by Sunil Tanna

We've all the heard the stories that 90% or more of Internet businesses don't make any money (usually this a prelude to trying to sell you a marketing course or book). But the fact is that if you include everybody who takes part in affiliate and associate programs, the figure is even higher, perhaps even as high as 99%.

While you may get rich (although some have) by simply using free affiliate & associate programs - it's certainly true that most people can make a decent second income just by making sure they avoid a few of the most common mistakes.

1. Joining the wrong program(s)

This is the most common mistake - and the easiest to correct.

(i) Joining "scam" programs

Unfortunately there are some companies on the Internet who simply don't pay their affiliates. Avoid these by doing a bit of basic research, sticking with major companies, or simply sticking to personally recommended affiliates programs.

Be cautious of any program which isn't paying now (even if it makes great promises for what it'll pay tomorrow), any program which charges a membership fee, any program which promises unbelievable rewards, or programs from companies with very poorly constructed web sites.

(ii) Pay-per-click

There are lots of programs, which pay you for each person who clicks on a banner. Lots of webmasters join these thinking that it's easier to get somebody to click on a banner than to sell them something. This may be true, but generally it's very hard to make substantial amounts of money with pay-per-click.

Here's why - typically you earn $0.10 per click (or less) - typically about 1% of people click on a banner.

So if 10,000 people visit your page you've most likely made 1,000 X 1% X $0.10 = $10

Now ask yourself - if you've got 10,000 potential customers visiting your web site - don't you think you ought to have made more than $10?

Now compare if you use a pay-per-sale or pay-per-lead program.

Example: your site is about cars - and you link to both books about cars ( Amazon.com) and Software (Beyond.com) about cars. You personally recommend both items.

For the sake of the example, let's say you earn $3 per book sale, and $2 per software sale - and overall only 0.1% of people buy one of the two.

Your earnings = (10,000 X $3 X 0.1%) + (10,000 X $2 X 0.1%)
= $30 + $20 = $50

(And don't forget there's nothing to stop you using pay-per-click too on the same page).

(iii) Poor targeting

Join affiliate programs which fit in with the rest of your site for best results (if necessary find the affiliate programs first, and then decide what your site is going to be about).

Don't just join a program because it offers good commissions. If your site is about "Car Maintenance" - then don't expect to make many sales of web hosting or air tickets.

If your topic is so obscure you can't find a good exactly matching affiliate program - don't forget Commission Junction have 70 merchants, Web Sponsors have 110, Clicktrade have thousands, and Amazon and Beyond have huge catalogs - and you might find something related there.

Additionally if you still can't find a good exactly matching sponsor try something of general interest (like Web Sponsors's programs in the $0.25-$1 range).

And lastly if you decide to make a web site purely for the purpose of generating affiliate sales - I'd recommend you try and be original.

It's comparatively easy to grab a top 10 search engine on a specialist/semi-obscure topic (and then get 20% of the world internet market)

Whereas it's next to impossible to get anywhere, if you enter the fray with thousands of sites that are working on the fiercely competitive areas of "Internet Marketing", "Web Hosting", "Free Stuff", "Affiliate Programs", etc.

2. The Two Tier fallacy

Apart from pay-per-click, one of the most popular types of affiliate programs on the Internet are two tier. This is where you can recruit new people and earn a percentage of their commissions.

Most people, who join these, join hoping to recruit hundreds of sub-affiliates, and earn a small slice of each one's sales.

This approach doesn't work for two very simple reasons: -

(i) Most other sites that join follow the same approach - they simply sign-up other people too - and never make any sales themselves.

(ii) Most other sites are no good: the simple fact is most web sites have little or no traffic, and aren't as motivated as you are to earn commission. Therefore don't expect many of your sub-affiliates to make sales.

The best approach with two-tier programs is to work on promoting the product or service - and view any referral commissions as a bonus.

I am speaking for personal experience here, have recruited hundreds of sub-affiliates to various programs: Over 90% of my referrals make absolutely no money.

3. Only using banners

Banner click through rates on the Internet are falling all the time (about 1% is average now).

Which do you think people are more likely to act on: -

(i) A banner for a product/service with no relationship to your site's contents

Or

(ii) Text links to related products and services (Amazon, Beyond, Web sponsors all have lots to chose from) complete with your review and/or personal recommendation.

4. Running Branding Adverts

When you join many affiliate/associate programs, you're required to identify yourself as an affiliate by putting a button or link on your site (typically on your home page or "About Us" page).

If that is the rule of a particular program - then do it - but do not expect much money if that's all you do.

Which do you think is more likely to work?

(i) Putting a button link to a book store on your cars web site - and hoping somebody who came to your cars site - will suddenly feel like book-shopping, click through and buy a book in the same browser session.

Or

(ii) Including reviews of a few of your favourite cars books on your cars site - and linking each to the appropriate Amazon page?

