Affiliate Marketing is a great way to make money online from websites. If you don't have any idea about affiliate marketing, first get an idea of the concept by reading this guide - What is Affiliate marketing.
The very first thing you need to make money via affiliate marketing is a website. The whole concept of making money via affiliate marketing revolves around having a website with lots of traffic/visitors and referring those visitors to mainstream e-commerce websites like Amazon, HomeDepot, WalMart etc. When visitors from your website reaches Amazon (or Walmart or other websites you refer) and makes a purchase, you get commission as a percentage of the sale value.
Lets first see a classic example of website making money with Affiliate Program. There are lots of different websites making money with different types of affiliate programs. In this article, we are exploring websites that make money with Amazon Affiliate Program. Out of many websites I have analyzed, InductionTop is a classic example of website making money with Amazon Affiliate Program. The website basically provides unbiased reviews of Induction Cooktops of various types. People visit the website to read reviews of induction cooktops to inform themselves before making the purchase. If you observe an individual review page of the website - say Duxtop 1800Watt Portable Induction CookTop - you can see hyperlinks referring to the Amazon product page of Duxtop Induction Cooktop from the review page. Each of these links to Amazon product page has a referral ID/tag (tag=inductiontop-20) - which is used to identify the referring website. People visiting the Amazon product pages with this referral link from InductionTop will get a cookie set in their browsers for a definite period (say 24 hours). If the visitor makes the purchase within 24 hours of referral link click, you will get the commission for the sale credited in your Amazon account.
I hope you have got a good basic idea of how making money with amazon affiliate program works. For each referral sale you make, you will get commission which may range from 4% to 10% or higher as defined by the Amazon for specific product categories and number of referral sales you make. There are plenty of people who make thousands of dollars per month from Amazon Affiliate Program.
I am noting down the essentials you need to get started!
- Domain Name
- Website Hosting
- Selecting the Product Niche
- Good Articles and Contents
- Adding Referral Links to Amazon
- Building Traffic
- Developing the Website as a Useful Resource
Selecting the "right" Product Niche
Selecting the right product niche is very very important in getting successful with Amazon Affiliate Program. A niche or a product category can be selected based on various criteria. Most important criteria is based on Product Value and Expected Sales Volume.
I am listing two commonly used strategies below:
- High Value Products with Low Sales Volume
- Low Value Products with High Sales Volume
The idea behind these 2 strategies can be explained. A high value product in the range of 100USD or higher can yield a commission of 5 to 7 USD per sale. A low value product in the range of 20 or 30 USD generates only 1 or 1.5USD per sale as commission. For a high value product 20 sales is enough to generate 100USD in commission revenue whereas 100 sales is necessary in a Low Value Product segment to generate the same 100 USD commission revenue. The difference in sales volume required is 5 times - which is a very very significant figure. Lets check why the difference of 5x sales volume is very significant.
I am going to present a set of assumed data. Usually to generate 20 sales, you need to send as much as 500 product link clicks or more. The sales conversion rates from total number of product link clicks to Amazon can vary from 1% to 10% or higher. It totally depends on your organic search traffic, your click rate etc. So to generate 100 sales, you need to send 5 times of product link clicks - which is nearly 2500+ product link clicks or higher. Not everyone who visits your website will click on the product links. Only a certain percentage of the total visitors in your website will click on the product links, which may also vary from 5% to 25% (varies from site to site and niche to niche). So your website needs to have nearly 4 to 5 times traffic to achieve 5 times increase in sales volume.