Affiliate programs (also called Referral Programs or Partnership Programs) are essentially commission-based sales schemes. You recommend a site to your users and pick up a percentage of any sales those users generate. You benefit from the commission and the site benefits from sales it wouldn't otherwise have made. If you've ever gone to a website and seen links to Amazon, those were affiliate links.

You can run an affiliate program from a site you've already set up, or create a site specially to promote a product or service. As long as it brings in more cash than you spend on building it and buying traffic, you're laughing.

Affiliate ads work two ways: you can join them to make money, or you can run one to attract users.

Joining An Affiliate Program

As with any marketing venture, you need to be careful in the selection of an affiliate program. The benefit of an affiliate program is that it gives you another way to make money from your users. Instead of selling them a product yourself, you send them to a partner and take a cut.

On the downside though, your affiliate ads will take the place of a different ad that you could have put in that same spot. You have to make sure that each advertising position on your site is bringing in the maximum revenue possible. If you're not getting the most from your site, you're tossing money away.

The key to success is to choose the right program, right from the beginning.

Now, a lot of commercial sites run affiliate programs. That's because they know that they only have to pay a commission if a sale is actually made; it's a proven way to generate revenue without risk. What that means for you is that when it comes to choosing an affiliate program, you're going to have a huge range to choose from. What it all boils down to though is product and price.

While it might be tempting to go for the program that pays the highest commissions, the program won't pay you a penny if your users won't go there or won't buy once they get there. You have to be certain that the service you're promoting is of genuine interest to the kind of users you buy, whether you're buying them from search engines or anywhere else.

Sure, you can work backwards: You find a high-paying affiliate program and create a small site to send users to it, but do you know where to buy users for a program like that? You're going to have to research the field, check out the most popular sites, and negotiate banner campaigns and link exchanges.

That's fine if you want to invest the time and the effort. But it's much easier to find an affiliate program operating in a field you're familiar with, and use that program to earn extra cash.

For example, suppose you had set up a dating site. You might make bit of money selling subscriptions, but you might make even more by joining Match.com's affiliate program and selling them your users. Unless you're planning to be the Internet's biggest dating site, you're not going to be able to compete directly and beat them, but you can join them-and earn money.

Or rather than sell your users directly to a 'competitor', you can look for services that complement your own. Visitors to your dating site, for example, might be interested in buying flowers, books on relationships or tickets on singles cruises. Instead of selling just one product-membership subscriptions-you'd be selling a whole range of different goods to the same people, and increasing the sources of your income.

Here are some tips to selecting an affiliate program that is lucrative and right for you:

* Don't accept less than 25% commission. You can find affiliate programs with great payment structures and high percentages of the purchase price in just about every field.

* Look for comprehensive statistics pages that list the number of click-throughs, sales and earnings so you can see how you're doing. The information should be broken down by month.

* Look for programs that offer a wide variety of promotional tools to put on your Web page, including text links, banners and graphics.

* Find out how often you will be paid and make sure that the payment schedule meets your expectations. Some programs pay monthly, others quarterly; which is best for you?

* Look for examples of marketing methods that successful affiliates are using to get the best results.

* Make sure that top level support is given. If they can't answer your questions promptly and intelligently, you don't want to work with them.

Affiliate programs offer a viable solution to competing against larger competitors and still make money. As the saying goes, if you can't beat them, joint them! Until next time...

Best Regards,

Stephen Russell

Stephen Russell hails from Georgia, plays in an up and coming rock band, and creates liveable income streams using internet marketing.