Increase Sales Using Affiliate Marketing

Imagine having a sales team of 100 people for your small business that you only had to pay if they brought in more sales for your company. That’s exactly what you get with a team of affiliates working to drive sales of your product. In this episode Matt and Brandon teach you how to find affiliates to sell your product, and how to make money as an affiliate selling someone else’s product. Affiliate marketing is a great way of achieving higher sales, generating traffic to your site and getting your product to a larger audience. Find out how it can help your small business today.

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Links from the show:

• Amazon.com
• TheCamcorderReview.com
• Porchpotty.com
• Commission Junction
• Bit.ly
• Tiny URL
• Disclosurepolicy.org
• Volusion
• Paypal
• IDevAffiliate
• Post Affiliate Pro
• Google Affiliate Program
• Clickbank
• Linkshare
• Clix Galore
• Google Chrome
• Roboform
• Last Pass
• Shoeboxed.com
• Juice Plus

Transcript:

Welcome to Automate My Small Business where we show you how to set up and run your own automated business on the cheap. So get ready to take back your life and add a little spice. It’s time to build something automated.

MATT: Hello and welcome to episode #14 of Automate My Small Business. I’m Matt.

BRANDON: And this is Brandon.

MATT: And yeah it is 14. We are skipping 13 for the same reason there’s no 13 in any building you’re going to.

BRANDON: Just bad luck.

MATT: Just bad luck. So it’s 2010, brand new year. You had a great Christmas and vacation and you had sort of business trip to China, right?

BRANDON: Yeah, you know, so maybe some of you hard core followers of Automate My Small Business know we did a take a few weeks there to take some family time off and I did in fact do a little business trip also that got a little bit in the way but I went to China and also visited some of my VAs in the Philippines and my main objective in going to China was for two reasons: One is just to get a feel for the business environment and get an idea if it’s possible to do business directly and you know is it hard? Is it easy, you know, about whole thing and then secondly, you know, can I get my product cost down and you know up until now I’ve been manufacturing my Porch Potty product to here in the States and I was wanting to get my volume up and get my product cost down and I think I did that so I feel good about that and I learned a lot.

MATT: That’s awesome. So you’re in Hongkong and Shengen, right?

BRANDON: Yeah. There’s a lot of factories all throughout China but there’s a good number of them kind of all grouped together in Shengen which is just about an hour north of Hongkong so basically after my decision about going to China, which was only before two weeks before, I decided to Skype my VA who’s pretty much my full time assistant in the Philippines. I told her, “Look, we’re going to China. Get us appointments. Get us airline reservations and hotels,” an d she jumped on it. She was great. That was my virtual assistant out in the Philippines and since the Philippines is only about an hour flight to Hongkong, she’s almost basically local and she knows a little bit of the language so it was perfect. So when I got there, I got to meet her for the first time which was kind of a neat experience and spent some quality time with her and her husband actually who came along for the ride because they were finishing up a vacation for themselves but, boy, was it a treat to have somebody local, you know. She wasn’t Chinese but she was definitely closer to China than I am and she had a few friends in China. She lived in China for a year or two, I think.

MATT: So her Chinese is better than yours?

BRANDON: Absolutely and she wouldn’t say she’s fluent but she sure did a good job and what a great experience. If you do go to China or the Philippines and meet any of your VAs or do business over there, to have your own assistant with you full time to help translate and to help organize the trip, you know, it was kind of a neat way to travel because…

MATT: Yeah, I remember talking to you like two days before you go, I said, “Where are you going?” You’re like, “I don’t know. Belle’s got it all planned out.”

BRANDON: Yeah. It was really a weird experience and I have anything planned and just kind of relied on her to do everything so it was great though. I learned a lot. I guess the things I can bring back as learning lessons is that first of all there’s thousands of factories. You have your pick. Don’t worry about not finding somebody over there that does what you want and secondly, the business environment was very, very friendly. They were really easy to work with. They’re really out to please you, want your business. You’re the rare part of the equation so there’s a bunch of them and just one of you in many cases and so they’ll bend over backwards to get your business. So it’s really easy to get along with them, really easy to do business with them. There are some cultural differences of course, you know. The food of course is not ideal. They have some pretty exotic stuff.

MATT: Did you try the scorpions?

BRANDON: I didn’t try the scorpions nor did I get the chicken feet or the pork knuckles.

MATT: Oh, come on now, you’re not very adventurous.

BRANDON: So yeah but there was pretty weird stuff. I’ve never seen a seal penis before until I got there. I actually eat seal penis so that was a new one but no joke it was exotic but very cultural for sure.

MATT: I thought it was interesting what you’re saying about the different types of manufacturers there like the legitimate full scale ones and the basement people. You want to talk about that a little bit.

BRANDON: Yeah, you know one of the things that you go there for is to learn if the companies that you’re dealing with over e-mail and online are actually legitimate and as some of the insiders might tell you, “Hey, you have to be careful because these factories might sound like they got hundreds of employees and they’re very reputable and reliable but really in fact what they are is just a basement of machines and you know a lot of these Chinese who want to get on board the gravy train and make money like all these other big businesses are but they don’t have capital to put it in so they start small and they you know, a lot of them literally are at the basements so you know you want kind of go there, check out, make sure you get a tour of the factories, get an idea of what their capabilities if they really do have a staff that can handle your volume and scale up and all that.

MATT: The ghost factories. I thought that was interesting.

BRANDON: Yeah. It’s pretty much what I call them. They’re like ghost factories. In some cases, they’re not factories at all. They’re companies who pretend to be manufacturers on sites like Alibaba, which we’ve talked about in the past but what they really are is just a one man show that take the products or the business and you know basically brokers the deal, gets it to a factory that they may know and takes a cut off the deal. So you know, yeah, I guess it could turn out to be okay if that went your way but you never really want to have somebody in the middle if you can avoid it. So it was a good experience. You really get to learn a lot. I’d recommend it to anybody who wants to manufacture any of their own products or maybe even take an idea that they’ve seen here and you know make it better and cheaper by maybe outsourcing it to China or any other offshore, Mexico is good at it too. I found it really to be a great trip so it’s well worth doing and then I finished up the trip by going to the Philippines and meeting a lot of the people I’ve hired over the years doing a lot of my marketing and my writing and just a lot of my VAs that I’ve hired over there. I did that really just to become little bit closer to them. Get an idea of how they work, I might learn something about them that they didn’t realize and it was well worth the trip. So I got one day at the beach with them where we barbecued and grilled some hamburgers and they were blown away that you can even make your own and grill your own hamburgers. They always thought you have to have some sort of frozen patty and …

MATT: They only come from McDonalds, right?

