Because this figure is a mere statistical average (i.e. an arithmetical means), real life turnover data for about 95-97% of all affiliates tends to be even worse than that.

Obviously your mileage may vary, and this article is not intended to discourage anyone from participating in affiliate programs pertinent to their web site's focus. There's no denying that affiliate programs are gaining in importance in overall e-commerce efforts, with ever more companies, large and small, jumping on the wagon to expand their sales force base at minimum cost.

Still, looking beyond the ubiquitous hype surrounding affiliate programs these days is in good order: because unless you choose your partners wisely, you may actually lose quite a bit of money by signing up and dedicating resources to such programs which might be better and more efficiently employed elsewhere.

Your Time

Let's be conservative in our estimates concerning the actual time spent in locating, checking out and signing up for affiliate programs, download of graphics and/or link boxes, etc., plus the inevitable double checking of sales stats, traffic logs, accessibility, and more.

Here's one suggested format to go by. We will assume for simplicity's sake that you have signed up for 20 affiliate programs, with each of them indeed making you the statistical average of $50 a year.

This could result in the following overhead:

• If it takes you say, one hour per week to check out your 20 affiliate programs' online stats, that's a full 52 hours a year;
• Add another approximately. 20 hours per year to install, encode and adjust affiliate links on your web pages, download new graphics and follow their newsletters, check out and implement new offers, etc.;
• Add another estimated 20 hours per year answering email inquiries about affiliate products and services: even if you refer your leads to your partners' sites in the end, people may (and usually will) ask you about your personal experience with a given product or service; they may have technical questions ranging from ordering procedures to the reliability of your partners; this being personalized email, you can't simply turn people over to some brain dead auto responder program.

Time total: 92 hours/yr. or 4.6 hours per affiliate program seems a realistic if somewhat conservative estimate.

Your Money

Even though signups may be free, you will still have some serious financial overhead to take into consideration.

• Tracking software: you will require this to counter check on your affiliation partner's traffic and sales stats. While you may easily get a tracking program for free if used on private web sites, commercial sites such as yours are another matter, so you will have to register it for, say, $50. Installation, modification, checking procedures and updates may very well eat up another $50 (a rather optimistic estimate).
• Affiliate programs related telecommunication and online charges may range from $0 to $200 a year or more, depending on your location and tariffs, but let's assume a very conservative estimate of only $40 per year for all 20 programs combined.
• Affiliate programs related web space and bandwidth charges will, it is assumed here, amount to approximately $20 per year for all 20 programs consolidated.

Costs total: $160/yr. (The first time acquisition fee for your tracking software can, of course, be deducted from the following years' overhead.)

So what does this boil down to? Assuming the statistically perfect world, a total of $1,000 in revenues less cost of $160 leaves us with $860 in net profit before taxes. For this, you will have worked 80 hours as expounded above, which gives you a net average of $9.35 per hour. So you'll actually be slaving away for less than $10 an hour! On the condition, let it be repeated, that you will actually make those statistically defined 50 bucks per program, which in itself seems very doubtful.

Again, the purpose of this article is not to knock affiliate programs. But what our analysis does go to show is that:

1) there's no need to hold your breath regarding the money you'll be making from them;

2) it will only pay off to work with affiliate programs if you stay in focus.

Don't be indiscriminate! If you're selling apple carts online, affiliate partnerships offering apple peelers may seem relevant enough to your site's specific clientele to make you a few nice bucks on the side. On the other hand, promotion of diapers, cheap Caribbean tours and web site translation programs will obviously not. So stay focused - less is more in this case.

Also, people don't appreciate being inundated with promotional material anymore (if they ever did) - so you may actually make more money by presenting a web site with sparse ads for your affiliate programs if only by contrast with competitors' setups where people are still being hammered with scores of irrelevant banner ads documenting mere greed in lieu of genuine concern for visitors' specific needs and requirements.