5. Not tracking your stats

If you want to be successful at this game, you need to track everything (I keep my stats in a big spreadsheet).

Apart from track the number of hits to your site and commissions, you should track each of these: -

(i) Track search engines hits to your site. Do you have additionally opportunities to promote related products? Do you need to do more promotion?_

(ii) Track performance of different affiliate links.

Experiment by changing the text on your site, or the order of presentation. Things do not always work out how you expect - but unless you track your stats you'll never know.

For example I have a page with 3 similar offers: -

(a) I get paid $3 per lead - lots of leads, as this is the best offer for most people
(b) I get paid $5 per lead - fewer leads as not as good an offer as (a)
(c) I get paid $10 per lead - very few leads as only applicable for some people.

So I did a test
Week #1 - Display offer (a) only
Week #2 - Display offers (a) & (c)
Week #3 - Display offers (a), (b) & (c)
Week #4 - Display offers (b), (a) & (c) - I made a worse offer more prominent.

Guess which week worked best? Actually it was week #4 by far. I have thought up various explanations, but I can't explain for sure. Perhaps people felt that offer (a) was even more of a bargain if they had to hunt a little for it.

6. Not talking with other webmasters

There are lots of other people working on these programs - talk to them on discussion lists, bulletin boards, etc. A couple you might want to join (by sending a blank e-mail) is the unmoderated discussion at MakingMoneyOnline-subscribe@listbot.com and/or the announcement list at WebmastersMakeMoney-subscribe@listbot.com

Sometimes you really can help each other out. Sometimes they'll trigger new ideas.

7. Not putting content on your site

Why do people visit a web site?

To get information, to meet other people, to have fun, and for many other reasons.

What do you find on most affiliate web sites?

Just a load of banners or links - ask yourself would you visit a site like that (except by accident)? - Would you tell your friends about it?

Content is what attracts visitors to your site - and what keeps visitors coming back. Additionally text content can help you get more hits from search engines (the more text the better).

Good quality content = visitors = money

8. Sticking with a free hosting service

I visited a great web site yesterday - and guess what I can't remember the URL ! Why ? Because it was a free host - and the URL was 50 characters long.

I visited another great web site the day before - bit I won't go back - I found it very annoying - there was an annoying popup advert - which I kept closing - and which kept reopening every time I went to a new page.

Does this sound familiar? It should - you can make a lot more money with a professionally hosted web site and your own domain name.

As soon as you can (or better yet from the start - so you won't have a difficult transition later) get your domain name and get your site professionally hosted.

By the way I should mention there are solutions for "shorter URLs" for free hosting services. Yes they do work - but there is a trade-off : typically your site is in frames (so harder for search engines to crawl) - and some of these shorter URLs add unpaid adverts to your site.

9. Setting minimum commissions too low

Most programs have minimum commission amounts before they send you a check (there are a few exceptions) - and many programs even let you configure this to your preference.

Unless your bank cashes checks for free - you can reduce your bank charges (and therefore keep more of the money) by raising the minimum commission amount and accruing your earnings (getting paid more, but less frequently).

This is a particularly important tip for non-US affiliates - as most affiliate programs pay in US dollars - and most overseas banks charge $10 or more per US check.

10. Not promoting your site

You need to constantly promote your site to get visitors (this ties in with tracking too - so you can see the results for each type of promotion).

Get indexed into search engines.

Place adverts on FFA or free classified sites - if they are appropriate for you (I'd only recommend it if you earn a lot per sale).

Mention your URL on business cards or off-line media.

Swap links with other sites

Use banner exchanges aggressively (tracking the results of each banner).

Even consider buying click-thrus from Clicktrade or Goto (you won't want to this unless you know you're going to make money - which is yet another reason to track all your stats).

AND MOST IMPORTANTLY: Remember to promote your own site - not the affiliate URL. You may change affiliate programs later, you will have multiple affiliate links on your site, you want more than one "shot" at each potential customer - and the only way to handle all of this, is to promote your own site - not somebody else's.

Bonus Tip: 11. Don't Cheat

Unfortunately you see quite a few sites that attempt to cheat affiliate programs and pay-per-click advertisers.

Don't do it.

(i) You will be caught: advertisers have increasingly sophisticated tools to catch cheaters - and cheaters don't get paid.

(ii) It's fraud: Would you steal from a store or rob an old lady? Just because it's on the Internet - it doesn't make a theft okay.

(iii) With just a little effort - it's easier to make money legitimately. Wouldn't that give you a lot more satisfaction?

Sunil Tanna has over 10 years experience in the computer industry and is a very successful affiliate of a number of programs. He runs a number of highly profitable web sites including WildComputer.

He provides reviews and tips on affiliate programs that he's personally tested, manages the successful free2fax affiliate program and is now working on providing free and low cost content for webmasters .

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