BRANDON: They only come from McDonalds, yes, so when I grilled burgers they were just in awe like, “Oh my god, I can’t believe you’re making them by hand.” That was amazing. So yeah, it was a fun trip. I learned a lot. Yeah, I definitely recommend it to all of you out there. You know once you get to know a few of them over there and it’s time to make the trip, it’s a good time.

MATT: Yeah, I mean I remember how hard it was for me to trying to set up my relationship with manufacturer in China without going there and just trying to validate if they’re real business and getting you know business certificates and looking into hiring people to go validate that they’re really there and it was just a pain and going there makes it a lot easier, I think.

BRANDON: Yeah, it’s definitely worth doing once you get to establish relationships started.

MATT: Well, I didn’t have nearly as exciting of a trip as you. I had stayed around home and my family came out and spent some time with my wife and parents and its all family but I got a lot of time to work on some of the stuff that we’ve been talking about doing over the next year so I’ve been really excited about that. And in 2010, we’re going to try to take a podcast from just being a podcast and us telling you about and you know what we’ve learned to building more of our community and letting our listeners communicate with each other and everyone sharing what they’ve learned to build a much richer knowledge base of information.

BRANDON: Yeah, you know we get emails all the time from all of you out there saying, “Yeah, I tried this. This worked for me and this was great but I’m having a problem with this part or it just didn’t fit in my business model,” and those experiences are so valuable and if we could help propagate that across to everybody, those will be lessons well-learned from yourself and also be taught to all the other listeners so we’re happy to put that platform out there for all of you to be a part of. So please, please contribute and tell us what you’re experiences are out there so we can all learn from it.

MATT: Yeah, so the first step of that is you know this week we’re launching our new community question and answer site. So go to the site, ask a question or answer a question that’s out there. You can have multiple answers to any question that’s there so even if someone’s already answered, if you have a better answer or a different answer or just a different take on it, then answer the same question again and people will vote for the best answer. You’ll see a little arrows next to the answers and next to the questions so even if you don’t ask something or don’t answer something, at least vote for the things that you think are the best so that people get you know rewarded for giving good answers and encourage to give good answers.

BRANDON: Yeah and my goal to get answer for every question that’s up there so feel free to draw out question there because we’re going to be on there almost every day to try to get those questions answered. So what are we talking about today?

MATT: So after that long introduction, today’s topic is affiliate marketing, you know. It’s really core piece of expanding your business or a good way to get into small business of your own if you’re just starting out. You can be an affiliate. So basically the way affiliate marketing works is that a publisher is paid a commission by an advertiser for every sale they refer so you can either be a publisher or you can be an advertiser. The publisher is the quote affiliate and you’re basically creating like a content website or something and the advertiser is the person who has the goods, the online store or the manufacturer of the good. We both live on both side of this coin so it’s going to be really interesting to kind of see you know talk about being a publisher and being an advertiser.

BRANDON: Yeah, I think you know when people talk about internet businesses, being an affiliate business has got to be on the top five is one of the easy ones to get into get your feet wet, understand how internet works in terms of marketing and getting traffic to your site because pretty much what you’re doing is you’re adding value to the online world by directing traffic to certain product and if you have a knack for being able to take these concepts that we talked about in the Automate My Small Business and drive traffic to your site, you can do that for somebody else too. And why not? And get a commission for it and there’s a lot of people that build businesses and build livelihood around this concept of driving traffic to other people’s sites and it’s a good one. And there’s a lot of people doing it so you know make sure you understand that it is a competitive world out there and if you’re good at it, you can make a lot of money out of it but yeah, it’s worth pursuing and we’ll talk a little bit more the other side of it where you actually advertise to other affiliates. But for now, we’ll stick to the publisher side…

MATT: Yeah.

BRANDON: … at this junction and we’ll talk about all the options you have as a publisher.

MATT: Okay so if you’re going to be publishing and you’re going to be using affiliate links to refer sales to other people, the first thing you want to do is find some people that want to pay you to refer sales to them, right? They’re going to go and find some advertisers and there’s a couple of different ways to do this. One is you can just go to the website of the online store and scroll down to the bottom and you might see something like referral program or affiliate program and you just go and you sign up and you’ll get a link and an id and a log in to their site to be able to track all your affiliates or all your referrals and you get started. You go and you build some websites and you refer sales to them. Probably the biggest one of those is Amazon.com. They have a very big affiliate program and you can make pretty good money in referring sales to them.

BRANDON: Give me an example. I know you’ve had a few sales yourself through a website you have.

MATT: Yes, so one of the websites I run is the camcorderreview.com and it’s basically a site dedicated to camcorders, video cameras and accessories to those and so part of that site is we refer sales to Amazon.com and if anyone clicks on that link, we have I think like seven days of whatever they buy from Amazon, we get a small percentage of. We work from 4 to 8 percent of what they buy in Amazon.

BRANDON: So in that particular example, you have a lot of high end cameras and camcorders so something that would sell for …

MATT: Anywhere from like $400 to $1000 probably.

BRANDON: And out of each sale you get…

MATT: Like 4 to 8 percent, yeah, depending on how many sell like how many refer.

BRANDON: So yeah that can add up pretty quickly.

MATT: Yeah, I mean one thing you’ll find as you’re doing this is it takes a lot of traffic to generate enough sales so yeah, you can get those commissions but you got to be ought to pull in the traffic from the search engine and that’s the hard part of being an affiliate is you got to get people clicking to your links and buying stuff. So you can go to any site, Amazon is just an example but you know any product site like, Brandon, I know your site has an affiliate program in the bottom. My electronics business has a affiliate link on the bottom that anyone can sign up for. You can find it on almost anywhere but if you don’t want to go directly to the sites you can also join affiliate networks and we’re going to get into these a little bit later but basically they’re aggregators of various affiliate programs. There’s a central place you can go for and look for different affiliate programs and compare them by how much the pay out, whether they pay 5 percent or 50 percent, you know and figure out what’s the best target market for what you’re doing.

