Should You Use Affiliates to Promote Your Products?

Last week I shared my answer to a common question that many people getting into online product marketing ask: “Should I offer a money-back guarantee?” Today I want to tackle two others:

“Should I start an affiliate program to promote my product?” If so, “how much should I pay affiliates as a commission?”

I had this conversation only yesterday with one blogger who was launching his first ebook. He had decided to set up an affiliate program but was unsure about what percentage to pay. He were leaning towards 10% commissions, mainly because he didn’t want to eat into his profit margins too much. I’ll share the response I gave that blogger here.

But first, let’s take a step back to look at some pros and cons of affiliate programs.

Why an affiliate program could be worthwhile for your product

The main reason that you should consider an affiliate program for your product is simply that it will increase the potential reach that you will have as you promote your product.

Whether your blog is big or small, there’s always room to increase your reach and have your offer seen by more people. Pretty much every topic has other blogs, sites, forums, and individuals interacting on social media. To set up an affiliate program increases the incentive that these sites and individuals have to promote your product.

Of course, not everyone will be motivated by an affiliate commission (some bloggers don’t use them at all), but you will find that some are definitely moved by them and those people could open up a considerably larger audience for you.

Another benefit of affiliate programs is that they help to grow your own list of customers. This benefits you in the here and now with the product you’re promoting at present, but also offers potential for future products.

A new customer that comes in from an affiliate promotion today can turn into a life-long customer if you develop a relationship with them. A $10 sale from an ebook could end up leading to five more $10 sales in the coming year—or it could end up generating a $200 sale if you launch larger products down the track.

Why you might not want to start an affiliate program?

I think it’s important to note that having an affiliate program isn’t always the best option for everyone. There are some costs to consider along with the opportunities they open up.

• Decreased profit: Let’s start with the most obvious cost—affiliate programs eat into your profit margin. When someone recommends your product they do bring in new business, but you share the benefit of that business with them. A $20 ebook sale effectively becomes a $10 sale if you share a 50% commission. For some bloggers this is a stumbling block, and not something that they want to do (I’ll speak more about it below).
• Time: One of the big hidden costs of an affiliate program is the time that it can take to manage. I’ve not found it to be a huge time commitment, but there are some extra logistical tasks that you might find yourself doing when you introduce affiliates into your strategy. These include paying them (depending upon the system you use), providing them with sales material, motivating them, helping those who have limited technical knowledge to set up links, and so on. You will find that some affiliates need a bit more hand-holding than others—and some can be quite high maintenance!
• Loss of control: Another hidden cost of affiliate programs is that you lose a little control over the way your product is promoted. Not everyone will promote it in the same way you do. I can think of a number of times when this has been a problem—particularly when affiliates have used hype and built products up to be better than they actually are in order to get sales. In doing so they created false expectations in buyers that the owner of the product had to then manage.

How much should you to pay affiliates?

This is one of the most common questions I’ve been asked on this topic, but of course there are no real wrong or right answers. You’ll want to consider a number of factors:

1. Price of product: As someone who promotes a variety of products through affiliate programs, I know that it’s not just the percentage commission that I look at, but also the price of the product. For example, 50% of a $5 product is certainly not as attractive as 50% of a $100 product. There may not be a lot you can do about this, but it’ll be a factor for those considering promoting your product.
2. Size of the untapped market: If you’re just starting out and don’t yet have much of an audience of your own, you might want to consider a higher commission in order to give an incentive to affiliates to work for you to get things going. However, if you have a large audience of people who trust you already, you might not be as reliant upon affiliates to help you make your product successful.
3. Future product releases: Some people use affiliate programs more as lead generators than anything else. I know of a number of people who actually offer affiliates 100% of sales to give them a big incentive to promote the product. The hope is that, while the affiliate is the only person to make money from the initial promotion, the sales will generate a list of buyers to which the product owner can promote future products.
4. Tiered commissions: One strategy that some product producers use is to offer bigger affiliates a higher percentage than smaller affiliates. In this way, they increase the incentive for those who have larger audiences.
5. Physical vs virtual products (and other overheads): Many information products offer affiliates 40-50% commissions. This is in part because there are limited overheads on virtual products. To sell a $20 ebook only really costs me a few cents for hosting and bandwidth, and a small amount in PayPal and shopping cart fees (after the cost of design and so on). On the other hand, a physical product will have a much smaller profit margin. I have one friend who has an online camera store, and he’s only able to offer his affiliates 4% commissions, because his own profit margin isn’t high.
6. Consider your expenses carefully: Even if you’re selling virtual products, keep all of your expenses in mind. I had an interaction with an ebook seller recently who didn’t realize what the PayPal fees would be on his $5 ebooks. He offered affiliates 60% commissions on the sale price and, once he took out PayPal fees and his design and proofreading costs, he realized he wasn’t really making more than a few cents per ebook.

