The options and variety of affiliate programs available to webmasters is growing rapidly. From niche products and services, right up to the big money items like pharmaceuticals and online casinos, online merchants are getting smarter, and are beginning to understand that affiliate programs can be the main focus of their marketing efforts.
Here we present some valuable information to arm the common webmaster. Tips and tricks you must be aware of when dealing with affiliate program managers and the subtleties of their program.
Rule number one is to always read the fine print. In fact, it's more than that, it's understanding the fine print and how it affects your profit potential with the program. This is a big area of concern, as many programs hide vital information that relate directly to your profit in their fine print.
As an example, consider the Amazon.com affiliate program. When you send someone from your site to a book page on Amazon, you have the potential to earn 15% of the sale. Now, for some reason, Amazon's affiliate programs dictate that if that visitor comes to a book page from a link on your site, but then decides to browse another page on Amazon.com only then to return to the original page and make a purchase, you are no longer entitled to 15%, but only earn 5%. Why is this? I couldn't tell you their reasoning for the life of me, except to let you know, they are in the business of keeping their money.
The fine print is fine for a reason, and that reason is they don't want you to read it, while they make it seem as though that reason is because what's printed there is not important, just technicalities, just details. You have to be smarter than them, and not allow yourself to be beaten by technicalities.
One of the largest areas of concern for the casino gambling affiliates, which are a very profitable bunch, is that of loss carry over. In many affiliate industries when you get a customer it guarantees profit, albeit limited in volume. You're going to get a set percentage of a set price. When you send a gambler to an online casino, the profit potential is unlimited, and it also introduces the concept of loss. A gambler can win money from the casino, but your profits are defined by how much the gambler loses to the casino. If the gambler wins then, your affiliate account is in the red. You don't have any profit, you have the opposite, you have loss.
Of course, you don't have to pay the affiliate program for the loss incurred. But at the same time, you can't make a profit until your balance is back above zero. Picture it like this, you sign up for a casino affiliate program, and you get them 10 new players. 9 of those players lose one thousand dollars each to the casino, for a total loss of 9000 dollars. Your tenth player, however, wins a ten thousand dollar jackpot. Where do you stand? You stand 1000 dollars in the hole, and you make no profit from the affiliate program overall. To start gaining profit again your player losses as a total have to surpass your players wins. Fortunately, since it's a casino, this is the more likely scenario.
The fine print, however, applies here quite heavily. Some casino affiliate programs carry forward you loss from month to month, while others don't. This means, if you were 1000 dollars in 'debt' at casino A, when the first of the month comes along, you don't get a cheque because you had debt not profit, and starting from there you still have to produce more than 1000 dollars of profit to get you back into a position where you're making money. At casino B though, where they don't carry loss forward, at the beginning of the month if you had a negative balance, your balance is automatically reset to zero, and you will be making money off of the first profit you produce again.
This is a very significant difference between two programs. Imagine if one of your players won a hundred thousand dollar jackpot. You may as well cancel your account with them and not bother, but with a no-loss-carry-forward affiliate program, you'd be fine as of the first of the month, reset back to zero and ready to earn again.