BRANDON: Yeah, there’s literally thousands of products that’s out there that you could get commission for or bringing traffic to.

MATT: Yeah, so once you sign up for these things you get a log in to their site. They’re going to give you these links and these links are basically like any URL you would normally have with kind of a question mark and some code that identifies that you’re the one that’s referring that customer to them and so you get credit. Once they go to the site, they put a cookie that identifies that customer came from you and whenever they come back to the site for a certain period of time, you’ll get credit for what they buy. So that’s one of the things you want to look at it when you’re evaluating an affiliate programs is how long that cookie last for. Some sites is only if they buy that day. Other sites you get credit for you know if they buy within the next 30 days. So when you’re evaluating which programs to go into, that’s something you really want to look at.

BRANDON: Yeah, on porchpotty.com, the affiliate that I hire by the way, if you are interested, you can go on porchpotty.com and sign up to be an affiliate but what I do is I pretty much offer a cookie open for 30 days so anybody who is linked to the site from an affiliate, they have 30 days to buy and if they do buy within that 30 days, the affiliate gets that commission otherwise it goes expired and nobody gets the commission.

MATT: Yeah.

BRANDON: You know that can be very, it depends on whose affiliate program you’re going to.

MATT: Yeah, so another thing you want to look at when you’re evaluating these affiliate programs is do you get credit for only the think you link to so if I link to a camcorder and they don’t buy that camcorder on Amazon.com but they go often buy a couple of DVDs, well, on Amazon, you get credit for whatever they buy within that store. That’s one of the reasons even though Amazon’s percentage of what you get is lower, you have a great opportunity for cross sells and adding accessories and even completely unrelated stuff onto that so you get credit for all those things whatever they do while they’re there, whereas like your Porch Potty, you only get credit for basically the few products that you have in your store, right? You’re not, don’t carry even millions of products that Amazon has.

BRANDON: Right and you know there’s all sorts of ways that the commissioned structure could be set up. It could be a flat b. It could be a percentage of sales. It could be a percentage of leads generated. It doesn’t actually have to have a sales associated with it. It could be just how many people sign up on a news letter maybe. There’s all sorts of ways to trigger the conversion so you know when you go to these aggregator sites like Commission Junction, which we’ll talk about later. There’s a whole host of different ways you can receive commission and how you get that so take a close look at that and make sure that that’s something you feel that’s fair.

MATT: So one of the other things you probably want to do with the affiliate link you get is I like to run them through a URL shortener like Bit.ly or Tiny URL, anything like that. I like Bit.ly because it has analytics for how many people clicked on that link so you have a kind of third party verification when you know whatever affiliate you’re using says, “Oh, you had a hundred clicks today, or you had you know five clicks,” you can go to Bit.ly and say, “Yeah, that’s how many Bit.ly told me that click through.” So you get some confirmation of the numbers that they’re telling you because a lot of affiliate programs will kind of not give you the full credit that you deserve so make sure you a way to verifying that. Another thing it’ll do is it will maybe hide the fact that it is an affiliate link if you’re trying to do that. With the FTC disclosure laws that are out there now, you basically have to disclose all the affiliate links anyway so it’s not a big a deal as it used to be but some people don’t like clicking on affiliate links but I use Bit.ly mainly for the analytics and be able to track. Because on your website you can, you have some of that Google analytics but if you post that link in the Twitter, there’s no way for you to know how many people clicked on that without something like Bit.ly.

BRANDON: Right. So there’s a lot of ways to generate revenue so let’s say you have website that you are selling a product of yours and you have affiliates working for you driving traffic to your site. Then you have an affiliate program of your own, you being the affiliate or the publisher where people that came to your site may choose to purchase or click on links of other products that are going off of your site maybe to Amazon or some place to buy a new camera or something. You’re generating revenue that way and then finally if they’re not clicking on a product and going to buy that, you could have a side bar or something that may run some ads and in that case you’re using something like Google adsense which by having the people on your site clicking on those ads generates a few cents per click and yes, it is small but with a lot of traffic that it can add up. So you can with one website have a number of revenue streams coming in through affiliates being affiliate offering affiliates and then of course the adsense which is not truly an affiliate per se but we call that pay per click or adsense.

MATT: Yeah, I mean there’s a couple of different techniques you can use to generate revenue from affiliate sites so you can build content sites like a review site like I mentioned, the Camcorder Review. You can add content to things like Squidoo, you’ll get some revenue credit. Anything that will drive organic Google traffic to the site and get people to click on those links, whatever you think that is for the niche that you’re building you can do that. If you talk about a book that you just read, you can link to Amazon and get credit for people buying that book. You can also, you know, tweet on Twitter different deals that you might find. So a lot of the networks that are out there will say, “Hey, there’s this deal and it’s best buy this week and it’s 20 percent off anything and here’s the link,” and so we see a lot of people on Twitter that are just you know tweeting this links and people follow like whatever hot deals that are coming out and so they’ll click on those links so you get some credit from that as you build more and more followers.

BRANDON: Yeah.

MATT: Another thing that I thought was kind of interesting as I’ve seen more and more tools built on affiliate programs. So there’s a lot of Amazon price monitors out there. So they’ll basically look for say you want to buy a new saw, right, for your garage and the saw is 400 bucks and you’re not ready to pay for it but if it came down to like $320 maybe you’d but it. Well, you can put that price watch into some of these tools and when it drops on to that price, they’ll send you a notification email that says, “Hey, look, your saw is now $315, you should buy it.” And when you click on that link and that email, that link is an affiliate link and that company is going to get credit for that and get some money back from you clicking on that.

BRANDON: So what kind of tools are there that do that?

MATT: There’s a lot of price monitors. I mean you can almost think of some of the travel websites and you know they got commissions for all the airlines and stuff like that.

BRANDON: Yeah.

