Earning extra income from your site

There are several types of affiliate programs.

Let's take a closer look at each of them.

1. PAY PER SALE (commission based)
You get paid a commission for each sale you generate. If you refer a visitor to the merchant's site and the visitor makes a purchase, you get a percentage of the sale as a commission. Some programs offer a sliding scale for the amount of commission to reward affiliate sites with high traffic, while other programs stick to a flat commission rate for any level of sales. Depending on the merchant, the commission may be for that purchase only, for all purchases that customer makes within a fixed period of time (usually six months to one year), or for all the purchases that customer makes in his or her lifetime.

Advantages to you
You get paid for every sale that is generated through a referrer from your web site. If the affiliate program matches the content of your site, you are likely to get good results from a commission based pay-per-sale system.

Disadvantages to you
This kind of program usually has a low click-thru to conversion rate. This means most likely only a small percentage of your visitors will click on the banner or link advising them to buy. Of that percentage, an even smaller percentage will actually buy something. You may find that there have been thousands of visits to your site and yet no sales. The more you can focus your affiliate program and integrate it into your site, the better your chances for making real money will be.

Advantages to merchant
The merchant basically gets a free shopping front and with many sites like yours, they can reach a widespread audience.

Disadvantages to merchant
He will be paying your commissions out of his own gross margin.

2. BOUNTY (flat fee referral)
You get a one-time bounty payment for the customer you referred. You will not get commission on any future purchases that customer makes. Usually, companies pay a bounty of $10-$20 per customer.

Advantages to you
You get paid for every visitor you send to the target site that buys something.

Disadvantages to you
Your web site needs to have new visitors all the time. You only get paid for the referral once, even if the referred client keeps ordering from the merchant or purchases a service yearly.

Advantages to merchant
You place their banner(s) on your site for FREE, so they don't pay for the advertising. It's the cheapest advertising a merchant can get. 5.000 page views could cost up to $100, now only $10-$20. A customer could be buying from merchant for years, you only get the fee once.

Disadvantages to merchant
None. He receives free advertising and the cost for each new-found customer is once and very little.

3. PAY PER CLICK
You get paid for every visitor you send to the online merchant through a banner or text link, regardless of whether or not a sale is made. Usually, companies pay $0.05 - $0.10 per click per visitor.

Advantages to you
You get paid for every visitor you send to the target site, not only for the smaller number of visitors who actually buy something there.

Disadvantages to you
In most cases you will end up making little money (site with average page views will display f.e. 5000 banner impressions, of which 20 visitors click thru, resulting in a whole $2 income. Wow!

Advantages to merchant
You place their banner(s) on your site for FREE (that's right, they don't pay for the advertising) and you get very little in return. It's the cheapest advertising a merchant can get. 5.000 page views could cost up to $100, now only $2. The more page views you have, the cheaper it gets for the merchant.

Disadvantages to merchant
None. He receives almost free advertising.

4. TWO-TIER PROGRAMS
You get commission on direct sales that you generate, plus you get commission on sales generated by affiliates that you recruit. Companies typically pay 15% commission for direct sales and 5% for sales generated by the affiliates you recruit. Same (dis)advantages apply as for the pay-per-sale programs.

5. PAY PER LEAD
You get paid a one-time fee for generating a lead for the merchant. Similar to a bounty program, you usually earn $2-$5 if the visitor you referred fills out a questionnaire or an application. Same (dis)advantages apply as for the Bounty programs.

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