How affiliate marketing can earn you extra bucks

While e-commerce players often bemoan the reality that customers can visit or depart a Web site with a single mouse-click, others are embracing that ease of navigation to stoke sales. Specifically, they are paying Web site owners for every mouse-click that sends a potential customer their way — a concept known as Web affiliate marketing.

“Affiliate programs can do wonders for a business, if run properly,” says Peter Kent, author of “Poor Richard's Internet Marketing and Promotions,” published by TopFloor Publishing (www.topfloor.com).

Agrees Barry Silverstein, author of “Business-to-Business Internet Marketing,” published by Maximum Press (www.maxpress.com): “The affiliate concept is so uncomplicated and easy for both parties that it is possible for everybody to be a winner. There is little risk on the part of either the affiliate program sponsor or the affiliate.”

Auto dealers can benefit from affiliate programs it two ways:

A pioneer of affiliate marketing is book-sellerAmazon.com (www.amazon.com).

Under Amazon.com's model, Web sites can sign on with Amazon.com as “associates,” and offer links to Amazon.com's site from their own. Every time a Web site visitor clicks on the Amazon.com link and buys something from the bookseller, the Amazon associate gets a small commission.

Currently, Amazon.com's affiliate program is one of the most commonly used affiliate models on the Web. Commission's typically range 1%-15%.

Derivatives of the model sometimes offer a two-tier commission structure — paying higher trafficked Web sites higher commissions for referrals.

Other Web sites using this model include CDNow (www.cdnow.com) and Beyond.com (www.beyond.com), says Susan Sweeney, author of “101 Ways To Promote Your Web Site,” also published by Maximum Press (www.maxpress.com).

Currently, most auto dealers with affiliate programs are following the Amazon.com model. 1Stopauto.com (www.1stopauto.com), for example, pays $6 to its affiliates for each user they refer that fills out a purchase request for information on a new vehicle and $4 for each user looking for info on a used vehicle.

Autobytel.ca (www.autobytel.ca), pays $3 for each new-auto purchase request, and $1.50 for a used-vehicle request.

Peoplefirst.com (www.peoplefirst.com), an online lender, pays $50 for every auto loan secured online that originates with an affiliate.

EZ Title Search (www.eztitlesearch.com) pays $2 for each new customer gleaned from an affiliate. Even parts retailers are getting into the act.

CarParts.com (www.carparts.com), is paying its affiliates 5% on every $1,000-or-under sale an affiliate sends its way, 8% on sales of $1,000 to $9,999 and 10% on sales above $10,000.

Meanwhile, a second genre of affiliate programs pays a flat referral fee.

Essentially, such affiliate program creators pay a Web site a fixed amount for every visitor that clicks through to the program creator's home page, and engages in predefined actions, Sweeney says.

The required action is quite often making a purchase, downloading a free demo, ordering a catalog, requesting a price quote, or the like, she adds. Sites offering flat-fee commissions include JobMatch (www.jobmatch.com), Bach Systems (www.bachsys.com) and Dash (www.dash.com/wmintro.asp).

The third major genre of affiliate programs reward referring sites that agree to run a banner ad of the sponsoring company on their site. Every time a visitor clicks on the banner ad, the participating Web site gets a flat fee. Examples of banner ad affiliate programs include ValueClick (www.valueclick.com), PennyWeb.com (www.pennyweb.com) and Teknosurf Adwave (www.teknosurf.com), Sweeney says.

While undisputedly tempting, affiliate programs currently number in the hundreds, if not thousands.

Auto dealers considering participation in the affiliate marketing programs of other businesses — such as booksellers, office supplies and the like — should evaluate those programs carefully.

“Don't assume that an affiliate program or its sponsor is legitimate, just because you find it in a directory,” Silverstein says.

As with any other business venture, unknown entities need to be investigated.

Find out how long the program principals have been in business; how many affiliates are involved and ask for references.

“Typically, your affiliate program will be more successful if the sponsor's products or services are complementary to your own,” Silverstein says. “You should think about drawing a relationship between the sponsor's offerings and your site.”

Refer-it.com tracks more than 800 businesses offering e-commerce, Business-2-Business and telecommunications solutions that reward affiliates with pay-per-click programs.

Once you've decided to sign up with one or more affiliate programs, diligent and ongoing review of the program's performance is essential.

“Evaluate the sponsor's service and make sure your visitors are satisfied,” Silverstein says. Affiliate programs should enhance a site — not take away from it.

“If you fill your site with too many affiliate programs, your visitors may perceive that you are more interested in making money than servicing their needs,” he says.

Good places to start evaluating the spectrum of affiliate programs available on the Web include Iboost (www.iboost.com) and Refer-It (www.refer-it.com), Silverstein says. Currently, platinum grade examples of affiliate marketing programs in action include Art.Com (www.art.com), BidFocus (www.bidfocus.com) and GeoCities' “Pages That Pay” (www.geocities.com), according to Silverstein.

“While Art.com is a consumer site, the ‘world's largest art gallery’ has rapidly become a model of affiliate marketing,” Silverstein says. The reason: Art.com offers its affiliates a 15% commission — one of the highest on the Net. And the company helps affiliates customize their own online art galleries, add hundreds of custom banners and monitor programming success via an online reporting system, Silverstein says.

BidFocus, billed as “the #1 bid search company on the Internet,” provides sales leads and bid opportunity searches for businesses, Silverstein says.

Essentially, the business searches thousands of state, city, institutional, federal, commercial and industrial procurement agencies very day, and matches sales leads and bid opportunities for the participating company. The site pays affiliates a commission for both sales referred from a Web site, and sales generated via additional affiliates you sign up.

As for Geocities program: “This super-affiliate program allows GeoCities' 3.5 million members — each of whom has a Web page — to sell products from 16 Web merchants — including BarnesandNoble.com, Egghead.com, Net2Phone.com and Staples.com,” Silverstein says.

“While members can include multiple merchant affiliate links on their pages, they can also gain access to a consolidated report of all activity from GeoCities,” he says.

Businesses that catch the affiliate program bug often decide to create their own program. For such pioneers, Kent has some simple advice.

“The Good News is that affiliate programs really do work. The bad news is that they can be difficult to set up and a lot of work to run,” he says.

Those not easily daunted can check out services that will aid entrepreneurs in setting up an affiliate program such as the Affiliate Shop (www.affili-ateshop.com), Affiliate Zone (www.affiliate-zone.com), Your own Associate Program (www.palis.com/new/yoap7), Commission Junction (www.commissionjunction.com) and LinkShare (http://linkshare.com), Kent says.

Joe Dysart is an Internet business consultant based in Thousand Oaks, CA. He can be reached by calling or clicking on the following: phone: 805 379-3841; e-mail: [email protected]; Web: www.digitalubiquity.com.