MATT: Right?

BRANDON: That’s true.

MATT: But there’s tons of businesses that are doing stuff like that, building tools that make it easier for you to find the product or watch the prices or compare the products. All that kind of stuff you can build any sort of tool, even like a Facebook app that links out those stuff, right? All those wish list Facebook apps of what I want for my birthday, now those are all affiliate links. That’s how people are generating money off these days. One of the things I wanted to add to this is there are guidelines from the Federal Trade Commission if you’re in the US, that you have to have the disclosure policy. You can try to write this on your own but I found a great website which is disclosurepolicy.org and (inaudible) basically you answer five, six question-questionnaire and it generates this huge page of you know do you have any conflicts of interest or are you getting paid for these links and all that sort of stuff, and you can see example of that on our site and you can go generate one of your own at disclosurepolicy.org. But basically for our disclosure, we use a lot of affiliate links. That’s how we pay for some of our hosting and some of the bandwidth cost to distribute in the podcast. So if you hear about something on our podcast that you like and we mentioned some tools, if you can use the links on the show notes because those are usually affiliate links. We can get those affiliate programs.

BRANDON: Yeah. If you could help us out, that’ll be great and it does help cover the cost of us bringing the show to you so thanks for that if you do that. So that’s basically how you can generate revenue by being an affiliate of your own and generating traffic to other people’s websites usually selling a product or service. But if you had the product or service and you wanted to hire others those would be affiliates to drive traffic to your site to sell your product, you then are the advertiser. You’re on the other side of the fence here for the affiliate program.

MATT: Right, so you’re basically crowd sourcing and getting a team of sales people that are working their butts off to try to sell your product for you.

BRANDON: Yes. So you could do this in-house and use your own software. You know, I use Volusion as my shopping cart, as you guys know or you could go out to your affiliate networks and pay some money for them to manage it for you but there’s a few things you need to keep in mind. First of all, if there’s a policy you probably want to put in place if you did have an affiliate program, things like you know you can’t have your affiliate bidding on adwords using your brand name because you’re basically competing with them and they’re competing with you and you’re kind of trying to sell the same thing and you don’t want to be on the same side selling the same thing and ads cost for everybody.

MATT: You just drive up the cost of bidding on that keyword, right?

BRANDON: Exactly. You know commissions you can expect to pay 5 to even 50 percent of sales. My commissions that I pay out to my affiliates for Porch Potty are at about 10 percent. They get $25 for every sales and each Porch Potty’s are around $250 so that’s an average about 10 percent.

MATT: Yeah, I think 10 percent is a pretty good average around the industry. There’s some high margin like software products. You can get a really high, you know, 30-40 percent but things that have like a high fixed cost like physical goods, you know, you get lower margins on those.

BRANDON: Right. And you know maybe the company offering the affiliate program is willing to help you out by giving you some marketing material or at least give you banners and links, logos to use, pictures to use. Of course they’re going to give you URL to use. I offer my affiliates free brochures. They get packed a hundred of them at a time and they can just go onto the website and order those any time. I also give them coupon cards that are little business cards. They get their own code that they get to write on the back and really but that allows them to do is to both promote online and offline. So the offline promotion is they use the URL and it tracks it just using the software. But the offline promotion, let’s say they had a doggie daycare or pet boutique that they wanted to put some brochures at the front desk or up by the cashier checkout stand. You know those are great opportunities for people to see the product and decide then if they want to grab a brochure and take it home. But how do you get the credit? How does the affiliate get credit for doing that work and getting those brochures in the hands of the buyers? Well, the way I do it is I give them a coupon code and they write the coupon code on the back, giving the customer an additional $15 off the product. So it incentivizes the customer to use the coupon code on the back while still tracking the effectiveness of the affiliate, the person getting the commission and yes, there is an additional cost on my part by giving $15 for the customer and $25 to the affiliate but in the long run, you know, I kind of feel like it’s worth it.

MATT: One of the other things I’ve seen people do in their affiliate programs is used different domains for each affiliates so that the customer like is looking at the card and sees her own domain and they type that in and that just forwards on to the other one and that’s how you track it.

BRANDON: Right.

MATT: So like you know get Porch Potty or you know some store porchpotty.com, right. I’ve seen like that so basically the $15 coupon that you’re using is just trying to incentivize them to put the code in so you know where they came from.

BRANDON: Exactly. Even if you use it at the tradeshow or you’re doing some sort of promotional, you do it for yourself even though you’re not an affiliate and you’re not paying yourself, you still want to use something like that to track where the traffic is coming from.

MATT: Right. Another thing that I think is really important to distribute to your affiliates is some material about how your product works and information that they can learn about the product and become a believer and why it’s a good product. My wife got sucked into this product called Juice Plus which is like kind of a health supplement like fruits and vegetables something in the pill but they package that they distribute to their affiliates and sales people are just insane. They have this DVDs that are just like tell you why it’s the greatest product in the world, all these booklets giving you the facts and figures so that you have information about selling this product and the type of information about the product, what types of advertising you should be doing, you know, what are some of the like key phrases that really sell well. All that kind of information just helps your affiliates become better sales people for you.

BRANDON: Yeah, you know, I wouldn’t call myself the sales person type of guy but you have to have respect for those companies who are just amazing professional sellers, you know. They know what they’re doing. They’ve had years if not decades of experience selling these programs and they do amazing numbers, I mean mind blowing numbers and if we can learn from them, we’re all better for it and if you can get your affiliates enthusiastic about the product they’re selling through a little extra effort, maybe send them a DVD or a video that kind of gives them more information than what they would have typically got from another of your competitor or something. The more enthusiastic they are the more that’s going to come through to the end customer who they’re trying to sell to so…

MATT: And the better content they’re going to produce for you on their content websites, right? Even if you can distribute samples of your product, if it’s not too expensive of a product that a great way to get them familiar with your product and what it is.

BRANDON: Right.

MATT: And as you’re building this affiliate program one of the other things you need to think about is you know how do you encourage more affiliates to sign up so one is you give them a good commission but the next thing is do they get commission of the other affiliates that they get to sign up for you, right, like the multi tier marketing schemes.

