In response to reader comments I wanted to continue the theme of affiliate marketing and this time look at how such schemes are constructed.
As an example, it was pretty easy to find out how Affiliate Junktion makes most of its money, by getting a commission from the web hosting company either omnis or ipower. when people sign up to host the web site that the Affiliate company supplies their members. Many of the more techno savvy (my name ain't tekno_boy for nothing) can see that it wouldn't be too hard to construct such a scheme yourself.
Lets take a look at the pieces of the puzzle shall we?
First, any successful Affiliate program will need to get your email address to send you their "important" information. They present you with an 'opt in' form which is attached to an autoresponder (like the one from aweber). In layman's terms they get you to choose to subscribe to emails which they periodically and automatically send. The first of these simply confirms you were the one asking for the information (in case someone else put your email in without your consent).
After you've confirmed that, your affiliate program will send you further instructions.
After you've joined the Affiliate marketing service's subscription. They will entice you to take some kind of action that generates income for them.
In the case of Affiliate Junktion, they offer a free web site and require you to join a hosting service (ipower) for which they will get a commission. Once you've signed up (and they've confirmed this) they send you a website with an affiliate link which allows Affiliate Junktion (or you Affiliate marketing program of choice) to recognize when visitors arrive at their site through your links. If these visitors sign up, you get a commission.
The system many use (like Affiliate Junktion) is Post Affiliate Pro. Post Affiliate Pro is a php driven affiliate marketing system, allowing your affiliates to track commission sales manage their affiliate accounts. Post Affiliate Pro is not just for money making affiliate schemes like Affiliate Junktion, its also a useful tool for promotion of all sorts of products online.
Those are the basic three ingredients of money making Affiliate programs. Again here is a summary:
An autoresonder for aweber allows people to “opt-in” to your subscriptions service.
The first email to all subscribers tells them to sign up at either omnis or ipower and forward thet welcome email for confirmation (the commission rate -at time of writing- at ipower is US$100 per signup).
Post Affiliate Pro, allows the affiliate web site to track its customer commissions and lets affiliates manage their accounts.
With a little knowledge it seems reasonable that one could use these tools to build a site and “own” the Affiliate program not just join it.
Unfortunately It's not all that easy to do in reality, but for those who are willing to take the time to learn it's definitely not a rocket science.
One such example of this is www.utukan.com which uses those elements to offer people instructions on how to do it themselves. The difference is, they show people how to get the full commission from omnis/ipower and not just a couple of dollars (please also note that Affiliate Junktion advertises all payouts in NZ$ which makes it appear more attractive than it really is). The trade off for them (www.utukan.com), is they can't offer any guarantees or cash back, as they make no further income from those who sign up under their affiliates, nor will they get more money from future customers who sign up from an affiliate. Also because the instructions they offer 'give the game away' they are also a little more complicated and require a bit more time to complete. Affiliate Junktion has a simple system but the payouts are much much smaller.
The people at Affiliate Junktion and the like aren't silly. If you discovery the parts that make up their system and follow their links in order to make such a scheme yourself, they will get a commission on that as well.
Hope that help your understanding of how Affiliate schemes work. I certainly am enjoying the learning exercise and (although I have yet to break even) expect that this knowledge will ultimately serve me well.
The best advice I can offer people is to be very careful, take a look at affiliate marketing's programs, but don't be too quick to sign on the dotted line. Always be skeptical an do your research, only join when your sure you've gotten good independent advice and understand not only how you will make money, but also how the Affiliate marketing program makes money from you.