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Affiliate marketing is advertising for someone else in exchange for a cut of the sales you generate. You're sharing your traffic for a price. It's a great way to capitalize on the traffic your web site's already producing.

An Affiliate's Perspective
If you run a small, home-based E-Biz, you can join an affiliate program and get paid to share your traffic with another merchant. You'll want to look for sites that tie in with yours ' things your customer base will be interested in. Choose sites whose products are complementary to yours without overlapping.

Before you join any affiliate program, look closely at the merchant you'll be promoting. Find out if they have an affiliate earnings history ' can they prove their site converts at a specific rate? Do they have an affiliate manager you can talk to about your marketing efforts and any problems you have? Is their program well-established? You want to make sure they're honest and will pay you for the conversions you bring them.

As an affiliate, your goal is to make customers want to buy their product, then pass the customers along so the merchant can complete the sale. Don't just paste a link to a merchant's web page and expect it to magically produce sales ' tell your customers what makes their product better than other similar products. According to Jonathan Miller, of http://Team-Affiliate.com, 'The sites that do better are the ones that select one or two offers, tell people why they recommend these particular offers, and then provide them with a link.'

A Merchant's Perspective
You can also increase your own web site traffic by paying a commission to other merchants to bring you leads. As a merchant, you should scrutinize the affiliates who advertise for you. You're attaching your brand to their web site, so look at their reputation ' are they someone you want to be associated with? Also look at their relevance to your target market ' are they someone that will drive the right kind of traffic?

There are various software programs that track visitors when they leave your affiliates' web sites and click through to your site. If they convert to a sale, you pay a commission to the affiliate that referred them. You can track your visitors in two different ways, and each has its own advantages:

' You can purchase stand alone tracking software, like My Affiliate Program, and integrate it into your site. You decide what you can afford to pay marketers to promote you and make offers based on your budget.

' You can join an affiliate network, such as LinkShare or Kolimbo. This is a more costly route because the network determines the commission percentage you pay, but they also bring you offers from the inside and give you access to their pool of affiliates.

Says Miller, 'It takes time and effort to deliver consistent results. But if you're willing, an affiliate program can be very lucrative for both affiliate marketer and merchant.'