BRANDON: Right. So you could have you know 10 percent to tier 1 affiliate and then 8 percent to a tier 2 affiliate which then tier 1 gets commission of tier 2.

MATT: Right. So yeah, now the tier one is getting that extra 2 percent from the second guy.

BRANDON: Right. I mean those are the pyramid schemes that we all have heard of and you know maybe want to stay away from it if they’re not credible but there are many that work out real well and the people who work for those companies enjoy what they’re doing. They love it.

MATT: I’ve seen like the two-level system. They’re pretty common in the web. Refer somebody else, you get some credit if the sales that they refer but it stops there so it’s not really a pyramid. It’s just an incentive for bringing more people in, you know. it don’t take all the way up to a full pyramid.

BRANDON: Right. So let’s talk about some of the networks that are available?

MATT: But before we get into that, how do you pay your affiliates?

BRANDON: That’s a good question. If your affiliates are worldwide, sometimes you have to pay through Paypal just to get the money to them otherwise you’d have to do wire transfers and those are always hairy or there’s means that you really can’t get direct deposit to them. So I’d say Paypal is the number one way I like to pay money, however I do send checks to my affiliates that are domestic because it’s an easier system for me to track. My Paypal is just one extra step I have to do so it might be different for everybody else but in the end I ended up switching over to checks for all my (inaudible) and I do that through bill pay of course, all electronic check, no paper checks.

MATT: Yeah, I think it kind of depends on the affiliate system you’re running so I know kind of Volusion will do some of those checks for you or you can do it yourself but software products like IDevAffiliate or Post Affiliate Pro, they have payment systems built into them that will distribute the payments automatically. So if you end up not using one of the networks and running your own affiliate program outside of your shopping cart, those are two good programs that are pretty popular. IDevAffiliate Affiliate and Post Affiliate Pro have links to both of those and you can kind of go and compare the features there pretty similar thing. Post Affiliate Pro is probably a little bit more popular.

BRANDON: Yeah, I think you’re right about Volusion. They print out onto paper checks if you have you know Laser printer, it has a standard check printer format.

MATT: Yeah, a lot of the shopping carts like Volusion and you know a lot of them will have a simple affiliate systems built into them but if you find yourself running into a limited set of features that when you want to go look at something else.

BRANDON: You know what this is good chance for me to kind of give a review about Volusion affiliate program. It is built in. It is free. It is easy to use. It is short on a lot of features. It does not provide anything advance in anyway. It does have a multi-tiered affiliate system and it does have trackable links. You cannot associate coupon codes with the trackable links which I needed because I like to use the coupon code for offline purposes. So I have to do kind of every month I have to do kind of a math problem to find out if one person is getting coupon code commissions as well as trackable link commissions and add that up and then put it in the bill pay to send it out through my bank which I would love to get rid off. In fact, I’m really looking towards some of these tools that we’re talking about now to completely switch over to because if I can get my payments to be automatic, which is what I’m all about that would be a big time saver for me so I’m looking forward to switching and I will report back as to which tool I will end up using and what I like about it.

MATT: Since you’re talking about those coupon codes, you want to tell the story about your problems with Google suggesting other site?

BRANDON: Yeah, it took me awhile to figure this out but there’s a couple affiliates that I had that were just doing amazing numbers. You know, they just spike out of nowhere that they were you know killing it. I mean I was happy to pay them these commissions because I was getting the sales but it was just a little bit off kill very low. So I did a little research and found out that they’re coupon codes were being spread across the internet and really those are meant to be used offline. So what was happening was, people were starting to get onto this idea that there was a coupon available and so what they will do is they would type in Porch Potty onto any typical search engine like Google and if you are familiar with Google’s new feature called Google suggestion, it tries to guess what you’re typing so as you’re typing every character, it’s putting up the most common terms. So after awhile people were starting to realize that porch potty coupon code was right below their mouse cursor as they’re typing and all of a sudden, they start realizing hey, there’s a coupon code. I didn’t know that. So then they of course, they click on it which added another so to speak to Google’s system of suggestion and it just grew on itself so it ended up being a self fulfilling prophecy that the coupon code was available and then what happened was as soon you click on Google coupon code, up pops the coupon code. They go ahead and use it. The affiliate gets the commission and sure enough it was getting out of control so…

MATT: And they probable would have bought it anyway without that coupon code, right?

BRANDON: Exactly. So anyway, what was happening was the customers who didn’t know about the coupon code going in ended up finding the coupon code because it was just basically suggested to them and it was of no effort of the affiliate and still they’re getting the commission so they’re getting large commission check from me for not really playing fair. So what I ended up doing was having to change my policy with my affiliates saying I’ll still give you this coupon codes to promote offline you know on your brochures on your referral card but I’m restricting all use of the coupon codes online. So I actually have monitors. I use Google alerts to tell me if any of the coupon codes show up with the word Porchpotty on the same page and sure enough there has been one or two who I caught trying to sneak it by me but I catch them now, you know, and it’s a simple, hey look, here’s what’s happening, do you mind if you not use it you know. The affiliates I have are really understanding and they understand. So they’re getting checks every month so they don’t want to cut that off so it’s something I think they do respectfully.

MATT: One of the other things I’ve seen companies do to try to mitigate that is instead of having a coupon code and an affiliate rate, they’ll just run those and say we’ll give you 10 percent of the price of the good to sell this, you can choose if that’s the 10 percent coupon or that’s the 0 percent coupon and just the 10 percent commission for you and so kind of incetivizes the affiliates not to give out coupon code and to kind of keep the price closer to yours.

BRANDON: Now I see so they get whatever split that they decide but they end up getting the same amount.

MATT: Right so that’s the way Dreamhouse works you know. You can decide how much of these you want to give away and how much you want to take as commission.

BRANDON: Right. That’s a good idea. I haven’t thought about that or at least I may have thought about it but I know Volusion doesn’t do that so until I have the system that can track that, that’s kind of a thing, there’s a lot of these advance features that are just not available in a typical shopping cart though.

MATT: So we talked about being an affiliate. We talked about getting affiliates to promote your product at your site. So the place that this meets is on the affiliate networks. Probably the biggest affiliate network and one of the most expensive to get on if you’re a merchant is Commission Junction.

