2004 / October 17^th/ Why Affiliate Programs Will Save The World

If you’ve seen one, you’ve seen ‘em all. You know what I’m talking about - those dreaded AWS sites that keep popping up. Register a domain, pop in a script, change a few variables - suddenly you’ve got an entire site full of inventory. Prices, pictures, descriptions, reviews and most importantly - that affilate link to amazon. If you don’t know what I’m talking about, check out this store here.

To intelligent, internet saavy folks our eyes cringe as soon as we see it. The wheels in the brain start turning and we soon begin to think “Scam! Run away! Run Away! - Honey, hide the credit cards!” Unfortuantely, to the average Joe he thinks “Wow, you know - I need a new SkillSaw” and soon enough he’s at the checkout screen at amazon.com before he knows it. The owner of the orignal site just made a few bucks off that guy’s purchase. The world keeps revolving.

Many of you may be thinking to yourselves about how that poor Joe got suckered in. But, did he? I don’t think so. He didn’t loose any money in the process. In fact, no one lost money except for Amazon. Or did they? No - actually, they just made a sale they otherwise wouldn’t have. Let’s take a step back for a minute. How are people getting people to these AWS sites and generating sales? Search Engines and Promotion. Okay, sounds good. It’s a simple matter of the vastness of Amazon. Amazon can not SEO their pages for really random searches that people inevitably make. Their affiliates can. Amazon cannot account for the different places potential customers may come from. Affiliates can.

I’ve come to the realization that AWS is the single greatest business move that Amazon could have made. With many affilliates making close to the $10k per month range, you have to realize how much amazon is making. Affiliate rates are generally somewhere around 10-12%. Let’s take Scrivs for example. He made $9688.31 during September off of Amazon Affilate programs. That translates into somewhere around $100,000 of income to Amazon. Holy crap batman, I think we might be on to something. That’s just one person you have to realize. There are hundreds of thousands of these sites, and thousands of people making good money off of the Amazon Affiliate program.

If you think about this in a real world sense, it’s as if Wal-Mart just opened up a way for people to build a store, house the entire inventory of Wal-Mart in it without any start-up costs, nearly no maintainence costs - and paid them every time someone bought a product. More sales are generated, and the only people loosing out are stores selling (or rather, not selling) the same products as Wal-Mart. It’s a gigantic pyramid scheme, except it really doesn’t cost a thing to join - and quite honestly, the most you’ll loose is your $10 to GoDaddy for a domain and a few bucks for hosting.

In regards to the technology

Amazon was the first company to prove that XML Web Services have a real, profitable application in the internet. I can’t help but think how much money the tech guy who said “You know, we could use this technology called XML in conjunction with a Java backend and create a way for people to list our products on their sites.” I bet that guy’s got a small mansion somewhere in Morgan Hill now. It just goes to show the immense power behind XML (the same stuff that RSS is made of).

So I’m sitting here wondering why more companies aren’t providing as robust Web Services as Amazon. The ROI is simply astonishing. Invest at most, a few hundred thousand dollars and make it up the next month in profit. I’m sitting here wondering why sites like Musician’s Friend don’t offer Web Services. Seems like a no-brainer to me.

Other people making money makes me more money

What I hope that you take from this entry is not only that affiliate marketing is not only good - but quite simply the best thing to come to online purchasing since eBay. I also hope you see the potential of affiliate marketing when combined with robust Web Services. Maybe one of your clients runs an e-commerce site of his own. Why not run this idea past him? Might make you, him, and other people more money.

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   Wired

   October 23^rd | #

   Soooo glad I saw this stuff coming a while ago :)

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