I am constantly asked... "I am selling a product, should I develop an Associate Program for it?"

The answer: Absolutely! With the exception of a few products, almost every product or service online will be MUCH more successful if you offer an Associate Program for it.

That is a pretty bold statement, isn't it? I'm probably a tad prejudice here because we generate over a million dollars every year just from our Associate Programs!

However, the plain fact of the matter is that I have never seen a business, which invested in an Associate Program, that did not make money with it! Yes, read that again, I was not exaggerating… I said that every business I have seen introduce an Associate Program has made more sales, and generated more money!

In my opinion, developing an Associate Program for your own product or service is one of the most powerful ways there is to market online today!

Just to recap from last month's newsletter, basically an Associate Program is a "reseller program".

You are allowing other people to resell your product at their website, through their newsletter, to their customer base, or any ethical way they want to market it on the Internet (you get to set the rules on the ways your resellers are allowed to sell or represent your product).

Associate Programs have made a "level" playing field between the big corporations and the small companies like you and I. Using Associate Programs makes it ridiculously easy to harness the power of other websites and all of their traffic... and it is possible to set up an Associate Program for your own product or service without mortgaging your house!

Yes, you can do it... but it takes an investment of time and a small investment of money to do it right! And you have to do it right the first time! I'll talk all about how to get set up and how to run a successful Associate Program in several of the articles to follow.

But first let's get to the heart of things.

So, why can an Associate Program make you so much money?

If you have read my course, "The Insider Secrets to Marketing Your Business on the Internet" (if you haven't click here now to check it out), you know how I love joint ventures and how they can be your easiest path to success in any business (they have been mine, so I am living proof). Basically, an Associate Program is the ultimate "electronic" joint venture!

Just in case there a few of you who don't understand, let's go through an example.

Let's say you have a protein powder (that you mix in with your drinks) which reduces cholesterol and also improves a person's health and vitality. It's a great product and your customers love it! Now, if you can team up with someone else who has an email list of past customers who are interested in improving their cholesterol, and interested in health and eating properly... you would make a boatload of money (the perfect joint venture)! So much that you would be willing to give them a healthy portion of the profits from all the sales generated from their list (called a "referral fee"). You sell YOUR product to THEIR list of customers and you both profit. You use Your product and his list.

It doesn't end there. What about websites, which are health and nutrition oriented. What if you got them to post a banner at their site about your product, or even got them to endorse it to their visitors because they liked the product so much. Many of their visitors would see the recommendation and visit your site… you sell them the product, then give the website which sent the visitor to me a "referral fee" for the business.

Do you see the power in that?

You don't have to go out and spend money on advertising... there is NO COST in doing this joint venture. You only pay them per sale. So if you don't make any sales you don't pay them a dime… but if you make a thousand sales, you give them a lot of money. They are motivated to make it work and you are motivated to make it work… as the more you sell, the more money you both make.

This is an Associate Program in a nutshell. The person who is promoting your products to his customer or at their website is the "associate" and you are the Associate Program owner.

In traditional marketing, joint ventures of this nature were complicated and time consuming and it was difficult to track every order. But with electronic marketing, software can track EVERY customer sent from someone's website, from someone's newsletter, from someone's promotions, from someone's personal email to his customer database, or from any associate … to determine who gets credit for the sale.

Basically, an associate is an independent representative of your company. They try to sell your product and they take a "referral" fee for all the products sold. They just send people to your site (using a variety of methods discussed later). You track those visitors and sales, and give them a "referral" fee for all sales generated from those visitors.

Isn't that beautiful? I love the Internet!

And it gets even better. By using the technology of the Internet, it is virtually the same amount of work to track "1" associate as it is to track "10000" associates...

Can you imagine having hundreds or even thousands of people out there, selling your product or service for you?

Can you imagine how many sales that would generate for you?

I think you get the picture. Are you excited yet?

So how do you get hundreds or even thousands of "associates" (otherwise known as "resellers") to join your program?

Sometimes people will "ask" to be a reseller for your product/service (usually customers who have bought your product, are quite happy with it, and want to represent it), or you can actively seek resellers (associates) who would be perfect for your products/services.

The only way to be successful with Associate Programs is to do #2 (search for resellers who have the perfect exposure to your target clientele in order to sell your product or service).

Let me give you an example. If you were selling gardening equipment, your perfect associates would be people who own gardening related sites or newsletters, or those who own other related businesses with a large database, selling products/services which are complementary (but not competitive) to yours.

These are the people who would be your perfect "joint venture" partners, therefore your perfect "associates".

When you set up an Associate Program you are deliberately going out and finding joint venture partners! Your associates put a banner or text link to you on their sites... and they will send their customers and/or visitors to your site.

In order to do this you must have an accurate and reliable way of keeping track of your associates and the visitors they bring to your site (and which visitors come from which associate so you know who to credit when there are sales). This is where Associate Program software comes into the picture (more about that in one of the following articles).

Okay, the beauty of all this is that you benefit from the traffic of OTHER sites… and your associates benefit too by getting a cut of the profit. It is a win-win situation for both of you. It costs them nothing to join your Associate Program and resell your goods, and you don't pay them a dime until they generate a sale… it just doesn't get any better than that in marketing.

The power behind Associate Programs is that "there is nothing to lose" (other than a few hours of your time).