BRANDON: They’re pretty expensive but they are the Bohemia.

MATT: Yeah, so they have a lot of companies and it’s even qualified as a merchant on this. You need to be doing $50,000 a month and sales online minimum, right?

BRANDON: And you need to be around at least a year selling though not just something you can just jump into right away.

MATT: Yeah and so each of these sites different amounts of money. There’s a set up fee on Commission Junction. I can’t remember how much it was but it’s a few thousand dollars I think.

BRANDON: Right.

MATT: And then after it’s set up, they’ll take 30 percent of whatever commission you’re giving to the affiliate so if you give you know a $10 affiliate payment then they’re going to take $3 and give $7 to the affiliate.

BRANDON: Yeah and I know Google affiliate just got launched I believe in the last month or two so that’s kind of exciting. I’m excited to kind of get inside of that and see what’s that all about because if Google is doing it, you know, there’s something good about it and I think it’s going to tie very closely into the adwords accounts and what you’re doing with all the other Google products. So I think there’s some opportunity to get in on a new platform that isn’t necessarily all that overblown or you know everybody’s on right now. So it might be a good opportunity.

MATT: Yeah and I think they’ll bring kind of some of the and absorb some of the cost down for some of the merchants and make it easier to get into a high quality network, right? So I mean Commission Junction is pretty expensive to get in and they take a good chunk of the money as commission. I think Google is going to drive down the cost and it’s going to be a lot more competitive over the next couple of years. It’s going to be easier to start these affiliate programs.

BRANDON: So as of today, it’s a $1,000 to sign up for Google affiliate network and then you have to put up a $1,000 of a deposit so that you can pay the affiliates from that. So you’re looking at $2,000 up front just to be a part of it and then I’m sure they take their cut each transaction too.

MATT: Yeah. Some of the other big ones are Clickbank and Linkshare. Linkshare was one of the easier ones to get into, right?

BRANDON: Yeah. You can sign up with Linkshare. You know they’re actually pretty expensive too, to be honest with you and they do take 2 or 3 percent of sales and they do have a sign up cost. Clicks Galore though I found is a free set up. There’s no set up at least for the bronze edition and that goes up from there but it’s all very inexpensive so if you want to try this out and just get a feel for what you can do, I haven’t tried it but it looks like Clicks Galore is definitely the best price out there.

MATT: And I guess this is really going to depend on if you really have a high volume and you can justify something like Commission Junction which might have a lower per transaction cost than some of the other ones that have low set up cost, right? So you’re just going to choose the network that works for you and has the types of affiliates that you want as well, right? Commission Junction has different affiliates on it than Linkshare has and you just kind of look in there and see what sites they’re advertising and things like that.

BRANDON: Now, all these prices that we’re talking about are when you’re the advertiser.

MATT: Right.

BRANDON: On the other side, if you’re the publisher, they’re all free. Is that right, Matt?

MATT: I haven’t found one that you pay for yet. So yeah, as far as I know, they’re free.

BRANDON: So if you want to make money off of this being a publisher and affiliate, these are all free to sign up for so you might as well just you know go sign up for all of them, browse around some of the products. Again, there are thousands of them and if you just want to try one or two of them out, you know, set up a site or use one of your own site that you have now and get some trackable URLs going to the products. You know you might be surprised.

MATT: Yeah, most of them you can set up and in their system right way. The Google Affiliate Network, the Commission Junction, there’s an approval process and so it takes a couple of days to get in but I don’t know anyone that’s been denied yet so I don’t know what you have decided to get tonight.

BRANDON: Yeah, so all and all there’s some strategy to how you use this on either end, as the advertiser or as the affiliate. I have seen certain models used where you select a niche and you build your revenue streams around a particular niche trying to grab products that are all similar so each is linking to each other and you have multiple entry points into your website and so if you’re really want to get into it, there’s a lot of strategy behind how you know really become a great affiliate and build an affiliate network.

MATT: Yeah, I mean like we talked before looking at the commissions that you’re getting can mean a difference between extremely profitable affiliate business and one where you just done a lot of time and don’t make a lot of money.

BRANDON: Yeah, I think this is an easy way to get into internet business and it’s fun to try this out so let us know how you guys do it and if it worked out for you and if you want to sign up as an affiliate for Porch Potty, go to porchpotty.com and drop to the bottom footer and sign up.

MATT: And eventually, we probably have an affiliate program for Automate My Small Business once we actually make a product.

BRANDON: Yeah. So we want to cover a little bit of news on the latest technology and what’s going on with the automated businesses. We know that Basecamp has a new version. Matt, you want to…?

MATT: Yeah, that came out in December basically a yearly update so they integrated some of their products together. I think you’re going to have a single user across Campfire and Basecamp and all their other 37 signals products.

BRANDON: If you’re a big Basecamp user that’s definitely worth thinking out.

MATT: One of the things I really like is the earthclass mail iPhone application so I’ve been able to check my physical mail on my iPhone which is been really nice. Although it was a $20 app and I don’t know. More than what I really wanted to spend but I love the functionality of it and it works well, just too expensive.

BRANDON: So basically somebody mails you a letter and you get it at the earth class mails location and they scan and you have it available on your iPhone. Is that how that kind of work?

MATT: Yup. I can zoom in and read it and go across pages and tell them whether I want them to shred it or send it to me on a package or I’ll come pick it up at the door.

BRANDON: Or they can email it to you out too, right?

MATT: Yeah, yeah, yeah. So I read it and like if it’s a check or something and I want to go pick it up, or have them send it to me, I can do that too.

BRANDON: Right. You have a couple of ways to look at it. What else?

MATT: So in the last episode, I was complaining that there’s no browser. They just synchronizes your bookmarks across all your different computers and two days later, Google Chrome comes out and says, “We now sync bookmarks across all your computers.” So there is now a browser. I meant to take full credit for this. It was my idea.

BRANDON: To have a browser from Google, is that your idea?

MATT: To have a browser that will sync your bookmarks for you.

BRANDON: Oh, alright.

MATT: It only took a, you know, when did Netscape navigator come out, almost 15 years now?

