Choosing the best affiliate program

Are you a webmaster in need of additional income? Or are you planning to create an online business, but you still have no product to sell? If so, affiliate marketing may be the best solution to your problem.

With affiliate marketing, you need not worry about the products you have to sell. All you need is a site with enough content that is related to the products of online companies offering affiliate programs. By becoming a member of the affiliate programs, you can start earning money immediately!

Affiliate marketing is a business relationship established between a merchant and its affiliates. In affiliate marketing, an affiliate agrees to direct some traffic to the site of the merchant. If traffic is converted into some kind of action, like a visitor purchasing a product on the merchant's website or a visitor becoming a lead to the company, the person who directed the traffic will be compensated.

The compensation may take the form of a commission or percentage of sales for the sales generated or a predetermined fixed rate which is customarily detailed in the affiliate programs agreement.

Promising a host of benefits for both merchants and affiliates, affiliate marketing has become one of the most popular marketing methods online today. In fact, today almost all business or retail sites offers an affiliate program that anyone can join.

Most retailers motivate people to become members of their program by promising great benefits like large commissions, lifetime commissions, click through incomes and many other benefits. But would all these affiliate programs bring off the same benefits?

Most programs that pay you, as an affiliate, a commission at once for every sale or lead you brought to the merchant's website. Commissions for this type of affiliate programs are usually large, ranging from 15% to a high of about 60%. Other affiliate programs that pay a fixed fee for every click through or traffic you send to the merchant's website.

Programs like this often pay a small fee per click through, usually not getting any bigger than half a dollar. The good thing about this type of program, however, is that the visitor does not have to buy anything for the affiliate to qualify.

Another type of affiliate program is a residual sales affiliate program. Residual affiliate programs usually pay only a small percentage of the sales commission for every sale directed by the affiliate merchant's site. This commission often comes only in the range of 10 - 20% of the sales. Because of this, many people ignore residual affiliate program and prefers to opt for affiliate program paying a high one-time commissions.

While residual affiliate programs actually pay a lower rate, merchants offering such programs generally pay regular and ongoing commissions for a single affiliate initiated sale for the life of the customer!

Suppose there are two online merchants both offering web hosting services on their sites. The first merchant offers a one-time commission type affiliate program that pays $80 for every single affiliate initiated sale. The second merchant also offers an affiliate program, but this time a residual affiliate program that pays only $10 for every single affiliate initiated sale.

Most affiliates would opt for the $80 over the $10, but may be passing up the opportunity to make more money over the lifetime of the customer, given that every time the customer renews their hosting the affiliate is credited with another sale.

Then is the residual affiliate program the one you should always opt for? I shy away from using terms like 'always' but it is something you definitely want to consider. In those circumstances, you have to look at what commodity or service is being sold, and how likely is the customer to stay a customer.

The key is to find yourself a niche or a company you can identify with, trust, and fits your personality best.