Sell Other People’s Stuff
Ajay Ahuja started his online business in October 2003 with absolutely no technical knowledge and has experienced online sales of over GBP 2m amassed from just a computer, a broadband connection and a bit of spare time. Ajay knows the sites and software that will save you your precious time and money and - used right - make you a tidy stream of cash.
If you sell other people’s stuff on the internet without any purchase of the physical product or service, no order fulfilment, no liability and no stock holding then you are both considered an affiliate. They are an affiliate to you (a merchant affiliate) and you are an affiliate to them (an advertiser affiliate). This is one of the most effective ways of making money on the internet and was the real trigger for me to see how easy it could be to make a lot of money very easily. There is very little for you to do other than market your affiliates hence the naming of this emerging industry of affiliate marketing.
Affiliate marketing is where you, the website owner, sell products and services of companies you have decided to affiliate with (partner up in other words) in return for a commission.
The reason why this industry has exploded over the last five years is because the whole process can be automated. To become a reseller of someone’s goods or services in the past required an initial phone call, a few meetings, a draft contract and then a final contract agreeing the terms and conditions. This cost a lot of time and money in lost productivity and professional fees. Today you can affiliate with some of the big high street names like Comet, John Lewis, Woolworths, Lloyds TSB, etc with just a few clicks - honest!
How it works
These are the basics.
- 1.You see a product or service on the web that you wish to sell. So you look for the link on the site that says ‘Affiliates’, ‘Affiliate sign up’, ‘Partner program’, ‘Make money with us’ or something like that and click on it.
- 2.They will tell you what commission you can earn if you sell their stuff. If you like what they’re offering you can click further onto an affiliate sign up form where they will ask you the basics such as name, address, etc plus also how you wish to get paid, i.e. cheque, direct transfer, Paypal, etc. So you sign up.
- 3.After sign up you are directed to a page which gives you your all important ‘Affiliate link’. This is a unique domain name which is related to you. So for example if I were trying to affiliate with Vodafone then my affiliate link may look like www.vodafone.co.uk/aid=ajayahuja. It doesn’t matter what it looks like, but it will be a unique domain so that Vodafone can identify where their visitors have come from.
- 4.You include this unique link on your website and when anyone clicks through your link, visits Vodafone’s website and buys from Vodafone’s website within a specified time (usually 30 days) you will get paid a commission.
To try to think of this visually: think of your website as a market stall. You have approached the Vodafone shop at the other side of the town to introduce potential customers for them and they said they will pay you £20 for every new customer who buys a phone. To identify your introductions they give you this pen which makes an invisible mark on people’s clothing but can be seen by a Vodafone’s special lighting. Your pen colour is unique so that if a person comes in their shop with your ink on their clothing and buys then Vodafone will send you a cheque for £20 because the sale is traceable back to you.
Now this is occurring like mad all over the internet. Your internet persona is probably covered all over in this invisible ink and you have no idea! There are affiliate marketers out there that have enticed you onto their site because they promise independent reviews of products (such as Which), promised to tell you where to get the best price (such as Kelkoo) or simply because you log in to your email on this page and something caught your eye and you clicked through (such as MSN). All these companies employ affiliate marketing tactics and are making a nice little income off your back!
So it’s down to you to get some income yourself. I know exactly where to go to get affiliated with the biggest and widest choice of affiliates and only require one sign up. These websites are like middlemen to the people who wish to market the goods and services and the companies looking for people who they want to market their goods and services.
Visually it looks like this:
It’s a big market place hosted by these middlemen where you can pick and choose who to be affiliated with.
The three commission types offered by these middlemen websites
The three types of commission you can earn from being an affiliate marketer are:
- 1.Pay per click.
- 2.Pay per lead.
- 3.Pay per sale.
1. Pay per click
Once you have obtained your unique link from these middlemen websites they will record how many clicks you receive on a daily basis. They will check that they are valid clicks to prevent click fraud (i.e. someone repeatedly clicking on your link) and will pay over whatever the agreed amount is per click.
So if you have this link on your website, and the agreed amount is 50p per click and you get ten visitors a day clicking on this link you will earn 10 × 50p = £5 per day. I will teach you how to get your affiliate links clicked further in the chapter, but I hope you can see that simply having a website with affiliate links can really deliver you a nice passive income. I mean, just imagine if you had 1,000 visitors a day clicking that link. That’s £500 a day and trust me there are website owners out there who are making that and more from just one pay per click affiliate link.
2. Pay per lead
This is where a user clicks through your link and then fills out a form and clicks ‘send’ so that the affiliated site gets a lead. The form will usually at a minimum ask for their name, phone number and email. You get paid an agreed amount every time someone fills out this contact form and clicks on send. The affiliated site will then check the lead for authenticity by making contact, ensuring that the lead is genuine (so don’t get ideas of sending the whole BT phone book because they will not pay out).