BRANDON: Yeah, yeah. Well, you know not only do they sync bookmarks but they also have a platform that people can write code for it. I think they call it Google Chrome extensions. So if you’re Firefox user and you liked your add ins and extension, now chrome can do it. So I think it’s still on a beta form though so you have to download the Google Chrome Beta. But I’ve been using that for the last four weeks now and I like it. It’s a smooth, easy to use interface. I like that the add ins in the extensions are just a single icon instead of taking up the whole tool bars. It’s much faster browser than all the rest. It seems to be secure. I’m a Google Chrome user now.

MATT: Yeah, I’ve been really happy with it. Although on the Mac that Google Chrome is not quite as stable as on the PC. On the PC, it rocks. It’s definitely my favorite PC browser but not quite there on the Mac yet and they haven’t added the extensions on Mac yet.

BRANDON: Right and I’ve reported in the past that I use Roboform as my password manager. Even though I still use that, I have decided to move over to Last Pass which is actually a built in application into Google Chrome which I found is better in one main way and that is that it synchronizes over the cloud and you can use it from multiple locations and not have to worry about it getting out of sync whereas Roboform does synchronize over multiple computers but the files are stored on each computer and they synchronize themselves across that way so I’m all for the cloud model.

MATT: Yes, you gave me a great idea when we’re doing that and I’m going to start using Last Pass to manage all the passwords that my VAs are setting up so when we create accounts on all these different sites and I had put them on a spreadsheet for awhile and now I’m just going to have all the VAs sign into the same Last Pass account and the passwords will just automatically get saved and will get stored in the central location.

BRANDON: Yeah. That’s a great idea. Yeah, there’s a couple of other tools I want to talk about what I use for the VAs. We’ll do that for another episode. And the last thing on the news is Volusion has finally come around to getting their winter 09 release and it comes with a lot of great upgrades, a lot of neat things.

MATT: So what they, I had to admit I haven’t logged into my shopping cart because my VAs do that.

BRANDON: Yeah, you know I was on there a couple of days ago and I did notice that they haven’t actually updated my, I guess they’re doing it randomly to different accounts and you don’t know when it’s going to happen on your account but they haven’t done it on mine but I did a little research on it and it turns out they’re going to now allow foreign languages to be a click away so you can pretty much have your check out page in any language at the world you can imagine. So that’s good because I was really looking forward to getting Porch Potty in Europe, you know, different areas around the world.

MATT: So they’re going to let you have localized product descriptions and all that kind of custom content as well as above and beyond the buy button and things like that?

BRANDON: Yeah.

MATT: That’s cool.

BRANDON: At least that’s how they putting it so yeah, I’m going to get that going right away. Just the fundamental stuff that they’ve picked some bugs and you know some features they’ve added to, the look on the field of the UI and things like that so there’s a lot I think they’ve added. If you want check out, their support page has a whole list of what they did so…

MATT: Yeah, so I think that’s all the news. Again, like we said at the beginning of the podcast, if you have any questions about what we talked about today, go to the Q & A site. If you just go to automatemysmallbusiness.com and then the top right, click on the community site, that will take you there and tell us what you think, ask questions there. We do ask that every post there is a question even if you know the answer, ask a question then answer it yourself. That’s perfectly valid.

BRANDON: Yeah. So we’re hoping we could hear some more experiences from you guys so feel free. Don’t be shy and we have a lot of ways to get a hold of us so checkout the website. You can see how to get a hold of us in any way, Twitter, email, Facebook, Q&A, we got it all. So…

MATT: Yeah and sign up for the newsletter and you’ll get a list of all the tools that we use and our businesses and the description of what we use them for and what they’re like and then you’ll get updates like the newsletter people got a sneak preview to the Q&A community site this week. So we try to give preference to the people that are on the newsletter so sign up and you’ll get all the latest updates. Okay, so we have some listener mail that we want to go through. We like when you guys send us mails so thank you guys for sending that. First one we have is from Ron. “Guys, my wife and I love your podcast as we evaluate some ideas for future business. We’d like to hear more discussion on viral marketing strategies using Twitter, Facebook et cetera. How can we incorporate these social networking tools into our overall marketing efforts?”

BRANDON: Yeah, this is a real hot topic right now. There’s all sorts of business jumping on the bandwagon for viral marketing and Facebook and Twitter. I think it really has depend on what kind of business you’re in but there’s one thing for sure. Let’s start with Twitter. I think Twitter is an interesting animal. To me, I feel like Twitter is a better way to build trust with your customers by providing them value on a timely basis that are small bits of information and less of a way to directly promote your brand. In my mind, I think it’s the misconception that you can take Twitter and directly just put your brand out there and have people follow you and they’re going to see every post you put up there is something about your product and they’re going to somehow click on that. Eventually, they’re going to pick up on the fact that all your Twittering is promotional tweets and they’re going to drop you from being on their follow list or they’re just not going to read them. So …

MATT: Right, yeah, so I think that’s why we focus more on just providing things that we think are interesting and we’ll be of value to other people when tweet but one thing about image into viral marketing and I don’t think specific tweets necessarily go viral within Twitter, right? I mean, yeah, the more the topic. When I think of viral marketing, I think of more things like Facebook apps and YouTube videos, definitely YouTube videos.

BRANDON: Right and something that’s maybe passed on from one person to the next and there are people out there in the Twitter sphere who do retweet certain tweets and so you can get some attraction you know if you want to call it viral I guess it is. But you know I don’t think it has that same potential of viral propagation that you might get with the video or something that people are passing on because they think it’s funny or something like that. So yeah I think Twitter is something that still needs to be hashed out. We’ll see how it matures. There’s a lot of effort being put into Twitter right now from businesses trying to use it somehow to promote their brands but I think it’s better used as a way to convey trust and get information to your customers to quickly which eventually keeps them you know with your brand in mind. So that’s probably the best way to look at it.

MATT: Yeah and I’m sure we’ll have an episode coming up pretty soon. We’ll delve deeper into social media and social marketing and how to incorporate that into your marketing strategies and stuff.

