What is affiliate marketing and is it right for you? In its basic form, internet affiliate marketing is one site advertising another site's goods or services for sale. When someone follows the link and buys the item, the selling site gives the refering site a comission. One of the most successful sites doing this is Amazon.com. Consider our friend Steve's page selling ipod speakers. About a quarter way down the page, you'll see a box that says 'purchase from Amazon'. You click the button and it takes you to Amazon and puts the ipod speaker in your shopping basket. If you complete the purchase, Amazon gives Steve part of the purchase price.

There are pros and cons of being an affiliate an offering your wares through affiliates...

For those interested in being affiliates, the pros are that you don't have to stock merchandise, ship it or deal with customers. On the down side, you don't get the customers names for followup, and the comissions tend to be low: in the 6-15% range for Amazon, for instance.

For those of you interested in selling things through affiliates: the pros are more exposure of your products through potentially high-quality related sites. You also get to set the bar on how agressive your affiliates are: the more commission you pay, the more affiliates you'll get signing up and the more heavily they'll market your offerings. On the downside is the initial setup of the affiliate program and the ongoing work of paying your affiliates and maintaing a good relationship with them.

There are a number of third-party brokers one can use to manage affiliate programs, such as Comission Junction or ClickBank. The problems with them are that they also take a cut of the transaction and are either expensive or difficult to set up.

For those of our clients using Virtuemart, there is an extension that allows you to run your own affiliate program. If you'd like to learn more, please contact us and we'll help you decide if becoming an affiliate or offering your products through affiliates is viable for you.