Starting up an Internet business isn’t easy. So many competitors, so many products… you can get lost really quickly in the amount of possibilities available to you.

If you’re looking to sell physical products—anything like shoes, books, golf clubs, really anything you can think of—then there might already be established retailers who have set up affiliate networks to sell them.

Or, you might want to sell something on your own, like products you create yourself or something from an exclusive provider. Not sure which road to take? Read on as we compare affiliate programs and solo business from an internet marketing point of view.

AffiliateAffiliate Programs: An easy way in?

Affiliate programs all pretty much work like this: a merchant (or retailer or brand) pays second parties (affiliates) to sell their product or to refer clients through the affiliate’s web site.

Its basic technique is bringing traffic to a retailer’s website through the affiliates. In order to make money, an affiliate must advertise their website so that customers will visit and then click on a link to the retailer’s.

Seems simple? At first glance, it is. However, affiliate marketing is a complex strategy that involves several levels and complicated compensation methods. There are at least four levels in any affiliate marketing strategy: the seller, the network, the affiliate and the customer.

About 80% of affiliate programs use revenue sharing as a compensation method. Revenue sharing simply means that you receive a certain percentage of the profits for each sale coming through your website. The more you sell the more profit you make.

Other methods include cost per action (a different fee is paid to the affiliate for selling a product, filling out a form or requesting information) and cost per click (the affiliate gets a fee for each click to the retailer’s website from links or ads).

These last two, however, are used rarely and are slowly disappearing from the affiliate marketing world.

Affiliate marketing can be an easy way to make money, but it usually doesn’t yield much unless you have a popular site. In some sectors it also has a bit of a bad reputation, as it can produce a lot of spam and lacks any industry standards. You are not in control of the quality of the products you sell and you may suffer some traffic fallout if customers are unsatisfied.

Selling your own product: control and profits

It’s easy to find a product to sell on the Internet. If you already know what you want to sell, then maybe you should consider taking care of your own marketing. Selling on your own has several advantages: you are in control of your product and your strategies at all times, and you can take care of any problems along the way.

Let’s see what selling on your own involves.

First, you’ll need a webpage: a good, well-designed and well-maintained web page with a blog and possibly online shopping access. You can either build it yourself if you possess the proper knowledge, or you can pay a professional to do it for you.

Then you need a marketing strategy. Who are you going to market the product to? What advertising and social networking strategies are you going to use? You need to reflect on these things before getting started.

The advantages of selling your own product are simple: control and more profits. As you are not sharing the profit with a retailer, it all goes back to you.

You know what you are selling (you might even create it yourself) and you know who to target. Selling your own product requires a little more effort than affiliate marketing since don’t have a structure to build on, but the Internet is full of resources to help you make your internet business profitable.

Choosing between an Affiliate Product or doing business on your own is a matter of time, priorities and money. If you’re running your Internet business part time and don’t want to put much effort into it, then affiliate marketing might be a good way to bring in extra cash. However, if you would like to develop a full-fledged Internet business, starting up on your own is a better choice.

Whatever you decide and choose to do, keep in mind that there is a lot of competition out there and that you need an excellent marketing strategy to reach your target market.

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Filed under: Affiliate Marketing

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