For example, the associate joins your Associate Program for free. They invest 30-60 minutes to post the banner or links to your site from theirs (or emails their customer base or newsletter base about your product/service)… and if it doesn't produce as many sales as they expected, they simply remove the banners or links.

What did they lose?

An hour of their time, at the most! That is not much of a risk considering there was a potential to make thousands of dollars over a few hours of work.

What is the verdict? It is and offer them next to impossible to lose money by offering your products through an Associate Program if you have the right associates.

Just in case you didn't get it yet, let me put it in plain English:

With an online Associate Program you can have hundreds and even thousands of websites online selling your product or service. In turn, they receive a commission for every sale generated by their links.

This is a fantastic deal for you, as you are not paying a dime for advertising! You only pay for results.

Think about it. How can you lose money? If you are not paying a dime until a sale is produced, you can do nothing but make money!

It is a very low risk method of advertising. You are always going to make money!

Let's say that you are selling a product for $100 and you offer a $20 referral fee per sale. If an associate has your banner up for an entire year before he makes a sale, you don't pay them a cent until that sale is produced… there is no way you can lose! It doesn't matter what kind of traffic your associate's site has... whether the site gets 10 visitors a day or 10,000 visitors a day...

you are paying on a per result basis... and you will make money every single time!

That's the power of Associate Programs. If you have the right contacts... it is basically a "no risk" form of advertising. You are only paying your advertising dollars (in this case a referral fee or commission) for sales which are made. You always make money!

In the past, this kind of advertising was laughed at. If you phoned up the New York Times and asked them to publish a full page ad and then told them that you would pay them only a percentage of the sales that were made from that ad... they'd laugh at you! They charge $25,000+ for an ad.

If you advertised on TV during the Super Bowl you'd be paying a million dollars for airing a 30-second commercial. But instead, say you approached them and asked them to place the ad for free and you would pay them a percentage of the sales that were generated... they'd laugh at you as well!

On the Internet this type of joint venture deal is commonly accepted! In fact, it is taking the Internet by storm. The technology of the Internet has made this type of arrangement very easy to do and quite profitable for both parties involved (the associate and the owner of the Associate Program).

I should mention that Associate/Affiliate/Reseller Programs are becoming more and more popular... even with the big sites using extensive prepaid banner advertising, which would have never considered this type of advertising. They are accepting some associate/affiliate arrangement to increase their profits and eat up their available banner space. The reason they are turning to these methods of revenue is that a lot of people are getting sick and tired of paying for banner advertising which doesn't produce sales. Advertisers want results and many are not getting them!

Side note: As you know, banner "cost per impressions" have been drastically dropping all over the Internet. We talk about how to buy banner space for as low as $5 CPM and to never pay more than $17 CPM, in my private newsletter called "The Cutting Edge" which comes free of charge with my Internet Marketing Course (check it out you will be glad you did). If you are a Cutting Edge subscriber, please read those details in the March issue if you have not yet done so.

Now, I should also mention that another reason why Affiliate Programs are becoming popular is because the marketing is done not just though banner ads but through a variety of other methods! Associate Programs are marketed though graphic links, text links, autoresponders, ezines, letters of referral, etc. This is advantageous for the following reasons.

There are software programs that can actually filter out and basically eliminate banner ads... so visitors who use this software don't even see them! So if you were only using banner ads to advertise your products or services... some prospects would never even see your offer.

However if an associate recommends your services through a text link or writes an endorsement letter... this can't be filtered out... it exposes a prospective customer to your service or product in spite of the fact that they filter out banner ads!

And it's not just the filtering software... there are lots of people out there who are "immune" to banner ads! They don't need filtering software... they simply ignore all banner ads. In other words they automatically filter out the ads before it hits their eyeballs! So one of the BIG advantages of Associate Programs is that the information gets to prospective customers in a variety of ways, circumventing human and software filters.

You aren't relying on one method of advertising... and you only pay for results!

In closing, let me state one rule. With only a few exceptions, the only products or services which will not do well in an Associate Program are those that do not have a high margin to work with. If you are only making 10% profit on an item or service it is very difficult to give an associate a large piece of the selling price as "motivation" or incentive to sell your product or service.

So, as long as you have a product to sell and as long as you have some kind of margin to work with so that you can offer a reasonable referral fee, you'll make money with an Associate Program.

If you have a low markup (unless your product is really unique and it is going to sell like hot cakes), it is going to be difficult to generate a lot of sales from your associates as there is not much incentive to motivate them. A commission of only 5% of the sale is a very low incentive and you will not get many associates out there marketing your wares with those small referral fees.

However, some good news for those who have low margins in your product; there is one reason why you might still consider setting up an Associate Program... read the article "Our SECRET Weapon... a Unique and Creative way of using Associate Programs" to find out why!

Generally speaking, with a good product or good service and a reasonable margin... I cannot think of a company that should not have an Associate Program!

ABOUT THE AUTHOR: Derek Gehl specializes in teaching real people how to start profitable Internet businesses that make $100,000 to $2.5 Million (or more) per year. To get instant access to all his most profitable marketing campaigns, strategies, tools, and resources that he's used to grow $25 into over $60 Million in online sales, visit: http://www.marketingtips.com/t.cgi/892189

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