Why I pay 40% commissions instead of 10%

Let me finish with my answer to the blogger who was going to offer 10% commissions on his ebooks. He was concerned that commissions would eat into his profits, and was struggling to justify why he should really pay more to someone for simply promoting his ebook when he’d done all the work to make it.

I can see where he was coming from, but my philosophy for paying higher commissions on my own products (I pay 40%) is that any new customer that an affiliate brings in is a customer I’d probably never have had otherwise. So earning 60% (or $12 on a $20 ebook) is $12 more than I’d have had in my pocket than if I hadn’t had an affiliate promoting my product.

I also take into account the fact that that person buying my ebook might also buy future products from me (both my own and affiliate promotions that I promote). They may also recommend my products to their friends and may become a regular reader of my blog (and help to increase advertising revenue). So the inital $12 profit could end up being considerably more in time.

Do you have an affiliate program for your products?

I’d love to hear from others who sell products from their blogs. Do you offer an affiliate program? Why, or why not? If you do, what commission level do you pay, and how did you come to that figure?

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How to Increase Product Profitability After Launch

Many bloggers develop products as a way to monetize their blogging, but one problem that more bloggers are running into is that they become very dependent upon product launches.

A product launch can bring a lot of profitability to your blog, but what happens when things die down after that launch? For many bloggers, the income dries up after a launch, so they’re forced to start thinking about the next one. Once things die down after a spike of traffic from that next product, they’re again forced to starting thinking of another … and another…

Not only can this be an exhausting process (developing products takes a lot of energy), but it can actually give your readers launch fatigue:  they become frustrated with all your promotion and less responsive to your offers.

While there’s nothing wrong with offering multiple products, perhaps it’s worth considering some strategies to maximize the profitability of the products you already have. In this video, I share one tactic that has enabled me to increase sales of products over the long term, rather than just live off the spikes in profit that come after launch. In the video, I also mention an article that explains the topic in detail: it’s How to Extend the Profitability of an Ebook Beyond Launch Week.

See the full-sized video here.

Transcription: Extending the Life of Products After Launch

Today I want to talk today about products. A lot of bloggers have released products, whether they be ebooks, courses, membership sites, software, t-shirts—whatever it might be. A lot of bloggers have been releasing products in 2010. But what I’m seeing is some bloggers getting trapped into this cycle of launching products, and to stay profitable they feel like they need to be launching product after product after product after product. It’s understandable that they do that—and by “they” I mean “we,” really, because this is something that I’ve fallen into and have been challenged about recently.

The reason we do it is that when you launch a product, a good product launch should be a profitable thing, and it will see a spike in your revenue. I’ve posted my income trends over the last six or so months, and you see these months when I launch an ebook, there’s a spike in revenue. It can be an exciting thing, an exhilarating thing, and it can be quite addictive to see the dollars roll in when you launch a product. So if we want to see our income remain high, one of the things that we automatically think of is, well, if I had great income in July, and that spiked my revenue, maybe I need to launch another product to match it.

Whilst there’s nothing wrong with launching product after product after product, one of the things I’ve been challenged about lately is actually maximizing the profitability of the products that I already have. It can be easy to get trapped into this mindset of “I need to launch another product to increase my revenue,” but really there are ways of increasing your revenue by better promoting the products you already have. Rather than just seeing a spike in sales, and then seeing it dropping back to normal, what would happen if you could drive sales every day from your ebook?

