you have chosen to use a two-tier commission structure, automatically approving everyone who applies to join. What have you found to be the advantages and disadvantages of such a system?
I find absolutely no disadvantages to this system. Let me share why.
I believe the Internet can empower small businesses to succeed. In my 13 years of business, I have never seen anything so powerful and easy to use as affiliate programs.
For an industry in its infancy, many affiliate programs are showing arrogance. Big companies sign up thousands of affiliates and really don't care if they do anything at all! The waste is incredible and to me, undermines the democratic power of e-commerce.
My mission is to create ActiveAffiliates, who build their own long term business through their own network. If each affiliate would simply target 250-500 sites that they work closely with, the economic power is exponential...because out of those sites, it is likely that a small percentage will yield results.
That small percentage can be the difference between life and death for a small business online.
This is one of the primary reasons I demanded a two tier system. I want the small affiliates, as well as the big ones, to benefit and build their own networks.
Of course I receive numerous emails with confusion on how to place links, how to get going, and trying to make sense of this brave, new Internet. To me, that is part of the joy, not a burden.
It really is a state of mind; the minute you think your affiliates, and your customers, are a burden, you should give it up. If I can help just one person make a difference in their lives, generate a bit more money, or even more importantly, a bit more time to do the things they like, that makes it worthwhile.
This system is designed to help people help themselves...to learn, adapt, and be amazed. Instead of signing up and leaving them alone, I try to send training. Like any teacher, I try to show the beginner how to set realistic goals and test them, in a market that offers little if any start up cost.
If my purpose was to just sell books, I would limit my membership. But by opening it up, I've tapped into people who are working hard to take advantage of what the Internet offers.
My background in training shows me that anyone, given a bit of encouragement and guidance, can improve.
I have a passion for empowering people to succeed. Two tier programs are really where affiliate networks build long term businesses.
In the affiliate industry today, people are getting rejected daily. Even when they sign up for a program, they rarely if ever hear from that network again. A token ezine a month later is often the best effort.
Signing up thousands of affiliates is not a burden to me; if it is, you shouldn't be in this business. The chance to help someone realize their goals, whether it is just breaking even, making a side income, or hitting the jackpot with carefully selected programs, is simply amazing.
A two tier program is one of the most realistic ways for someone to start building their own network, within the bigger, more powerful affiliate programs.
These programs will likely be limited to those companies who have the margins to offer them. Remember that a company with 10% margins on a book won't be able to break that down to a two tier program.
For certain things, it works. For other products, it doesn't make sense. For our ActiveAffiliates, it makes total sense.
For me, the advantage of a two tier system is that I can help people learn, and earn. I remember and still believe in the dream of the Internet. I've seen people who didn't even have a computer at first generate tremendous results.
My two tier system is a belief in that spirit, and something that brings me joy far beyond anything money can deliver...
Two tier systems are the real opportunity for affiliates, because they allow them to form their own networks, their own relationships, their own foundations. Being part of this is incredibly fun.
2. What percentage of webmasters are achieving sales? Is the old 80/20 rule applying?
First, from what I have seen of affiliate programs, the 97/3 rule applies; only about 3% generate anything. And that's sad, in fact you are lucky if 50% of your affiliates even post one ad on their site! Really, how many times have you seen a network with thousands of affiliates, and only 10 making any sales? Remember that this is our initial test, and in that we have 15% of our initial affiliates who will receive a check.
From what I've seen, that is a huge percentage, and much of it comes from the second tier. My goal is to keep training and honing that, and working closely with my ActiveAffiliates who generate significant traffic and sales.
For those who are not, we have patience and will keep encouraging them. Most entrepreneurs either quit too early or stay too long with an idea. The key is to keep your goals realistic, and to check your progress each month.
Again, some people may take months to make a sale, but I'm willing to work with them. That is how much I believe in what we are doing here...I have no illusions that I can change the nature of people or affiliate networks, but I will do my best to support my part of it...and encourage people to succeed, no matter what they are doing.
3. How large is the potential market. How many copies do you think will be sold?
The potential market is any Web Site who wants to offer affiliate products from their site, or in addition to what they already offer. It is virtually limitless; in fact, the biggest problem with affiliate networks is that people don't really know about them. The lack of understanding is incredible!
We're here to inform, educate, and spread the word. I see this book as showing people what is going on, referring to the excellent sites that can help them learn more like yours, and starting from the bottom up, from the thousands of Web Sites out there that do not understand how to convert Web visitors to sales.
My goal for copies is simple, and a dream; I'd like to share the empowering message of this book with anyone who has a Web Site. My somewhat lofty goal is the reach that Cory Rudl's book, Car Secrets, achieved; perhaps not that volume, but I'd like to see this get 10-20,000 copies out there.
The best part of this goal is, even if I don't reach it, the more people I teach, the more comes back to me. I really believe in the abundance of the Internet and the success of this book is dependent on our two tier program, on our affiliates.
I have a passion for teaching; where else could I find so many amazing, energetic learners, who teach me as well?
4. How much time and money does maintaining a two-tier program like yours involve?
Wow, what a question; I've been going 24/7 and adding staff the past month like crazy. It took us months to create our own two tier program, that we must keep improving. Our emails are piling up and I'm focusing on customer service.
With this abundance comes some amazing opportunities; we just brought on Paul Galloway as our inside programmer with our system. I've been such a fan of Paul's work and having him spearhead the technical/marketing end is amazing. Patrick Anderson is another partner who teaches me everyday the simplest way to get things done.
Remember that our vision is far beyond this two tier program; we are creating a system of success and honing it every day. That is the best part, sharing the information with people and seeing these networks get started.
We want to empower affiliates to sell more and build their own networks. My ultimate goal is to do for affiliate networks what LinkExchange did with banner ads, but with a twist.
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