The last craft business basics article looked at the profit potential of other people's affiliate programs. This time we'll look at how you can increase your income by running your own.
Having affiliates for your online craft business is like having an extra sales force. They will reach people that you would never come into contact with. They can multiply your profits many times over.
It isn't difficult to implement an affiliate program either. Although most of us get a bit concerned about adding extra code to our craft websites and you might imagine the management could be quite difficult, we are fortunately offered an easy way out. For a small percentage, someone will manage most of it for us!
There are a huge number of software packages that you can install yourself to run your affiliate program, there are companies online who will manage it for you (although you need to be doing quite good business to make this affordable) or there are shopping carts that incorporate the ability to run an affiliate program alongside your sales. They vary in their ease of implementation but if you build your own website you should be able to handle it. If you didn't, then you'll need to get back to the person who did. That will obviously cost you a few dollars but it's probably worth it in the long run.
The affiliate program you run in your craft business should be appropriate to the goods you sell. Some will only work with eBooks and downloadable patterns, some will work with "real" products and some work for both. You'll need to spend some time evaluating each before you choose the one that's right for you. If you aren't sure, ask lots of awkward questions and see who gets back to you promptly and with decent answers!
The question which most craft business owners ask is how much should they pay their affiliates? The answer is as much as you can afford. It has to be worth the affiliates time and effort or nobody will be interested. On digital goods it's usually between 25 and 50% - and it can go higher. You might think that's a lot but think about it for a moment. Once your digital product is finished there are no production or distribution costs so why not make it as attractive as possible to your affiliates?
For real goods, affiliate payments are usually in the region of 5 to 15%. You have to think harder about your profit margin here. Remember, you never pay an affiliate until a product has been sold and you have been paid, so if you have to give away half of your profit margin but you make five or six times as many sales, it's probably worth it.
Of course there are no guarantees, and adding an affiliate program to a craft business isn't for everyone. There is great potential but there is also some investigative work to do beforehand and some ongoing management. You might get many people join your program but few will actually put in a lot of effort. 90% or your payments will go to 10% or less of your affiliates. Nevertheless, it gives you the chance to reach many more customers for very little outlay.
Source : ezinearticles.com
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