This is one affiliate link I promote heavily. I affiliate to many loan sites and they pay me up to £115 per authentic lead. Their criteria are that the lead must be over the age of 18, a home owner and looking to raise finance. If this is the case I get paid. I roughly get one in four leads approved and I have these links dotted about on my site. I reckon I earn about £3,000 to £4,000 per month from these links and all the payments go direct into my bank account. Now that’s what I call passive! All I have to do is make sure my sites are live (by making sure I’m up to date with my credit card payments for the site) and I can be assured that someone every day will click on one of those links so I get paid.
3. Pay per sale
This is where a user clicks on your link and actually buys on the affiliated site. So the user clicks on your link, visits the affiliated site, likes what they see and buys within a certain period of time. So they could visit the affiliated site, come away from it and come back seven days later, due to finding the site again, and buy and you will get paid. The only way you wouldn’t get paid is if they found the affiliated site through someone else’s affiliate link and not yours. The period of time is set by the website selling the stuff and is usually 30 days.
The sorts of commission you can get are a percentage of sale or a fixed amount per sale. Another exciting feature of pay per sale is that you can get lifetime commissions. So if the affiliated site offers 30 days tracking and a sale happens which results in the registering of a user and you get a percentage of sales of a user for life, then you can earn an income for life.
So, for example, this is a case that actually happens to me. I have several users who have registered on a gambling site through one of my affiliate links and I earn a lifetime commission on the profits on these users (i.e. the personal losses of these users) as long as they use this gambling site. I earn around £200 to £300 per month for this and I really do nothing because as long as they play (and lose!) I will still get paid no matter what I do. Just imagine if you had 1,000 registered users on a gambling site that paid out like this… you’d never have to work again!
List of middlemen websites
I’m sure you’re itching to know where to find these middlemen websites aren’t you? If not you should be! You can find all the middlemen websites at:
How to choose who to be affiliated with
There are only two rules you need to follow when choosing who to affiliate with.
- 1.The sites most relevant to your site.
- 2.The sites that pay well.
1. The sites most relevant to your site
If you have a site about French bulldogs then there is no point trying to recommend they open up a casino account with 888.com even if they do pay £100 per sign up! This is because your readers will simply be not interested in this because they come to you because of your information on French bulldogs. You may get the odd person interested in French bulldogs and in your offer of opening up a casino account, but the likelihood is very low and even though you might get a sale the amount of credibility you will lose will not make it worth it.
So in this example of a website about French bulldogs your readers would be much more receptive to you telling them about Direct Line’s pet insurance which only costs £8 per month. They could sign up via your link and they will be unaware that for every click/sign up/sale you earn 50p/£2/£10 or whatever it is that Direct Line pay out. The conversion rate will be a lot higher than a gambling site!
This is why it is handy to have a site that you are personally interested in because you will have an intrinsic idea of what is of interest to your readers; you will have an understanding of their wants, desires and needs. If you know that vet bills are rising beyond inflation and you know that French bulldogs are more susceptible to infection, injuries, etc then pet insurance for vet bills will be a hot topic and well received. If you know rough costs of pet insurance to be £10 per month and Direct Line are offering £8 per month then you know that Direct Line’s offer is cheap and will convert better. So really understanding your reader will help you choose the affiliated sites so that they get clicked and you get paid.
Since I am in the property investment game I know that property investors are interested in:
- raising finance cheaply and quickly
- finding cheap and below market properties
- money making ideas
- obtaining their credit file online.
I also know they are not interested in:
- gambling sites
- broadband and telephone call savings
- getting a deal on electrical goods.
Do you know how I know this? Because I have seen what has worked on my own sites and how much I’ve earned from having affiliated links for all of the things listed above. I too got tempted by the big commissions offered by gambling sites and realised that even though you get a few sign ups you don’t really earn as much as if you did a proper targeted offer that is relevant to your reader.
I have around 20,000 subscribers on my property investment list and if I do a gambling promotion I might get one sign up which pays £60, but compare this to a loan promotion which pays £75 per lead where I might get 40 people making an application. So the gambling promotion earns me 1 × £60 = £60 and the loan promotion earns 40 × £75 = £3,000. So you can see how easy it is for me to decide what to promote and what not.
So browse the middlemen websites merchants’ categories and see what categories would be of interest to your readers. Then look into the detail of what each merchant sells and think whether any of their products or services would be of interest. If so, sign up (if it pays well - see below), get your unique link, bung it on your site or newsletter and send out. If you add a sales pitch to it then even better! Don’t forget what I taught you in Chapter 3 about creating a sales pitch.
2. The sites that pay well
Let me explain this by way of an example. I was looking for an insurance site to market and I came across this insurance quoting site. Now I know that roughly 1% of subscribers to my property investment website would be interested enough in what I recommend to fill out an enquiry form or quotation form if I wrote a sales pitch about a particular insurance site.
So I looked at what this insurance quoting site was offering to affiliates and I was stunned. They were offering 1p for every quotation request regardless of if they take out the insurance. Wow wee! Let’s say this insurance quoting site was super duper and 2% of my subscribers responded, then I could expect to earn:
2% × 20,000 × 1p = £4
Now I don’t know what your time is worth, but there is no way I could justify writing a newsletter about an insurance quoting website if all I could expect to earn is a few quid.
