Day 7: Plan Your Monetization Models – Part II
Remember:
Goal-of-the-DAY... The overall goal is to expand your site’s blueprint by planning how you could potentially monetize visitors interested in your niche (i.e., Site Concept), starting with the affiliate monetization model.
4.2. Reduce Risk by Diversifying
One of the major attractions of becoming an affiliate is the small amount of risk involved. As an affiliate, you have little or no...
• product development expenses
• advertising costs
• inventory to maintain
• overhead expenses (salaries, physical location, etc.)
In other words, affiliates do not have millions at stake.
But you do have one big risk...
If a merchant or backend provider goes out of business, it takes you with it. Let’s talk briefly about how to minimize this risk...
After you review the affiliate directories and backend providers, you should have a good selection of programs. How many programs should you choose? How do you know which ones are solid?
You don’t, really. Yes, you can weed out the dogs by doing the basic research outlined below. But most of us just don’t have the ability or time to thoroughly analyze a company, its financials, and its business model… and then predict success or failure.
So your best bet is to spread your business among as many programs as possible that fit with your Site Concept. But there are some important qualifiers to this policy...
1) If you represent 10 programs, don’t put them all on the same Keyword-Focused Content Page. Work in only the few that are tightly relevant to the content of each page.
2) Pick the best-of-breed from each category of merchant. For example, if you plan on representing a Net marketing company, SiteSell would be the obvious choice (ahem!).
If you plan unusually heavy support for a given category of product, you might want to represent the best two merchants. For example, suppose you foresee hundreds of book links on your site. It might be a good idea to choose the best 2 online bookstores -- if Bookstore A and Bookstore B fit with your concept and both seem to be stable companies, then use these two. No more, though...
3) Don’t choose too many programs. Tracking each program takes time, so 10 programs is probably a good balance. If any one of them dies, you don’t lose too much.
4) Your best results will come from focusing on a smaller group of quality programs (from within the 10). Their products must...
• be excellent
• be complementary with, even enhance, each other
• fit your concept
and...
• be from a rock-solid company. Since you will give these companies more
attention than the others, you must feel very comfortable with their business
prospects.
Here’s the bottom line...
Don’t give too much emphasis to any single program, unless you have some special reason to feel unusually comfortable with it.
Things happen. So protect yourself by choosing a variety of affiliate partners.
Of course, you can also reduce your risk by weeding out the dogs through some basic research...
4.2.1. Prune by Eliminating High-Risk Programs
Find the good programs and eliminate the dogs by considering the following plus signs, minus signs, and red flags. Let’s start with the plus signs, signified by + (which means “good things to look for”). Here they are, in the approximate order of importance...
+ High quality product or service -- Remember, it’s your reputation that is on the line (and online!). Don’t recommend products that UNDERdeliver.
+ Merchant has a good site that sells effectively.
+ Ability for affiliate to link straight to individual products, rather than just to the home page. (If the visitor has to find the product that you recommend, your Conversion Rate plummets.)
+ Type of payment model... Pay-per-sale and pay-per-lead are good. This is true “performance marketing.” If your referred visitor delivers the desired response, you get paid. What about “pay-per-click?” See red flags below.
+ Affiliate Support...
• Accurate, reliable, real-time, online accounting, preferably with some kind of ability to “audit” by spot-checking
• Detailed traffic and linking stats
• Notification by e-mail when a sale is made
• Useful marketing assistance -- provides traffic-building and sales-getting tools
• High-quality newsletter that educates, trains, and accounts for amounts earned
• Professional marketing materials available
• Affiliates receive discount on products
+ Pays good commission -- Hard goods have lower margins than digital ones so their commissions will be lower. Still, you should make at least 10% (hard goods) or 20% (digital goods) on any product that you recommend.
Don’t be scared off by low-priced products if they offer a good % commission -- the lower dollar value per sale is offset by the higher sales volume.
+ Must be free (no charge) to join, no need to buy the product.
+ Lifetime commission -- If the program pays a commission on future sales of other products to customers that you refer, this is a huge plus.
+ Two-tier commission -- If the program pays a commission on affiliates who join because of you, this is also great.
+ Lifetime cookie -- Do you receive a commission if the person you referred returns and buys within one month? Three months? The cookie that tracks this should not expire.
+ Restriction on number of affiliates -- You won’t find many of these. But if you do find one, grab it.
+ Monthly payment, with reasonable minimum.
Do all those plus signs have to be present?
No. But the more, the merrier.
