Sorry guys… For two weeks I did not update this blog. I was busy with my college’s final exam and now it’s over!

I’ll continue with the Big 6 Online Business Model topic and today we’ll discuss about affiliate marketing.  Affiliate marketing is one of the most lucrative models on the  Internet. You can promote other people’s product and get commissions for your efforts without seeing a single customer or talking to anyone.

But Dennis, what are the strengths, weaknesses, opportunities and threats for this business model? Just read on, and you’ll find out…

Strengths: You don’t even need a domain name or website in some cases. You can earn huge commissions from up to 50% to even 100% commissions! You don’t need to focus on creating products - just drive traffic to the merchant site and watch your income roll in (if you do it right of course).

Weaknesses: You will need to search for a good affiliate program and build up traffic in order to see results.

Opportunities: There are unlimited opportunities because there are always new products coming out each day and affiliates are needed everywhere!

Threats: You are competing against THOUSANDS of affiliates out there and those affiliates are your competitors. Some programs even offer two-tier program and established affiliates probably have dozens of affiliates under them as well.

Recommended Resources:

1. Register as an affiliate at Commission Junction, ClickBank, PayDotCom or/and Amazon. Find good products to promote! By the way, it’s all free!
2. If you’re new to affiliate marketing, you should try out Clickbank Profit Machine by Dylan Loh! This is a step-by-step program designed for newbies and intermediate marketers where you will learn how to make massive money from ClickBank - Sounds hyped, but seriously you need to check it out yourself

That’s all for today! I hope you’ve learned something from this article today. In coming update, I’ll discuss with you on the third online business model, Online Network Marketing - also known as Multilevel Marketing or MLM.

If you have something to add or comment about affiliate marketing model, please leave your comment below.

Talk to you soon!

If you have a choice to choose either high conversion rate or high commission payout affiliate program? Which one will you choose?

If me, I’d say depends. Let’s do some calculation.

Right now you’ve product A and product B to promote as an affiliate. One is giving you 40% commission and another one is 75%. Both are $47 product.

Product A: 40% = $18.80/sale

Product B: 75% = $30.00/sale

Yeah. Definitely you want to promote product B, me too. Anyhow, you’re going to put the same amount of effort to promote the affiliate products. So, might as well choose the product B as it pays higher.

But what if the product B comes with lousy sales page and converts at only 2%? In contrast, product A has a powerful sales page and converting at 5%. Here we talk about the conversion rate.

If you’re new to the affiliate marketing, conversion rate is the ratio of orders to site visits. For example, you have 100 people visit your site, and 2 people place orders, means that your conversion rate is 2 percent. Simple math right?

OK. Assume that you have directed 100 visitors to product A and product B. Product A is converting at 5 percent which brought you 5 sales, while product B is converting at 2 percent which brought you 2 sales. So, how much you earned for each product? Let’s do some calculation again.

Product A = 5 sales x $18.80 = $94 earned

Product B = 2 sales x $30.00 = $60 earned

Which product are you going to promote if in this case? The answer is clear. I bet you’ll prefer to promote product A more than B even though product B give you a higher commission payout.

As an affiliate marketer, no matter which products you’re promoting, you’re going to put the same amount of efforts to promote them. So, why don’t choose a product that worth your time? And of course if can, choose a product that gives you high commission rate while, the sales letter conversion rate remain high.

Love this post? I’m looking forward to your comment and suggestion. Probably you have one or two ideas to add in?