QUESTION on How to Grow an Online Business Using Affiliates
I’m the sole owner of the web site www.DreamLingerieSite.com. The drop shipper is www.allureleather.com. I have so many expectations about the site. I’m promoting the site by Internet and by word of mouth. I would like to take this to the next level though, offering an opportunity FOR OTHERS to sell the products themselves by becoming a Lingerie Sales Representative. What do you recommend as my starting point? How can I grow my business using affiliates? How much investing I need? Could this be possible??
– Wanda L. Villegas
ANSWER by Isabel Isidro
Congratulations on having your own business. It will be an exciting time ahead of you, full of challenges that only entrepreneurship can bring.
If you are looking at letting other people sell for you, there are two ways for you to go about it:
1. Via the Web. In addition to your website, you can sell your products through the websites of other people. This is called an affiliate program, where you allow other site owners to sell your products in exchange for a commission from the sale. This basically works by:
- Select key websites for your affiliate program – the best candidates are the ones that reaches the desired target audiences for your products.
- Choose the best approach for managing your affiliate program. You can run your own affiliate program using your own affiliate software (or buying one for you) or you can use a third party service that will manage the whole process for a fee (they will handle everything from choosing the right candidates to tracking the sales to processing payments). Amazon.com run its own affiliate program called Amazon Associates, while companies such as Dell or Yahoo pays Commission Junction to manage their programs for them. Other networks you can check include Shareasale , MPORT and LinkConnector
- Find the right affiliate program software. There are a number of affiliate program software on the market today, such as KowaBunga http://www.myaffiliateprogram.com , which is a proven affiliate tracking and magagement solution. Others to consider include iDevAffiliate http://www.idevdirect.com and AffiliateShop http://www.affiliateshop.com , among others. The right software program is critical because trust of your affiliates depend on how well you are able to track their sales or referrals and your calculation of commissions.
2. Via physical distribution. You can also choose to hire sales representatives for your products, similar to Avoid, Mary Kay and other such opportunities. There are a number of factors to consider when you start hiring sales representatives for your business:
- Analyze if you can afford to hire a sales representative now. The first question you need to be asking is whether you have the budget to hire a sales representative now.
- Determine the sales process. When the sales representatives go out, will they have actual products on hand – which means you need to buy them first from your dropshipper and pay for these products? What will be the way wherein you minimize inventory purchase when dealing with sales representatives? How will order and fulfillment be done?
- Think about the best way to present and sell your products. You will be providing the sales reps with detailed instructions on how to sell your products. Should the products be sold in a party setting? Should it be sold on a one-on-one basis? Then prepare your sales manuals and detailed instructions.
- Decide on the compensation structure for your sales representatives. You can use a combination of salary and commissions or salary plus bonus. Commissions usually are based on the amount of sales, whereas bonuses may depend on individual performance, on the performance of all sales workers in the group or district, or on the company’s performance. An attractive compensation package can attract the right type of sales representatives your company.
- Find the right sales representatives. The right representatives can make or break your company. You need to start thinking about your hiring process – what types of candidates you need to look for, what skill sets they need to possess, and where you can find them. Your sales reps must have good skills in prospecting, presenting and closing the sales. They should be motivated and hungry to sell more and more of your products.
- Be ready to train the sales representatives. You cannot just tell your sales reps to go out and start selling. You need to help them run through the sales process detailing how best to sell your products. A sales process defines the steps necessary to successfully close a sale, from cold calling to closing, and of course, the customer retention strategy that follows a sale. Give them the spiels they need; it is important that your sales reps are informed and knowledgeable about your products.
- Find the right candidates for your sales positions. Do not settle for mediocre sales representatives. Ask for referrals from friends, family and acquaintances, particularly those who have had similar selling experiences. Advertise in appropriate publications and websites, such as Craigslist and other local publications.
- Create a sales tracking and performance monitoring system. Use technology to help you track the performance of your sales representatives. Check out Customer Relationship Management (CRM) systems to help you understand the effectiveness of your sales representatives, as well as help the sales representatives become more efficient. Examples of CRM for small businesses are Salesforce.com and Microsoft Dynamics CRM Online
- Make your long-term plans. If having sales representative is the best option for you, you need to start thinking of the long terms plans for your business. How many sales representatives do you want? Will you need a sales manager? What geographical areas do you want to be covered? How will you expand to other geographical areas?
The next step is to decide on the approach you’d like to take, given the needs and requirements of the two approaches I’ve outlined above. Check your resources — your money, time, and skills — and determine which of the two above would be most feasible for you.
Recommended Books on Growing an Online Business and Affiliate Program Marketing:
- Affiliate Program Management: An Hour a Day
- A Practical Guide to Affiliate Marketing: Quick Reference for Affiliate Managers & Merchants
- The Complete Guide to Affiliate Marketing on the Web: How to Use and Profit from Affiliate Marketing Programs
- E-commerce Get It Right! Essential Step-by-Step Guide for Selling & Marketing Products Online. Insider Secrets, Key Strategies & Practical Tips – Simplified for Start-Ups & Small Businesses
Article originally published April 2008. Updated on January 20, 2012
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- Making Money with Affiliate Programs: What to Watch Out For