What is an Affiliate Program?

An affiliate program is sales based system which allows you to earn money by promoting other people's products. As an affiliate, each time a promotion you've done generates a sale of a product you'll earn a specific amount of money in sales commissions.

Affiliate programs are very much like commission based sales job, with the primary difference being that you're not limited with the products you choose to promote, or the companies you choose to promote for. You also have no weekly sales quotas which must be met in order to be allowed to continue trying to earn money from a given product or company.

In most cases, affiliate programs pay a percentage of the sales amount as your commission. The percentage amounts you earn will vary from one type of product to another, and from one company to another as well.

Most affiliate programs are based on selling either digital or tangible products, but there are plenty which allow you to earn money by promoting a service as well.

Digital products which can be downloaded to a buyers computer after they've purchased it tend to pay the highest sales commissions to affiliates, because the companies who sell those products have less overhead expenses to cover. It's not unusual to find digital products which offer %50 of the sales price in affiliate commissions.

Not all digital products pay commission levels that high, and of course how high the commission level is needs to be balanced with the retail price of the product you choose to promote. A product which sells for $20 and offers %50 in affiliate commissions will only earn the affiliate $10 each time a sale is made.

Tangible products which must be shipped to the customer pay lower percentages in affiliate sales commissions, however these can often be much more expensive products too. So affiliates might earn 10% commissions on treadmill sales, but if the treadmill costs $1000 the affiliate earns $100.

Digital products are usually limited to electronic books and downloadable software. Tangible products are almost limitless in choice, because you can usually make money as an affiliate promoting anything you can think of.

Some example of tangible products you can earn money from include physical books and software, furniture and home decorating accents, home improvement supplies and tools, hobby supplies and tools, jewelry, gift baskets, shoes, clothing, electronic gadgets and accessories, batteries, cables and cords, car parts, pet supplies, vitamins and supplements, and even food.

Affiliate programs sometimes exist for service based businesses too though, and these can be quite lucrative. As an affiliate for a service based business, you make money when you successfully get a prospect to sign up for a specific service. These services can vary greatly. Common ones include a monthly professional membership service, and website hosting services.

Many affiliates enjoy promoting service based affiliate programs because they can continue earning money for months or years into the future. This ongoing income is often referred to as residual, or recurring income.

Another type of affiliate program which is becoming more popular is known as a CPA, or Cost Per Action program. With this type of affiliate program, instead of getting paid when people pull out their credit cards and pay for a product or service, you simply need to convince them to take a specific action instead. These actions vary but common ones include having the prospect request a free trial or sample of a product, or having them fill out an information request form.

With CPA affiliate offers, each time the desired action happens the affiliate earns a specific amount of money. Since there are no sales being made, there is not a percentage amount which is paid in commission. This flat fee per action is also referred to as a Pay Per Lead affiliate program.

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