Tuesday, April 05, 2005

How well do you know your Affiliate merchants

As a beginning affiliate you may be in the phase where you are applying to as many affiliate programs as you can. And if you get accepted, all the better. Right?

Well you may want to ask a few questions about the merchants that you decide to affiliate yourself with. The best place to get answers is to read the "Affiliate Agreement" or "Terms and Conditions", this is the name given to the legal document that you sign when joining an affiliate program.

During this discussion I will be using the term merchant, to refer to the organizations that you promote on your site and that you sign up for as an affiliate. Much of what is said could also apply to affiliate networks as well. But because merchants that have a program on the same affiliate network will often have different programs, I use the term merchant most often.

Here are a few questions you may want to ask to get to know your merchants better.

1. Do they use malware and what is the role of cookies?

While the use of malware by affiliate merchants is a practice that seems to be going away, it is still a good idea to understand if a merchant is using it. There have been merchants who used malware to manipulate the earnings of their affiliates and publishers.

You want to know if this is a problem before you spend time creating content and putting up links to a merchant that is using malware.

Next comes the role of cookies. Cookies are small files that contain information that allows the merchant to track the performance of affiliates. They allow the merchant to know which affiliates sent them which customers. One characteristic that cookies have is how long they are active. It is a good idea to know how long cookies stay active, the longer the better. The reason that this important is because your income over an extended period of time may be effected if the cookie expires and gets overwritten by a new one.

While there is not much that the average affiliate can do about deleted cookies it is best to understand how they work and what affects they can have on your earnings. This will also help you decide if you want to work with a merchant or not.

2. How does the merchant calculate your earnings?

This is a complex question, because there are many factors that go into determining how earnings are calculated.

First is how earnings are generated, do you earn for sells, commissions, leads or what. This will help you determine what kind of content to build. Because the content for selling is different from the content needed to generate leads.

Next is what percentage of revenue generated will be used to calculate earnings. This again varies from program to program and from ad to ad within a program.

Some of the programs have tiered percentage levels. The more revenue you generate for the merchant, the higher percentage that you are given in earnings. As an example if you are the affiliate for a book selling site, and you are given 5% for the first twenty books that are sold via your site, and 5.25% for all books after the first twenty. And the percentages may keep climbing depending on the number of tiers that the program has. You could find programs that give you an extra 0.25 % of earnings for each tier.

3. Is there a commission threshold and what is it.

As stated above merchants pay affiliates a percentage of the revenue that is generated by them. These payments are called commissions. The commission threshold is the minimum amount that you have to earn to receive payment for that pay period.

For example an affiliate program that has a $100.00 commission threshold may stipulate that you must earn at least $100.00 in order to get paid. Earn only $90.00 and you do not get paid.

Along the lines of the threshold is rather or not the merchants allows roll overs (carry overs). Roll overs are when you do not reach the commission threshold and the money that you made during the last reporting period (often by quarters or months) will be kept and added to your next pay periods commissions. Most programs do this, but you want to know for sure.

4. What kind of products do they carry.

While this may seem like a "no brainer", you really should go to each merchant site through the front door as a customer and give all the merchandise for each merchant a thorough examination. There are several reasons for this, (1) the better you know the products the better you will be able to generate content for them. (2) You may be surprised to find that your merchant sells some items that you did not know that they sold. For example, if your merchant sells books, do they sell audiobooks, do they sell CDs, do they sell VHS tapes and other medium. Some merchants may are many not do a good job of letting everyone know what they sell. Some of the value that affiliates add is being salespeople for the complete line of the merchant.

5. What has been their track record over the last year, last five years?

One thing that you want to know is how long has the merchant been around and what is their track record. You would be surprised by some of the many changes that have occurred in the past with almost every program. And it also helps to know if you are working with a merchant that knows how to do this or if they are just starting out.

6. Are they part of an Affiliate Network?

Is your merchant a part of an affiliate network, or do they have a stand alone program? If they are part of a network, does the network have features?

If so what are they and how can you use them to your advantage. Some of the resources that networks provide are html links for your site, answer questions, provide a forum where other affiliates for that program get together and discuss the program. I can not tell you how valuable this is.

You can learn a lot just by interacting with other affiliates on forums.

Final words and main points;

Most affiliate merchants have good solid well ran programs. The offer realistic terms, fair conditions and the give some level of support. But there are also the not so good merchants out there that make it difficult to be a good affiliate. Some merchants do not understand the value of affiliates.

This all means that as an affiliate you have to keep your guard up and make sure that you only affiliate yourself with programs that fit into the goals that you have set for yourself. As a minimum, become aware of the many options that you will find in Affiliate Agreements. Understand what these options mean to you and how they can effect your earnings. Beware of pitfalls that make some merchants not as attractive as others.

As is often the case knowledge before hand is better than learning once there are problems.

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