Now one of the most logical ways to extend the profitability of a product is to do another promotion, and we’re seeing a lot of bloggers do that at the moment: Black Friday sales, where you can get discounts on products, and Christmas sales are coming up. We’ll see a lot of this sort of promotion at this time of year. That’s great—that’s one way of extending the profitability of a product. But again, it just leads to another spike in sales, and then things drop back to normal. So how can you actually increase the volume of sales of your products on a day-to-day basis?

The most obvious way to do this is to simply be promoting it in your sidebar, or in your navigation area, to be promoting the products that you’ve already released. That’s a great way to do it, and if you’re not doing that already, you really should be. Advertise your products where other advertisers would be advertising theirs, or instead of other advertisers advertising theirs. That’s a no-brainer.

Another great way to do it is to go back through the archives of your blog to old posts. Your old posts are still being read by people: people will be arriving at them from Google, they’ll be arriving at them from other blogs that link to them. They’ll be arriving at them from all kinds of places. So if there are relevant topics covered in your archives—they’re relevant to the products that you have—you really should be promoting those products on those particular pages, too.

So if you go to Digital Photography School and you look at a lot of the portrait articles that I’ve got there—free articles on the blog—you also see alongside them promotions of the portrait ebook that we produced. Now it’s a bit painstaking to go back through all your archives like that. You may want to find a way to do it by automatically inserting them into a category.
But even if you do go through them all manually, it’s well worth doing. Because, over the long haul, even if those links just bring you one or two sales extra per day, that can be hundreds over a year, and that can really prove to be a very profitable exercise.

Another way of doing it is to write future posts, and when you write about topics that are relevant to your products, again you should promote those products. Just have that mindset as you’re writing things, is this relevant, is this an opportunity to promote one of my products?

Another thing that some bloggers do is run advertising campaigns. I know of one blogger in particular who’s using Facebook ads and Google AdWords to promote their products. They’re not just relying upon the organic traffic coming into their blog—they actually know that those particular pages on their site where they’re selling products convert very well. They’ve fine-tuned their sales pages, they’ve worked out how much it costs them to get people to view those pages, and they’ve worked out that it can be quite profitable to pay for traffic to come to their site, and then sell their products there.

So there are some of the ways that you can do it. The most profitable thing that I’ve done is to actually be doing what Jeff Walker calls a perpetual promotion, or perpetual launch of products to your email list. If you have an email list where you have maybe a newsletter that goes out on a weekly basis, like I do on Digital Photography School, you can build a promotion into the sequence of emails that people get. Using an autoresponder, you can introduce an email that promotes one of your products.

So when you sign up for my photography newsletter, about nine days into the sequence you get an email thanking you again for signing up for the newsletter, reminding you that you’ve already had one of our weekly email updates, and offering you a 25% discount on one of our ebooks.

Then at the six month mark (so I’ve spaced them right out), six months after you’ve joined our list you get another similar email, just saying again thanks for sticking with us for six months now, we hope you’ve had some value out of our newsletters, and again, as another thank you for subscribing, here’s another discount code that you can use to get a discount on another one of our ebooks.

Those emails have converted really well for us. They’re very low sales-y, they’re not high, you know, high pressure—they’re simply, “here’s an offer, if you’d like to take it, please do, if you don’t want to take it, then no hard feelings at all. It’s just a simple thank you for being a subscriber to our list.”

So every day we get several hundred people sign up to our newsletter list, and so nine days after they do, those several hundred people get an email offering them a product, and then six months later, they get another one. So every day, not only do two or three hundred people get an email, five or six hundred people get an email, with those two products. Then we’ll add another one a few months later, and then there’ll be close to a thousand people getting an email every day, being reminded about our products.

Now you may not have that volume of subscribers subscribing every day, but even if it’s just ten every day, that’s 3,600 people over a year that will be getting those promotions, and that can really boost your sales. And in the long run, you can see more sales from that type of approach than the initial spike that you get from a launch of a product.

Now I’m going to link to a post below this video, which gives you more and will show you how I’ve actually done that. It’s an older post on ProBlogger but it’s really relevant to this topic, and I’ll show you how I have set up those emails in my own sequence. So if you’ve got another way of promoting a product that you might have for the long tail, not just for the spike, but to maximise sales over the long tail, if you’ve got a tactic along those lines I’d love to hear about that in comments below.

