In the last post we talked about what affiliate marketing is and
how it works. In this issue we are going to go over some of the
important things that you need to know about affiliate marketing.

Affiliate marketing can be very lucrative. It provides people with
the opportunity to work for themselves with very little risk to them. If
you are sales savvy, good at marketing and are not afraid of a little
hard work you can do incredibly well with an affiliate marketing business.

Now that you have made the decision to begin your own affiliate
marketing business there are a few important things that you
should know.

Affiliate marketing sounds easy but you do need to exercise some
caution. You want to avoid the affiliate marketing pitfalls that can
ruin your business and worse, have you crawling on your hands
and knees back to that boss that now knows how you truly feel.

People tend to get excited when they start a new venture.
Unfortunately this excitement and eagerness can cause them to
miss key things in their agreement. Whenever you sign up for an
affiliate marketing program, you will be expected to sign an
agreement. The terms and conditions of the agreement for both
sides should be outlined.

However, if they want to hide something this is where they will put
it. It will either be in the small print, so get your magnifying glass
out, or they will baffle you with legal language. Either way, you
need to read and understand your agreement thoroughly to avoid
disappointment and lost earnings.

If you are signing up for a commission based affiliate marketing
program then you need to understand how the term revenue is
defined. This is one of the biggest pitfalls of the contracts. They
may advertise 5-10% commissions but it all fall on how they define
revenue.

Most affiliate marketing programs will calculate commission on
the gross value of the sale. In other words, the amount of money
the site will get at the completion of the sale. You may think that
this sounds great. However, you need to read this part of the
agreement very carefully.

The amount of the sale almost always excludes credit card or
debit card payment surcharges. They also are likely to exclude
payment and delivery charges as well as any gift wrapping or
other surcharges. What sounded like a nice commission is soon
shrinking before your eyes. Ask these questions specifically
before you sign an agreement.

Some affiliate programs are even stricter in their definition of
revenue. Your commission may be based on the profit margin of
the sold product. For example, if you help sell a book for 20 dollars
but the company only makes 10 dollars profit, you’ll receive a
percentage of 10 dollars not 20.

This can make a substantial difference in your earnings. Again,
make sure you understand these things and ask specifically what
your commission will be based upon. Read your agreement and
look out for odd sounding clauses. These could come back to
haunt you later.

Something else to beware of when you work on commission is
returns. Many affiliate marketing companies only pay commission
out on completed sales and then only if the customer keeps the
item. If they return the items your commission could be canceled.
To really rub salt in the wounds, you could be billed for the
outstanding commission if you do not have sufficient commission
credit built up.

Make sure you understand this before signing on. You cannot
expect a company to pay you a commission on an item that is
returned but make sure you understand their return policy. Find out
your rights in this situation.

Affiliate marketing can be a great way to earn money. If you have
good sales and marketing skills then it can give you the
opportunity to put them to good use. You’ll be able to work for
yourself and not for someone who undervalues and does not
appreciate you. You need to consider affiliate programs terms
carefully. Make sure you understand your agreement and exactly
what you will be paid for your efforts.