Affiliate for extra revenue or leads
by Shivani Gupta,
Newcastle Herald Small Business Column,
published Monday, 23 May 2011
Small business owners should always be searching for ways to earn income without having to put more hours in themselves. You do this by employing staff and by looking for passive income opportunities.
One area I have started to look at is affiliate marketing. This is where a business pays another business for bringing them a visitor or customer. You are essentially getting paid to bring another company a useful lead. It is an increasingly complex area but one simple example is one website driving traffic to another.
I must confess I was initially sceptical about this whole area of business but after considerable research I am now an affiliate to several businesses. Now this isn’t an easy cash cow and to be effective for you and your customers it needs to be more than just having advertising on your website. I used the following approach to guide my decision making.
Firstly the other business must have a strategic alignment with your business. I am an affiliate for a company called The Passion Test. There is a logical fit because my business is about helping people to unlock their passion.
There must also be value for your clients, you and the company – the old “win-win”. In my case, my clients get to take a free test of their passion, the other company gets a lead and we both get some income if my client wants to use their services. I rejected some programs because while they may offer me a payment, they offered no real value to my client.
Thirdly, engage in quality control. Check how long the program has been running and ring and ask people how it works, how much they pay and how they pay. I also wanted to know what information of mine and my clients they would be using and how they would use that information.
For some of you affiliate marketing may represent an effective way for you to increase your business leads through others. If you set up a "pay for performance" model, it is a fairly low-cost marketing tool.
On another note, the Budget was a mixed bag for small business. There will be instant write off for all assets costing less than $5,000 and an early reduction in company tax from 2012 13. You will also be able to claim up to $5,000 as an immediate deduction for motor vehicles acquired from 2012 13. There is a change to PAYG calculations which may improve cash-flow. If you operate your business through a family trust and have been receiving the entrepreneurs tax offset the Budget is not such great news.
Make sure you consult with your accountant and financial adviser to ensure you take full advantage of any measures.