Small Business Internet Guide-SBOguide

Maybe you've heard the Internet can be a good place to make money? Well, it can be, but maybe it's not so easy. If you've ever thought of trying to earn money using the Internet, you have most likely heard of the term Affiliate Marketing. So what is affiliate marketing, and is it right for you?

An affiliate marketer is a person who promotes another's product or service and earns a commission when someone buys the product or service the affiliate is promoting. You're essentially a commision sales person.

So how does this actually work in practice? The basic process is to select a viable product (something that fills a need and has market potential to a particular niche market), create a marketing plan, and then follow that up with the execution and monitoring of the plan.

• The affiliate finds a product they want to promote. ClickBank and Commission Junction are two of the most popular sources for affiliate products (there are many others). These companies aggregate the products and services of hundreds of different publishers and product offerings. They also, in part, manage the affiliate programs and the payment of commissions to the affiliates that promote the products and services that publishers create. The commissions paid to the affiliate usually range from a few percentage points to as much at 75% (or more) of the retail price of the product or service. This isn't all profit to the affiliate however, since the aggregators charge a fee for handling the transaction; and the affiliate incurs additional expense to advertise and promote the affiliate offer.

• So the profit, if any, from affiliate marketing, is the result of this formula [ (retail price of the product) X (commission percentage) - (aggregator fee) - (cost to advertise and promote the sale) - (cost of product returns) ]. You also need to account for some possible overhead cost - the cost to register a website and website hosting fees. It's possible to do this for free using sites like Squidoo, WordPress.com, and others. For most affiliate marketers, though, having your own website is the preferred way to build a long term sustainable business. Think of it as creating a piece of Internet real estate to which you own the rights. It's possible to earn a profit doing this - it's also very possible you will lose money. The risk is all on the affiliate, and the choices they choose to make.

• Not to state the obvious, but don't underestimate the necessity of a positive return on your investment when you're looking at affiliate marketing products. Pick products that have a profit margin that's high enough that you have a chance to be successful. A lot of products out there simply don't pay enough to give you a fighting chance. Vet your decision with the eye of an accountant - if it doesn't meet this criteria, move on and find one that does. Good free tools to analyze ClickBank offers are CBEngine and CB-Analytics.

• Once the affiliate selects a product or service to promote, they must create a method(s) to get the offer in front of potential customers. Some of the ways this can be done on the Internet are:

• Paid Search - this is the process of creating ads and paying a search engine company (usually Google, Microsoft, and/or Yahoo!) to run your ads in response to search terms that seekers of products or services type into the respective search engines. For the right price, your offer will get noticed. The Paid Search model charges you a fee anytime someone "clicks" on your ad. This click either routes the prospect to a "landing page" you have created where you make your case as to why they should buy the product or service you're promoting, or directly to the vendor's website. Whether or not this click results in a sale (conversion), is another matter entirely. Your product or service still needs to be something that people need or want to buy, and it has to be effectively marketed to convert interest or notice into a sale.

• Natural Search - a free process where through search engine optimization (SEO) practices, your product or service offer shows up in the search results page and the prospect hopefully is interested and clicks on your link. The actually optimization of your website may not be free, as the effort required to get a top listing in the search engines so that your offer is even seen can be substantial. If your links don't appear on the first page or two of the listings for the search query that you're optimizing for, you're likely to never be noticed. And, despite what some "make money gurus" claim (although it's almost always disclaimed in the fine print), there's certainly no guarantee that you will be successful using any of these methods.

• Social Marketing - this is where you write articles, posts, and possibly create videos extolling the virtues of your product or service. These articles and posts are placed on various ezine and social sites such as Facebook, MySpace, YouTube, Twitter, digg, StumbleUpon, Del.ico.us, reddit, Technorati, Yahoo! Buzz, Propeller, and many, many others, that link back to your affiliate offers or website.This allows you to create links (backlinks) that point to your product offer (landing page), and can improve your search eninge ranking.

• Monitor your progress using tools like Google Analytics and Microsoft Conversion Tracking. Monitoring what's going on is an absolute must. It's work to do this, so many (maybe most) marketers don't do it, but its essential to your success. If you don't measure your results, you can't make the corrections needed to make your business profitable.

If this all sounds like something you want to tackle, then by all means give it a go. There really are affiliates making millions of dollars doing this, so the carrot is a big juicy one. Finding a viable product that fills a definite (preferably urgent) need is critical, executing your marketing plan and following through is essential, good judgement and nerves of steel don't hurt.

If you want to learn the basics of Internet Marketing, I highly recommend you sign up for a free course called the 30 Day Challenge. By all means check it out, you need the right knowledge to be successful on the Internet - the 30 Day Challenge is an excellent place to start your journey. Also be sure to check out the rest of the articles on SBOguide.com.

Good luck!