So much of affiliate marketing’s promise seems available only to big merchants. Not true! In fact, affiliate marketing is a great solution for small businesses. And, best of all, in some ways, affiliate marketing may fit small businesses.
Several providers offer solutions with low or no upfront costs. Affiliate marketing is generally a completely hosted solution, so there is very little technical effort required. Ongoing costs are performance based; business owners only pay when the cash register rings.
Just How Many Small Businesses?
According to recent research by AMI, the U.S. is home to some 7.4 million small businesses. Of these, 4.2 million small businesses have Internet access. By 1999, over 2.8 million of these small businesses were transacting business on the web, representing a 55 percent increase over 1998.
Pick a Partner
To get started, sign up with one of the low-cost affiliate networks: Microsoft bCentral’s ClickTrade, Commission Junction or Dynamic Trade. ClickTrade is a particularly good choice for small businesses wanting no upfront costs. However, it also comes with a hefty 30 percent commission rate. For about $1,000, small businesses can join Dynamic Trade or CJ. Both are good choices, and Dynamic Trade is especially good at hands on service.
Generate Some Banners
You’ll need some banners, buttons and links. You can, of course, use existing banners if you have them. If not, check out quick services like BannerWorkz.com. Alternatively, find yourself a freelancer at places like elance and guru.com. Your focus should be on creating links that reflect a variety of your products and services, since webmasters generally affiliate only with programs that offer products matching their site’s focus.
Set Your Commission Rates
Small businesses should pay special attention to commission rates, because the tendency is to set payouts too low. This proves to be self-defeating for small businesses. To motivate affiliates to join your program, it’s necessary to set generous commission rates – at least on par with similar national providers.
While large merchants often benefit from name recognition, many small businesses will need to do extra work spreading the word about their program. Certainly, the directories will help. However, even more than with other merchant programs, small businesses will find that recruiting their own affiliates proves critical. The key is developing a base of highly targeted and loyal affiliates.
One tactic that small businesses can employ in their quest for affiliate traffic is a link back to their affiliates – think of them as channel partners or distributors. While large merchants could do the same thing, it just doesn’t scale when you have 250,000 or even 10,000 affiliates. However, small businesses could nicely organize even a few hundred links back out to their affiliates.
Supporting the move of small businesses into affiliate marketing is a new series of conferences from AffiliateForce. During the next six months, the road show will travel to Los Angeles, Seattle, San Francisco, Chicago, New York and Houston. Organizers plan to hold the events near city airports whenever possible. General sessions are on Fridays with optional workshops on Saturdays.