Knowledge Archives
http://www.co-internet.net/net/articles/clonedike.txt.html

"Bye, bye, Clonedike!"
Why the affiliate programs treadmill may not be such
a brilliant idea after all
------------------------------------------------------
by
Ralph Tegtmeier
------------------------------------------------------

If statistics (http://www.stores.org/archives/nov99edit.html)
are anything to go by, chances are your membership in
any given online affiliate program won't make you
more than $50 per year - if that!

Because this figure is a mere statistical average
(i.e. an arithmetical means), real life turnover data
for about 95-97% of all affiliates tends to be even
worse than that.

Obviously your mileage may vary, and this article is
not intended to discourage anyone from participating
in affiliate programs pertinent to their web site's
focus. There's no denying that affprogs are gaining
in importance in overall ecommerce efforts, with
ever more companies, large and small, jumping on the
wagon to expand their sales force base at minimum
cost.

Still, looking beyond the ubiquitous hype surrounding
affiliate programs these days is in good order: because
unless you choose your partners wisely, you may
actually lose quite a bit of money by signing up and
dedicating resources to such programs which might be
better and more efficiently employed elsewhere.


Your Time

Let's be conservative in our estimates concerning the
actual time spent in locating, checking out and
signing up for affprogs, download of graphics and/or
link boxes, etc., plus the inevitable double checking
of sales stats, traffic logs, accessibility, and more.

Here's one suggested format to go by. We will assume
for simplicity's sake that you have signed up for
20 affprogs, with each of them indeed making you the
statistical average of $50 a year.

This could result in the following overhead:

- if it takes you say one hour per week to check out
your 20 affprogs' online stats, that's a full
52 hours a year;

- add another appr. 20 hours per year to install,
encode and adjust affiliate links on your web pages,
download new graphics and follow their newsletters,
check out and implement new offers, etc.;

- add another estimated 20 hours per year answering
email inquiries about affiliate products and
services: even if you refer your leads to your
partners' sites in the end, people may (and usually
will) ask you about your personal experience with
a given product or service; they may have technical
questions ranging from ordering procedures to the
reliability of your partners; this being personalized
email, you can't simply turn people over to some
brain dead autoresponder program.

Time total: 92 hours/yr. or 4.6 hours per affiliate
program seems a realistic if somewhat conservative
estimate.

Your Money

Even though signups may be free, you will still have
some serious financial overhead to take into
consideration.

- Tracking software: you will require this to counter
check on your affiliation partner's traffic and
sales stats. While you may easily get a tracking
program for free if used on private web sites,
commercial sites such as yours are another matter,
so you will have to register it for, say, $50.
Installation, modification, checking procedures and
updates may very well eat up another $50 (a rather
optimistic estimate).

- Affprogs related telecommunication and online
charges may range from $0 to $200 a year or more,
depending on your location and tariffs, but let's
assume a very conservative estimate of only $40
per year for all 20 programs combined.

- Affprogs related webspace and bandwidth charges
will, it is assumed here, amount to appr. $20
per year for all 20 programs consolidated.

Costs total: $160/yr. (The first time acquisition fee
for your tracking software can, of course, be deducted
from the following years' overhead.)

So what does this boil down to? Assuming the
statistically perfect world, a total of $1,000 in
revenues less cost of $160 leaves us with $860 in
net profit before taxes.
For this, you will have worked 80 hours as expounded
above, which gives you a net average of $9.35 per hour.
So you'll actually be slaving away for less
than $10 an hour! On the condition, let it
be repeated, that you will actually make those
statistically defined 50 bucks per program, which
in itself seems very doubtful.

Again, the purpose of this article is not to knock
affiliate programs. But what our analysis does go
to show is that:

1) there's no need to hold your breath regarding
the money you'll be making from them;

2) it will only pay off to work with affprogs if
you stay in focus.

Don't be indiscriminate! If you're selling apple carts
online, affiliate partnerships offering apple peelers
may seem relevant enough to your site's specific
clientele to make you a few nice bucks on the side.
On the other hand, promotion of diapers, cheap
Caribbean tours and web site translation programs will
obviously not. So stay focused - less is more in this
case.
Also, people don't appreciate being inundated with
promotional material anymore (if they ever did) - so
you may actually make more money by presenting a web
site with sparse ads for your affiliate programs if
only by contrast with competitors' setups where people
are still being hammered with scores of irrelevant,
garish banner ads and popups documenting mere greed in
lieue of genuine concern for visitors' specific needs
and requirements.

This text may freely be republished or distributed in unmodified form provided the following resource box is included intact either at the beginning or the end of the article and a complimentary copy or notice (link) is sent to the author at the address specified below:

Ralph Tegtmeier is the co-founder and principal of fantomaster.com GmbH (Belgium), < http://fantomaster.com/ >, a company specializing in webmasters software development, industrial-strength cloaking and search engine positioning services.

He has been a web marketer since 1994 and is editor-in-chief of fantomNews, a free newsletter focusing on search engine optimization, available at: < http://fantomaster.com/fantomnews-sub.html > You can contact him at mailto:fneditor@fantomaster.com
(c) copyright 2002 by fantomaster.com
All rights reserved.
Downloaded at: < http://fantomaster.com/ >