the high earners from affiliate programs will most certainly always have their own websites, complete with their own domains specifically for promoting a certain affiliate program that they are involved in. Five Knockout Affiliate Tips Here are five "hook em in the jaw" affiliate tips that really work. Implement them and see how well they work for you. How to Boost Your Affiliate Commissions by almost 30% Affiliate marketing is one tough business. Everyone online today is looking to make or save money in any way they can. 10 Hot Ways To Sell Your Products Like Crazy 1. Turn your ad copy into a story or article. Affiliates: 3 Things You Should Own Though You Don't Own A Product. 1. Your Own web site: Most affiliates put a redirect link directly to their affiliate product. A Wake Up Call To Always Remember I received two emails this weekend. Both were as a result of autoresponder follow ups these people were receiving from my business. Overachieving Your Way to Super Affiliate Stardom Internet business is a bit confusing especially if you're not really knowledgeable at it. You will also be left completely blank, asking yourself as to what type of online business is best for you. 12 Tips On Selecting An Affiliate Program People sign up with affiliate programs everyday, looking to expand their income and make a good living for their efforts. The unfortunate part of all this is that most people will sign up with a company without really knowing what the company is all about. Common Mistakes Made by Unsuccessful Affiliates A vast majority of successful online entrepreneurs are affiliates of successful websites on the net. This is what has continuously attracted many people into joining the ranks of affiliates.
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