~.~.~.~.~.
Minus signs are definite detractors. Naturally, if you are unable to give a + to any of the criteria listed just above, consider its absence to be a minus. And watch out for these negative factors...
— Slow and/or poor support.
— Unethical conduct of any kind.
— Reports of late (or lack of) payments.
— Allowing spam, or seeming to send spam themselves.
— Defective affiliate-joining process. Hey, if they can’t get this right...
— Clauses in the agreement that you find unacceptable.
• Example -- If lifetime customers are important to you, then a clause that allows unilateral termination or modification of the agreement at any time by the company without just cause effectively makes the lifetime commitment of no value.
• Example -- No exclusivity (i.e., you should be allowed to represent more than one book vendor).
And perhaps the most worrisome factor of all…
— “The dark side” of affiliate programs. Is the program really just a way to legally bribe folks to recommend overpriced, UNDERdelivering products in order to collect excessive commissions?
Red flags! are warning signs...
Red flags! “Pay-per-click” method of payment. In this method, you get paid whenever a visitor clicks on your link. No purchase or lead-generation necessary.
Unfortunately, it’s wide open for abuse -- very sophisticated folks create incentives to get thousands of people to click on their links. But the visitors could care less about the products being promoted. The scam is virtually unstoppable.
And merchants end up paying for nothing.
Sooner or later, merchants seem to throw in the towel against the onslaught. So be wary -- this kind of affiliate program tends to dissolve or mutate into a different model.
Red flags! Multi-tier commission. This is online Multi-Level Marketing (MLM), which is perfectly legal. Do your due diligence to make sure, of course, that a multi-tier program is not an illegal pyramid scheme. If the “game” is to earn income by signing up others, you are most likely dealing with a pyramid. Many people confuse honest, legal MLM with dishonest, scammy pyramid schemes.
With MLM (also known as Network Marketing), it becomes as important to build a strong downline as it does to sell product. Also, MLM companies are subject to numerous regulations (to prevent them from becoming pyramids, basically). Not all online companies are complying (or even know about this!).
Watch for a big shakeout with many of these companies going belly-up. If multi-tier interests you, I would recommend that you check out established offline MLMs that are now online. Investigate all others extremely carefully before you decide to invest a lot of time in these.
Red flags! Poor or little info about affiliate program available. What kind of priority could it have?
Red flags! Dead links on merchant site.
Red flags! No clear anti-spamming policy visible on site.
Red flags! Site that promotes “get-rich-quick” gimmicks.
Red flags! Financially unstable. You can lose a lot of momentum if a company goes under, especially if you are banking on lifetime customer/2-tier promises.
4.2.2. How To Use Alexa.com To Get the Goods On Merchants
If you haven’t used this strategy yet, now is a good time to use it. Alexa serves as a wonderful final check in two ways…
1) Its stats indicate how successful a program is.
2) The related links suggest good competing merchants.
Check out SiteSell’s stats as a trial run…
Search It! > Popularity (STEP 1) > Alexa Ranking (STEP 2) > sitesell.com (STEP 3)
4.2.3. Prune Possible Partners By PageRank Score
Google uses the quality (and to some extent, the quantity) of in-pointing links to measure the importance of a page. The higher the score, the more highly Google regards the page. A score of 5 or higher indicates a certain degree of success.
Once again, Search It! pulls in that information conveniently for you.
Search It! > Popularity (STEP 1) > Google PageRank (STEP 2) > domain name that you are researching (STEP 3)
Great investigation! You've grown and pruned a list of affiliate programs for your Site Concept. This may well be your main monetization model. Following the principle of using more than one basket for your eggs, you have spread your programs among several merchants.
Now diversify further still. Take full advantage of what the Web has to offer by investigating other potential income streams…
4.3. Check Out Other Monetization Models
Your Most Wanted Response may be to have your visitor buy from one of your merchants. But what if you visitor doesn't want that product today?
Instead she notices another one of your offerings.
This is a WIN-WIN situation -- your visitor is happy and your Web site is steadily bringing you a stable income.
Some of the following monetization models will be as low-maintenance as affiliate programs are (i.e., no product to develop, store, ship, support, etc.).
Others will take more of your time.
Which will work for you? Only you can decide the best fit.
Let’s do a quick overview of the possibilities…
• Google’s AdSense Program -- AdSense is tailor-made for Theme-Based Content Sites. Combine participation in the AdSense Program with membership in two or three quality affiliate programs and you have a solid monetization base in place.
