So what is conversion rate in the affiliate world?
Conversion rate is in other words your sales rate. How many visitors you managed to Convert to buyers?. As many visitors are converting to buyers in your website, the higher conversion rate you will have. So what is considered to be a good conversion rate? In the affiliate world the average of the conversion rate is 1%. That means that most of the web sites converting one visitor out of hundred, into one sale. This fact is very important to affiliates when they want to calculate the profitability of an affiliate product.
For example: if you are trying to sell a weight loss product online, and let’s say you will get $40 every time you make a sale.(commission = $40) Now, you actually have no idea what is the conversion rate of this site, but let’s assume it looks very good. So you estimate that the conversion rate of this site is at least 1% if not more. (honestly if a site has a conversion rate, which is lower than 1%, don’t even bother with it). That means that for every 100 people you will refer to your site with your affiliate code, you will get $40.
That’s great! But how much it will
cost you to refer 100 people?.
Well you do not know yet! What you know is that if you were to pay $0.40 every time you refer a visit to your weight loss website, you will break even!. Because: 100(visits) x $0.40 = $40. And $40 my friend is exactly the commission you will get for every sale. You see the beauty of this? so now you know that your break even Cost Per Click is $0.40. if you will be able to get 100 people to this site with a lower CPC you will make a profit.
So what you should do now is go to Google Adwords, and start a new campaign. It does not have to be fancy or complicated. Make it simple with two different text ads, make the settings to target people from US , Canada and UK, make sure you make ad groups to the keywords you have picked and so on. But the golden piece of info that you need to implement is not paying Google more than $0.40 cents.
If you start out it is ok to spend a little more than that, just to see that the product has at least 1% conversions, but always remember that in order to profit from this campaign , you will have to find the key words that cost you less than $0.40 cents a click.
Notes: if you have no idea how to start an adwords campaing or want a little more tips, I promise I will write more about it.
FYI: There are 2 main ways driving traffic to a site. 1st called CPC – Cost Per Click,(Such as : adwords, Yahoo and msn also have PCP advertising). 2nd called SEO – Search Engine Optimization. The big advantage of SEO is once you get the traffic you don’t have to pay for it!, however doing SEO takes a little bit of skills and takes time, unlike paid advertising. I will write more about CPC and SEO in my other posts , but for now , take it easy
Thursday, April 22, 2010
Sunday, April 11, 2010
Affiliate Marketing
What is affiliate marketing?
To answer this question we need to understand first what is an affiliate? Affiliate is someone (could be anyone with a computer and internet access) that helps the product owner increase sales. For every sale that the affiliate made, he gets a commission! It is very similar to a salesman that works for a big company that gets commissions for his sales. So basically the affiliates model is not new, it exist in the business world for a long time.
How high is the commission?
Well it depends. Usually when the price of the product is higher than the commission is higher, but commission can be affected by the management expenses. If the costs are high, the commission will be low. That is why the commissions on electronic products like eBooks, soft wares and tutorials are higher. The flowing expenses on these kind of products are very low. The owner have to spend money on hosting them and that’s is. These kind of products can be downloaded from anywhere in the world. Commissions on electronic products can get as high as 75%. So if a software cots $100 , then you can make $75 for every sale that you make.
Sounds nice but how can I join to one of these affiliates programs?
Well you have a few options. First, if you have something that you know about or just prefer to sale, go to google and type ‘keyword’ affiliates programs in the search. (keyword = the product that you want to sale). If you have no idea where to start I recommend you start in 2 places number one is a website called clickbank.com. And the other is cj.com (AKA commission junction). The difference between the two is that clickbank.com sales electronic products (video tutorials, ebooks, softwares, etc.) while CJ sales real products (guitars, toys, shoes, etc.) and electronic products. But for electronic products it is recommended you go to clickbank.com.
So once you find something that you want to try to sale, you fill up a form, in clickbank.com and CJ.com you sing up to the website once, and you get your nickname and everything. You don’t need to supply any bank account details if you dint want to, billing address is enough. So after you joined to one of these websites and filled out a form with you name, last name , email address etc, and billing address you are ready to start. You can choose how you want to be paid, if by PayPal , sent checks once every 2 weeks or wire transfers. Location is not a problem, these sites works with people all around the world. So you can sit in Asia, and get commissions from products you sell to people in America by mailed checks.
How would the affiliate sites will know that the sales that im making are really mine or not someone else’s?
you see, these sites generate a unique code once you apply. This code is you individual code. Affiliate sites like clickbank.com attaché this code to a link that you get from them. This is your affiliate link. As an affiliate, you need to send people through your affiliate link if you want to get paid. So for example if a visitor comes to your website and read about the product that you are recommending, but when he wants to get to the products website and he types the address in his browser, for example, and not going through your link, you will not get paid!
You need to make sure that visitors click on your affiliate link , in order for you to get paid. Now watch this, your visitors do not have to know that the link that takes them to the product site, is your affiliate link. It is best if they do not know about it at all. Some people do not like the fact that someone is getting paid, just because he made them buy something.
To answer this question we need to understand first what is an affiliate? Affiliate is someone (could be anyone with a computer and internet access) that helps the product owner increase sales. For every sale that the affiliate made, he gets a commission! It is very similar to a salesman that works for a big company that gets commissions for his sales. So basically the affiliates model is not new, it exist in the business world for a long time.
How high is the commission?
Well it depends. Usually when the price of the product is higher than the commission is higher, but commission can be affected by the management expenses. If the costs are high, the commission will be low. That is why the commissions on electronic products like eBooks, soft wares and tutorials are higher. The flowing expenses on these kind of products are very low. The owner have to spend money on hosting them and that’s is. These kind of products can be downloaded from anywhere in the world. Commissions on electronic products can get as high as 75%. So if a software cots $100 , then you can make $75 for every sale that you make.
Sounds nice but how can I join to one of these affiliates programs?
Well you have a few options. First, if you have something that you know about or just prefer to sale, go to google and type ‘keyword’ affiliates programs in the search. (keyword = the product that you want to sale). If you have no idea where to start I recommend you start in 2 places number one is a website called clickbank.com. And the other is cj.com (AKA commission junction). The difference between the two is that clickbank.com sales electronic products (video tutorials, ebooks, softwares, etc.) while CJ sales real products (guitars, toys, shoes, etc.) and electronic products. But for electronic products it is recommended you go to clickbank.com.
So once you find something that you want to try to sale, you fill up a form, in clickbank.com and CJ.com you sing up to the website once, and you get your nickname and everything. You don’t need to supply any bank account details if you dint want to, billing address is enough. So after you joined to one of these websites and filled out a form with you name, last name , email address etc, and billing address you are ready to start. You can choose how you want to be paid, if by PayPal , sent checks once every 2 weeks or wire transfers. Location is not a problem, these sites works with people all around the world. So you can sit in Asia, and get commissions from products you sell to people in America by mailed checks.
How would the affiliate sites will know that the sales that im making are really mine or not someone else’s?
you see, these sites generate a unique code once you apply. This code is you individual code. Affiliate sites like clickbank.com attaché this code to a link that you get from them. This is your affiliate link. As an affiliate, you need to send people through your affiliate link if you want to get paid. So for example if a visitor comes to your website and read about the product that you are recommending, but when he wants to get to the products website and he types the address in his browser, for example, and not going through your link, you will not get paid!
You need to make sure that visitors click on your affiliate link , in order for you to get paid. Now watch this, your visitors do not have to know that the link that takes them to the product site, is your affiliate link. It is best if they do not know about it at all. Some people do not like the fact that someone is getting paid, just because he made them buy something.
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