Thanks for listening and we’ll see you on ProBlogger.

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Top 5 Affiliate Sales Techniques

This guest post is by the team at E-junkie.com.

Working with so many merchants and affiliates gives us a great opportunity to see what different bloggers are trying to do to generate sales of affiliate products, and over time we’ve noticed that some strategies work much better than others.

These are the top five affiliate sales techniques we’ve seen work time and time again.

1. Only promote products you’re willing to stand behind 100%.

We had one incident on our site where someone bought something from a third party, didn’t like it, and got so mad that they launched a Denial of Service attack on us!

It’s very common for us to receive emails from people who buy stuff from our merchants but get mad at us for allowing people to sell what they see as substandard products. Initially we used to tell them that this is akin to writing to Bill Gates complaining that someone who made budgeting software using Excel didn’t do a good job, but now if we get too many complaints we just get rid of the product.

We have a certain brand that gets attached to whatever is being sold using our platform, and if a product is bad, people view us negatively, even though we have nothing to do with it.

The same applies to your blog.

Your customers will see very little difference between your products and the affiliate products you sell. They’ll blame you if they don’t like the affiliate product. Only promote products you really love, and are willing to back 100%—or your readers will lose their faith in you.

2. Don’t be afraid to experiment.

The range of products that our merchants sell never ceases to amaze me. Recently we featured a seller whose product is poo-shaped pillows! No, that’s not a typo: these pillows are colored and shaped like poo.

You never know what will work until you try it out—many times you’ll think about something, assume it won’t work, and move on to something else. Yet the Internet makes experimentation so cheap and so easily measurable that you should give all your ideas some time before you drop them. You never know what will bring you the next million!

3. Reviews work much better for affiliate sales than buttons, widgets, or advertisements.

In Darren’s 31 Days to a Better Blog book, the exercise for Day 28 is writing a review post that includes an affiliate link.

We’ve seen this approach work much better, as far as conversions are concerned, than advertisements, widgets, or buttons on your website. You may drive a lot more traffic to your sales page using buttons, but contextual links in reviews have much better conversion rates.

4. Think of your customer service as your product.

If we see a merchant who offers first-rate customer service, we know that they’re going to be big. There’s so much commoditization in so many industries that it becomes difficult for customers to choose between products, and for merchants to be heard. Great customer service is something that easily cuts through this clutter.

Sometimes people will buy your product just because they know that you will pick up their call or answer their emails. When you put customer service on the same pedestal as your core product, you will see an attitude shift in the way you deal with your customers, and also the way they see you.

5. Don’t lose your customer at the last step.

One of our core mantras is to make our product as easy to use as possible, and we see a lot of other successful merchants do that too.

There are two key ways of doing this: simplify your product, and provide as much detailed documentation as you can on how to use it.

While there are limits to simplifying the product, you can always provide a great amount of detail on how to use your product, or how to become your affiliate.

Leo Babauta’s step-by-step directions on what to do when you want to join Zen Habits as an affiliate are a great example of what I’m talking about.

A user can walk through that whole process without any confusion, and providing such great detail can vastly improve your conversion rates. You really don’t want to lose your customer at the last step just because your instructions weren’t clear. It’s so hard to get people’s attention, and convince them to try your product. Don’t let them fail to sign up just because they can’t understand the directions on your site—that’s the last thing you want to happen.

You don’t need to be a rocket scientist to figure out any of this stuff—it all makes so sense when you think about it.
The reason why affiliates and merchants fail to follow this advice isn’t because it’s hard to figure, but because execution is difficult. Doing the right thing, day in and day out, over and over for years, is what makes the difference between generating a six-figure income online, and the rest of the blogosphere.

Keep these best practices in mind—but also focus on executing them as much as you can. What tips can you add to this list?

E-junkie.com is a hosted shopping cart and digital service that lets you sell just about anything on your website, blog or social network. Our mission is to lower the barrier of entry in online selling. Our blog is about small business, e-commerce, self publishing and all the awesomeness in them. Follow us on Twitter, Facebook or

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