Affiliate Programs : Golden Opportunity or Waste of Time?

On the Internet programmers and designers rule, not the writer. Yet words drive targeted .....

Now that the idea of doing business over the internet has been firmly established, many potential internet businessmen are searching for the best way to do business. Usually the choice comes down to whether you want to set up your own business and online store, or sign up for an affiliate program.

First of all, let's define what we mean by an affiliate program. An affiliate program is basically an internet business set up by someone else. They could be selling physical goods, education, information or any other products that can be sold online. By signing up as their affiliate, you are helping them promote their business or store. In return, they will pay you a commission for each sale you bring them. The amount of commission varies between different affiliate programs. Examples of affiliate programs include Amazon.com and Wordtracker, which you can visit at:

http://www.onlinebiz-help.com/links/wordtracker.html

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1) EARNINGS

So how does an affiliate program differ from starting your own online store' Let's start by looking at the potential earnings. (After all, the main reason everyone wants to start an internet business is for the money). When you sign up for an affiliate program, you will be paid a commission for each sale you refer to the online store. This commission can range from 5% to 15% for physical products, and possibly up to 50% or more for virtual products such as subscriptions and ebooks.

On the other hand, if you start your own store, your profit can be much higher. For virtual products, your profit can be 100% of your selling price. After all, once the newsletter or ebook is created, you do not need to spend any more effort. When someone buys your ebook, they just download it from your website. If you are selling a physical product, your profit depends on whether you are manufacturing the product yourself, or buying from a wholesaler or dropshipping company. Your profit in this case could easily be more than 40% or 50%.

So, if you only consider the potential earnings, starting your own business is more lucrative than joining an affiliate program.

2) LOGISTICS

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However, money isn't everything (Or so they say). When you are starting your own internet business, there are a number of logistic issues you need to look at. Here are a few things you would need to take care of:

a) Create your website
b) Design your product (if you are selling new products)

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c) Create your product (if you are selling new physical products, or any virtual products)
d) Set up an online store
e) Set up a merchant account or payment gateway
f) Set up a warehouse or storage space (if you are selling physical products)
g) Have procedures and staff ready to fulfill orders
h) Set up an affiliate program to get others to market the products for you
i) Monitor for fraud
j) Monitor stock levels

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As they say, "No pain, no gain". Having your own store pays very well, but requires a substantial time investment from you.

On the other hand, if you sign up for an affiliate program, all you need to do is set up a website to promote the program. All the ads, banners, marketing text etc will be provided to you by the affiliate program. Your only responsibilities would be to get people to ......