Friday, August 20, 2010

The ins and outs of affiliate marketing

This week I'm over at Work It, Mom!, writing about the different types of work-from-home programs and how they operate. For parents who want to earn money and build a business without sacrificing too much family time, direct-marketing programs seem ideal. But with so many to choose from, how do you know which one will work for you -- and which ones might not work at all?

Nancy Traversy co-founded Barefoot Books in her home in London when her oldest daughter, now 18, was just 3 weeks old. "I think I was lucky because I was working from home, so I managed to have four children in five years and I worked from home the whole time," she said in an interview. "My kids were always in the office, when they were little they'd be going to bed and have their bath and then they'd scamper up into the office and we'd be doing a mailing and my 2-year-old would be sitting on someone's lap sticking stamps on or stuffing envelopes."

Maybe that's why the Barefoot Books ambassador program is so well-suited to parents who are juggling work and family. "The whole idea of grassroots and small and community and getting back to basics and the importance of connecting with your children and parenting is certainly on everyone's minds now in a way I don't think it was 10 years ago, or even five years ago," Traversy points out. "I think that our business model, which is grassroots, and through our ambassador program, you can give people a way to make their money but also stay connected with their families."

There are several different types of affiliate programs, but most of them fall into two main categories: network marketing and direct marketing. In network marketing -- also known as multi-level marketing, MLM, consumer direct marketing, and referral marketing -- when you make a sale the available profit is shared between you and your “upline” (the sales associates who got into the business before you). The more people in line above you, the more money you have to pass up the line. In order to boost your own income, you have to recruit people into your “downline”; you are responsible for training and motivating these new recruits, and, since you are now part of their "upline," they have to share their profits with you. If you're not up for constantly recruiting people, multi-level marketing is definitely not for you.

With the direct sales business model, however, all of the available profit from a sale goes to the person who made the sale. No uplines, no downlines, more flexibility, and -- potentially -- more profits. (Check out another one of my Work It, Mom! references, a list of 12 popular direct-sales marketing programs.)

Barefoot Books pulled out of the big-box stores years ago; their new flagship store in Concord, Massachusetts, sells only Barefoot Books titles. But business is thriving, thanks in large part to their company's earth-friendly and family-friendly business ethic and their commitment to their ambassador community. The company allows its ambassadors to establish their own online book stores and encourages them to sell their inventory at farmers markets, school fundraisers, and home-based parties -- tactics the co-founders are familiar with, since they started marketing their company at a grassroots level.

"When we lived in London, I did art exhibitions and story tellers and events," Traversy said. "We did arts and crafts workshops and sold original art from our books. We did all the farmers markets and did consumer-based fairs."

Interested in adding to your income by joining an affiliate program? Here are a few questions to ask:
  1. Do you have to meet a specific sales quota per month?
  2. Do you have to purchase and store inventory in advance?
  3. Does the company provide samples, catalogs, and promotional materials, or do you have to purchase them separately?
  4. Can you establish your own sales presence anywhere you like (online, in your home, or in your local community)?
  5. What kind of training and support does the company provide?
  6. How are the profits shared?
  7. How (and how often) are payments processed?

 Above all, make sure the company you choose offers products that you'd buy yourself. "What fascinates me is the commonalities between the type of people who buy Barefoot," Traversy pointed out. "I think that they are the type of people who live Barefoot's values all over the world, and now with the power of technology and social networks and digital media, we're bringing our books to life."



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