So I can hope you can see that you have to be affiliated with websites that pay a decent amount. The way you determine this is not as easy as it seems. In the above example you can see that there is no point in getting involved with a website that pays 1p per lead, but what about a merchant that offers £100 per validated lead where successful validation only occurs 1% of the time or £100 commission per sale where a sale only occurs 0.2% of the time?
The way you determine which sites pay out the most is by looking at the statistic ‘Earnings per click’, ‘EPC,’ 7 Day EPC or something like that. The middlemen websites calculate how much the merchants pay out relative to the number of clicks generated by all affiliates over a period of time. So for example you could have two merchants, one offering £100 per validated lead, and the other offering £50 per lead and they both could have received 1,000 clicks over the last seven days from all the affiliates. Then compare this:
Company A receiving 100 leads from these 1,000 clicks and paying out on ten of those leads of £100 each.
Company B receiving 100 leads from these 1,000 clicks and paying out on 50 of those leads of £50 each.
We can deduce that the earnings per click are:
Company A - (10 × £100) 1,000 = £1
Company B - (50 × £50) 1,000 = £2.50
So we can see that even though Company A offers a headline commission of £100 per lead, a clear £50 higher than Company B, you actually earn more from Company B because they validate leads less strictly. So Company B would be the choice to affiliate with if they both offered the same product or service. What is to be learned here is do not get seduced by the headline commission. It’s better to go with a merchant who offers you £1 per click/lead/ sale and pays out rather than a one who offers you £100 per click/lead/sale and pays out nothing! And trust me there are merchants out there who promise the world and pay out nothing, so beware.
This is also applicable for pay per sale. You may have the scenario where 1,000 clicks result in:
Company A receiving 100 sales from these 1,000 clicks and paying out commission on those sales of £10 each. Company B receiving 200 sales from these 1,000 clicks and paying out commission on those sales of £10 each.
So the EPC would be:
Company A - (100 × £10) / 1,000 = £1
Company B - (200 × £10) / 1,000 = £2
So company B has a website that converts better than company A. It may be because it has a better sales pitch or a better product or service. Whatever it is you should promote Company B’s website as the EPC is higher.
If there is no data on the merchant because they are new then look at what they are offering and see if it looks reasonable. For each type of commission consider the following.
Pay per click
This is fairly obvious to deduce. Either you like the amount or not! It’s easily trackable so if they’re offering you an amount that you’re happy with then go for it. My threshold is around 50p per click. I would happily place a link on my site if the merchant would pay me 50p per click. Obviously it’s a personal choice and you have to decide what you’re happy with.
Pay per lead
Find out what they determine as a lead. If it is just their email address, and as long as it’s a genuine working email, then it’s likely that you will get paid as all they are asking for is a genuine email. So go to their website and if the form looks a simple one with a two-line form requesting the first name and email then it will be likely that you will get paid something. So as long as it’s a decent amount they are paying, i.e. in excess of 50p or so, you can expect to potentially earn something from promoting their site.
If they determine a lead as someone filling out an eight page contact form asking their age, where they were born, their nickname at school and the size of their inside leg and only deem it to be a proper lead if they can contact the lead within five minutes of the merchant receiving the lead, then it is unlikely you will get paid. If there are too many obstructions to them paying out, like having too many questions or impossible contact times, then forget them. Stay away from these merchants as they are unlikely to pay out and all they want is free leads.
Pay per sale
If you are affiliating stuff relevant to your reader then the best test is to ask yourself ‘would I buy it?’. If ‘no’ still ask yourself ‘would I consider buying it under different circumstances?’ like a different price, extra features, etc. If ‘yes’ then consider promoting it. You are the best acid test. If you would consider buying it then it will probably sell. Just because you think it’s expensive or it doesn’t do enough it doesn’t mean that it is not attractive to someone else. Try to be unbiased about it and do not get seduced by the high commission rate. Step back and try to look at it realistically.
Not using middlemen websites
Some merchants (including me!) do not use middlemen websites. This is because they ask for too much of a cut or they simply have too high quality control procedures. In these circumstances you have to deal direct with the merchant themselves. This does not mean you have to speak to them or anything because you can sign up directly on their site. All you have to bear in mind, other than what has been said in this chapter is:
- 1.Check that the software they are using looks like it’s going to track your sales. If they don’t work you could end up promoting their site and never getting paid.
- 2.Keep track of who you sign up with. You will need to routinely check each individual merchant’s affiliate login page to make sure they are paying out on your sales. Some affiliates can be really slow paying and sometimes they never pay. In this case remove your affiliate link immediately as you are promoting them for free.
Do not go overboard and clutter up your site with a load of affiliate links. Be selective. Go for the ones that convert, pay out and look good. Since you are associating yourself with these websites you need to make sure they’re good ones with good customer support, easy to use, working websites and reliable. You are potentially putting your reputation on the line as you are endorsing their product so choose wisely.
Remember the saying: ‘show me your friends and I’ll tell you who you are’.