How does AdSense work? Upon acceptance in the program, Google selects relevant ads for you to place on your Web pages. You are paid for every ad clicked upon.
For complete details about the program, visit…
http://adsense.sitesell.com/
See how Rob monetizes using AdSense on his site…
http://www.sitesell.com/case-studies/info-to-egoods-rob.html
• Referral/Finders’ Fees -- With this model, you send visitors to specific businesses (offline businesses, especially) and get paid for the lead or sale that results.
Nori explains how she earns income through referrals…
http://www.sitesell.com/case-studies/finders-nori.html
• Net Auction Selling -- Auction products (hard or digital goods or services) that relate to your theme. Put eBay to work for you.
Merle and Pam use their site to funnel prospective clients to their eBay auctions…
http://www.sitesell.com/case-studies/auctions-merle.html
• E-good Creation/Sellers -- Almost anything can be digitized and sold…ebooks, photos, software.
Marney sells over 250 items through her simple PayPal shopping cart, including some audio-based e-goods!…
http://www.sitesell.com/case-studies/egoods-marney.html
• Services -- Offer a service related to your niche. Build a client base, locally and/or globally.
Nadir took advantage of the Web in a most unusual industry…
http://www.sitesell.com/case-studies/services-nadir.html
• Network Marketing -- Use the networking power of the Web to generate warm, willing-and-wanting-to-talk-to-you prospects... people who will call you, not the other way around.
Judd uses his site to extend his “warm circle of friends”…
http://www.sitesell.com/case-studies/network-marketing-judd.html
• Online store -- Sell hard goods that are related to your theme. Jim started with hand-made juggling balls (knitted at home by his 90 year-old mother!)…
http://www.sitesell.com/case-studies/selling-hard-goods-jim.html
Bottom line?
The more you diversify, the more stable and sustainable your business will be. And that brings us to an important decision you need to make…
4.4. Move Ahead or Loop Back?
You want to select a Site Concept that can accommodate a variety of
Monetization models. If you haven’t been able to find enough good affiliate programs or identify other potential income streams, you may want to reconsider your concept.
Return to DAY 4&5. Keep BREAKING OUT and adding more HIGH PROFITABILITY keywords. Come back to DAY 6&7 and find more good programs that fit.
If your concept is just so narrow and esoteric, you may want to stop the jet from taking off. In that case, return to DAY 3 and investigate the next concept on your “short list” of Site Concepts.
The key is not to feel that you must have your entire business worked out “to the nth degree” by working on DAYS 4- 7 forever. I don’t need to remind you that Rome was not built in a day, do I?
With that perspective in mind, please allow me to remind you of a small-business truism. The two biggest mistakes any entrepreneur makes are actually opposites of each other...
1) FIRE-READY-AIM -- the person who leaps before he looks. If this fits you, I can only repeat Ben Franklin’s quote...
“By failing to prepare, you are preparing to fail.”
In other words... ignore the preparation work at your peril.
2) READY-AIM-READY-AIM-READY-AIM -- the person who researches, then researches some more, then some more.
For this person, I can only offer this profound wisdom...
Fish or cut bait.
Or, as Nike would say...
Just do it!
In other words... Don’t get stuck “perfecting” DAYS 4-7.
So... if you have brainstormed a good Site Concept, picked your HIGHESTPROFITABILITY topics, selected excellent merchant-partners that you are proud to represent, and if you have identified other potential monetization models, then you are ready to roar ahead.
Time for me to hop off the old podium and remind you...
Before proceeding to DAY 8, please complete your DAY 6&7 Goal-of-the-DAY, and take note of your Ongoing Goal...
Ongoing Goal... Find, research, and select more POSSIBLE PARTNERS. Rotate the technique used (i.e., Search It!, Affiliate Directories, etc.). Keep your ears and eyes open for other potential monetization opportunities.
Let’s keep going! Are you ready?
Geez, what a question!
After all that preparation, you’re super-ready!…
Relevant Posts:
Achieve Financial Freedom Thru Affiliate Masters Course
Achieve Financial Freedom Thru Affiliate Masters Course - Day 1
Achieve Financial Freedom Thru Affiliate Masters Course - Day 2
Achieve Financial Freedom Thru Affiliate Masters Course – Day 3
Achieve Financial Freedom Thru Affiliate Masters Course – Day 4
Achieve Financial Freedom Thru Affiliate Masters Course – Day 5
Achieve Financial Freedom Thru Affiliate Masters Course – Day 6
Posts
