Chapter 4: Basic Understanding of Affiliate Marketing

Marketing Guru Kotler said there are 4 Ps in marketing, Product, Price, Place and Promotion. In today’s marketing we add Packaging to that. These are the key things when it comes marketing or selling. So, first we need to identify them, among the 5 Ps ‘People’ is the key factor.

You can have an exceptional product, but you cannot sell them to the people in Somalia. They don’t need it. And you might not have the right product to sell to people in Finland who have high disposable income to buy.

In real time marketing you will be restricted in selecting the people whom you are going to sell and the products (or service) you are going to sell.

Assume that you want to start a business selling shoes in the place where you live. The opportunity here is very limited; you can target only the people who live in your locality, and you can sell only shoes that are in vogue among the local audience.

The constraints here are

1) You cannot manually meet 1000 clients a day

2) Your target audience is very limited

3) The number of products you have is very limited

4) You cannot get great margins as you are just a start up

5) You will not have the correct work force to get your things done.

6) Setting up a good infrastructure and capital

What if I tell you that you can reach, unlimited number of clients a day, and the whole world is your target audience, you have literally endless number of products/service to sell, and instead of you going after clients, the clients will look out for your products and above all you don’t need a single person to assist you in setting up your business.

This is what affiliate marketing is all about.

Now let me ask you a question which is the most powerful company in the world today?

The most powerful company in the whole world is Google

Google is doing just what I have told you people search around billions of things every day in Google. For example search “Dell Laptops”. Before the search results, you will get to see related ads before the actual search results. Someone is actually promoting his product here. Now is google going after people to sell products? No. It is the potential customers who are coming after the products that google/advertiser is promoting.

The audience wants to know about something, and you don’t do a thing. You just pay google something and google is giving you a sale.

You can select the product you like from a common market place, you can sell it to any part in the world. You don’t need to own the product, all you are going to do is a simple financial transaction and your vendor will take care of the rest.

This is the base of affiliate marketing. You can reach any one. You can pick a product/service that applies to Ireland and promote the product just in Ireland

The advantage of online sales is that, you cut down on all the other middle men, transportation, logistics and man power, which ensures that as an affiliate you earn a bigger commission from the vendor.

It is a win-win-win situation for everyone involved, the vendor is happy, because someone else is selling his product, you as an affiliate will be happy as you don’t need to have a product/service of your own to start a business of your own and above all you can sit in India and sell a product in Alabama and finally the client is happy, as you are making it easy for him to purchase.

Now, Key to success in affiliate marketing is,[ad#internal-234]

1) Selecting the right niche

2) Selecting the right online marketing channels

3) Optimizing expenses

clickbank.com was established as a company in 98, and clickbank within a decade crossed one billion dollar in sales

When it comes to niches, the important thing is to have an open mind. If I ask you to conceptualize a new product that you want to sell online will you ever come out with bird cages as a first option?

Two months back an affiliate sitting in Chile, created million dollar sales in the US just by selling bird cages which someone else produced

He was successful, because he found a niche, which had demand, but less competition he had very few competitors online so he was able to achieve that, he marketed through google, yahoo and bing and geo targeted his ads.

The vendor will directly supply the cages to the clients and he got his commissions which crossed a million

Just assume that you spend 100 dollars in marketing and you make 120 dollars a day all through google. Now the main difference between regular marketing and online marketing is the scope for up-scaling is limited in regular marketing

If you run a grocery store and if your advertising expense is 2000 dollar a month you cannot double your sales by spending 4000 dollars a month, whereas in online marketing you can do that. If your advertisement is viewed by 1000 people and you make 2 sales out of it, that rate always remains the same, so if you double your advertising expense and plan your ads well you can double your income.

Location as a constraint is no more valid for marketing; all you need is web traffic. So once you select your niche, set up your site and pull in web traffic, the job is done. First set up a Basic Website with a Domain Name

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