Affiliate Marketing

Posted by Nick Niesen on October 26th, 2010

Affiliate marketing can greatly increase sales figures with only a little increase in the quality and quantity of affiliate partnerships. The advantage of using affiliates is that it increases the leverage in the marketplace.

Imagine getting people out there selling your product all day for free, and they don?t make a penny until they start selling stuff for you. It?s great writing checks because each dollar you write to an affiliate, you are getting two dollars back into your own pocket.

Someone once said in response to a question on increasing page ranks in search engine searches that eight simple words that has been incredibly important, ?I rely on my own network of affiliates?.

Affiliate manager, Stu McLaren, said the advantage of increasing affiliate numbers was clear, but it was important to have active affiliates that continue to promote the product each months rather than in a one off attempt. Understanding how affiliates increases sales can be easily seen in a formula.

Fig. 1
Total Sales = Product or service price * the number of active affiliates * number of monthly sales per affiliate.

Increasing any part of the above formula will increase sales; however increasing the product?s price will have a decreasing effect on the other two variables in the formula. Not all people that pay $30 for a product of service will be as willing to pay $40. However increasing the number of affiliates, or sales they make will have an exponential increase on the bottom line.

Fig. 2
Original sales:
Total Sales $10,000 = Product price ($100) * affiliate numbers (10) * monthly sales per affiliate (10)
Increasing affiliates:
TS $15,000 = Product price ($100) * affiliate numbers (15) * monthly sales per affiliate (10)
Increasing affiliates and monthly sales:
TS $22,500 = Product price ($100) * affiliate numbers (15) * Monthly sales per affiliate (15)

What this example shows is that it doesn?t take huge increases in the number of affiliate or units sold to have a substantial increase in the bottom line.

It is important that the affiliates are active, and they worked each month to get the product out to the marketplace. The role of an affiliate manager is to ensure that affiliate numbers increased and there are a high number of active affiliates.

It is just now coming to peoples? mind that such a small increase can have such a huge impact. Businesses are now looking for affiliate managers and if you look at the employment lists, affiliate managers are being sort after.

There is a very small amount of affiliates that would be classed as active affiliates. I would say on the average affiliate list about 2.5 to 5 per cent would be active. The role of the affiliate manager is to increase the number of active affiliates and train them to sell the product.

It is in the best interest of the manager to train affiliates because they were more likely to remain active and draw more affiliates into the system if they increased their own individual sales figures.

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Nick Niesen

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Nick Niesen
Joined: April 29th, 2015
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