BRANDON: You know and just you know with this topic of affiliate marketing, I believe there is a spot in Twitter to utilize as a way to get your affiliate links out there. But you really can’t do it over and over and over because again your followers are going to drop you if you over promote a particular product or service. So yeah it’s something you can get out there once or twice if you feel like it something that is worth mentioning to your followers but again it’s all about bringing value to your Twitter followers and if it’s not bringing value, you’re not using Twitter in the right way. So yeah if you want to drop in an affiliate link into a Twitter post, that’s good but you really are only limited to doing that once or twice before you’re over promoting.

MATT: So we got an email from Lee. He says, “You guys have already covered some of these tools but you might want to talk about going completely paperless. I use earth class mail but I also use a service called Shoebox at shoeboxed.com to scan all my receipts, business cards. I had several years of documents, taxes, et cetera scan by pixeli. I uploaded everything to Evernote which did two things, OCR all the pdfs. It gave me a completely searchable archive of my paper documents. Evernote has an awesome iPhone app as well and also keeps the produced scanner around for these things that can’t be scanned by the services. So great podcast by the way. Looking forward to the next episode.” I think that’s a great tip. I’ve actually used Shoebox for some of my receipts to get things scanned and it will OCR them and pull out the values and you know total up all your receipts. It’s a really cool service.

BRANDON: Yeah, I love that idea. I love how she’s using all those tools because those are all very cutting edge tools. Some of them have been around for awhile but are still changing quickly. Evernote is one I’ve used in the past and all these tools are very similar. There are at least tools that have a lot of potential, a lot of power behind them and it’s all about trying to figure out the right way to use them. I’ve learned that with Evernote. At first I used Evernote as kind of like my primary notebook to keep all my ideas and my journal notes and my you know things that I come across and then organize then in subject matter and tags and all that. That was good and it does work that way but I particularly found it more useful as a more of a capturer where there is no organization. You’re not using any real structure and it’s more of a throw it in the box kind of feel and if you ever need it in the future it’s easily searchable. I feel it’s more powerful that way than it is as a organized notebook structure, though. Good tips. Thanks for letting us know about that.

MATT: Yeah and I see an iPhone app called DocScanner which basically you use your iPhone to take a photo or something and it comes out as a scanned pdf. Maybe that can work into that system as well. It wouldn’t even need that produce scanner.

BRANDON: Yeah, that’s good one. There’s a few good ways that I’ve been able to use that. You turn me on to that iPhone app, DocScanner and just last week I got a new insurance company. I switched my auto insurance to a new company. I think it’s All State or something and they gave me a discount for having an engineering degree. I think a lot of companies do that, you know certain degrees if you’re a doctor, an engineer or something like that. You can get a discount. Well, I had my diploma up on my wall in a fancy frame and it would have taken me a couple of minutes to get that thing out of there and he says “Oh, I need to have a copy of that, you know, to give you credit for it. So I pulled up my iPhone, take a picture of it and dot with my DocScanner and turns it into a pdf and from iPhone I was able to email it straight from there so it worked out great as a converter from picture to pdf instantly. So there’s a good use for it.

MATT: That’s a cool story.

BRANDON: Yeah.

MATT: So we have another email from Kirk who say he’d like to thank us for podcast well done and he likes listening to it and reading the transcript. His questions are when you’re getting a VA or any person for offshore purposes, how do you do your books in relation to this? And number two, when you have someone as an employee of your company and the person is offshore, would that be W2? Do you have to pay social security and medicare for them?

BRANDON: First of all, I think both Matt and I use US person for our books and it’s not a necessity but you know if you’re going to have somebody do your books, it likely that they know you as tax law if they’re in the US so that’s probably something to consider and secondly they are independent contractors. So according to our federal tax system, you do not file a W2 with them. They’re not W2 employees and nor are they required for you to pay social security and all the payroll taxes that come along with having an employee. So that’s a good thing of hiring independent contractors.

MATT: If they were actually I’m not sure that will work out so definitely with these, ask your CPA what they will recommend.

BRANDON: Yeah, but as far as offshore employees or independent contractors, it’s actually completely free of all the taxes even form filling. You don’t even need to file a 10-99 form whereas if they were in the US and they had a social security number, you would have to file a 10-99 miscellaneous so that they could be tracked. So that you know they can come as know by the IRS but if they’re in another country, it’s up to that country to know what income they’re making and it’s up to those workers to report it so it’s out of your hands as an employer with independent contractors and employees overseas unless you know you have some sort of structure over there like a you know sales office or something, then that’s a different story.

MATT: And then maybe one of the good things going through Odesk is that they need to deal with those things in the countries that they’re dealing with. You’re paying through those.

BRANDON: Right which is a great way to pay, it’s either Paypal or Odesk. Other than that, you’re doing some sort of wire transfer and there’s a lot of red tape when it comes to wire transfers overseas through your bank account and in fact they specify that you cannot do it and you have to some sort of release form and all those stuff. You’re definitely going to want to use Paypal or something like Odesk that uses a credit card that transfers the money through escrow so yeah, good questions. Those with things I was concerned about when I first learned about Odesk. You know, am I doing something illegal by having employees or independent consultants overseas and the answer is no, you’re not in terms of not having a report them a you know a 10-99 and stuff. So that’s a good thing so, good question.

MATT: Yeah, we like to know these questions and we’re actually going to take these questions and put them on the Q&A community site so that if you’re listening to us and you have a better answer or you know something that we didn’t answer completely in this, you know, look for these questions on the Q&A site and add your answer as well.

BRANDON: Alright, guys. So thanks for listening to us. Our hope we added a lot information you can use and we’ll see you next time.

You’ve been listening to Automate My Small Business. We hope you enjoyed this episode. To get a list of the links we’ve just talked about or download more episodes and How-To videos, go to automatemysmallbusiness.com. Thanks for being with us and catch us next time on Automate My Small Business Podcast.

Podcast music features, “Nothing’s Got Me” by Big Bad Sun, distributed by Magnatune and licensed under Creative Commons. The Automate My Small Business podcast is engineered by Vincent Furlong and transcribed by Flo Umali. And licensed under Creative Commons Attribution No Derivative Works license and may be freely distributed to share with friends, co-workers and strangers.