The Power of Affiliate Marketing

A savvy entrepreneur is always looking for alternative sources of revenue and affiliate marketing can be a powerful way of generating income while cutting through a lot of the time consuming legwork of manufacturing, branding, and developing marketing strategies. At its core, affiliate marketing involves bringing a particular product to the attention of your consumers and sharing the revenue generated from the sale of that product through you, with whoever supplied the product.

Affiliate Marketing in Real Time

As an example, in order to provide context, imagine that Happy X is a supplier of natural supplements. GrowNatural is a health food store that deals with naturally sourced products. Happy X is trying to promote its launch of a brand new supplement designed to help people get more essential vitamins and nutrients. All sales are done online and delivered by Happy X’s supply system through their warehouse in order to keep shipments centralized and all revenue streams traveling through Happy X. Happy X has a strong history of delivering a great product but are looking to expand their reach, so they approach GrowNatural in hopes that they will help sell their product as an affiliate. GrowNatural also has a strong base of loyal customers, some of who may not be familiar with Happy X. Should GrowNatural make any sales through their clientele of Happy X’s product, they then share the profit.

Responsibilities of, and Benefits to, the Supplier

As the manufacturer of the product, Happy X’s responsibilities to GrowNatural is to provide them with all the materials required to sell the product. Happy X provides GrowNatural with all the necessary copy and links that they can post on their website with all the revenue sharing streams and stat tracking in place. In the short term, although Happy X loses money to GrowNatural in direct sales, Happy X regards any sales through GrowNatural as sales that would not have otherwise been made. In the long term, although the return on investment may be less than through a direct sale, Happy X now has the attention of the customer and has widened the base of its clientele.

Responsibilities of, and Benefits to, the Affiliate

Affiliate marketing is really the lazy man’s approach to making sales. Ultimately, the more effort an affiliate makes to push a particular product the more sales they can expect to make. It is the affiliate’s responsibility to make their customer base aware of a particular product and then back that product with their seal of approval. Any new product opens up a new revenue stream for the affiliate. In this case, Happy X has done all the work in developing the product and making it available to the consumer. GrowNatural, as the affiliate, is tasked with merely making their following aware that this product is available. How they go about this is completely up to them, but can involve any marketing strategy under the sun. It can be as simple as a banner on their website or as an involved as an email blast to everyone on their list. Affiliates that communicate regularly and are in tune with their audience tend to be the most successful.

Some Do’s and Don’ts

There are some very salesy people out in the world who generate their entire income through affiliate marketing. There are even websites and hubs where you can sign on as an affiliate to sell just about anything. However, it’s usually preferable to find a niche and stick with it. If you have a particular talent for something, or consider yourself an expert in any subject, it is advisable to market products that are closely related to that subject so that you can justify being an authority on things related to the product.

Don’t ever market a product you don’t actually believe in. Although it can be tempting to strike out and begin to market anything that can make you money, remember that anyone who purchases through is considered part of your following. They go through you because they trust you and suddenly providing them with an inferior product can result in losing their trust and the income that they generate.

Finding Suppliers in China

If you're making a product for sale, then the specific cost of manufacturing of that product will make all the difference to your bottom line. It's no secret that Chinese manufacturing can deliver a wide variety of products are very competitive rates.

If this is your first foray into the world of outsourcing manufacturing to China, you need a smart approach. Sourcing from China comes with its own set of challenges that need to be overcome. Here's how to not make it a problem.

Determine Your Needs

 

Sure, you know what you want to make but in China there are different approaches to each manufacturing contract. Basically there are big corporations that will take on the job or farm it out to a 3^rd party vendor. As a small business owner, you might want to seek out the smaller family owned business for the startup. This type of company will probably be in a better position to provide you with direct access and support. You will avoid the markup when a larger manufacturer subcontracts out your job.

Research All Angles

Before you book your first flight to China, you'll want to do a lot of research. Build up a database of potential manufacturers by searching trade directories, chamber of commerce listings in China, Export Development Corporations or business associations. This can happen when you research comparable products to yours online. You'll start seeing some of the same company names popping up. Clearly these are the dependable factories. They should be your first stop.

Pick Your Top 15 Suppliers

Once you've put a list together, start making calls or sending out emails to set up relationships. You'll want to find out all the costs associated in hiring this company from raw materials to transportation. Make a list of questions that you'll be asking of all of your suppliers and then you'll be able to narrow down the list to your top 15. These you might want to visit in person to make sure they can handle the job. It's going to take time to find the best fit for your company's needs but you're better off exhausting all the possibilities before firing up the assembly lines. Do not put your entire manufacturing assembly line on one company. Spread the work between two or three companies depending on your volume of work.

Get a Local Guide

If you are traveling to China you'll definitely want to find a local business representative to help show you around. Hopefully, this will be someone who comes highly recommended and who you've set up arrangements with before landing. The best guides are usually the government trade representatives between your country and China. You don't want to ask around at the airport for a guide!

Customer Red Flags to Watch Out for

If you are in business, you know that you have to constantly be on alert on all fronts. You try as hard as you can to plan and operate your business with clear guidelines. Sometimes, though, all the planning cannot prevent the unexpected. Many business leaders will tell you that the problems from outside are the biggest challenge.

In order for you to operate, you count on suppliers for goods and services. Your cash flow is dependant on timely payment by your customers. Any disruption from your suppliers or customers can be harmful to your operations. Continued disruption can become fatal. However, by being vigilant and spotting the early warning signs of potential problems, you can avoid trouble before it happens.

Keep abreast of a customer's payments. If the payments start becoming delinquent on a regular basis, they may be in trouble. Don't wait, though, until they stop paying. Open up a dialogue early to help you collect payments while their doors are still open.

Another warning sign is commonly known as nit-picking. You owe a customer a small credit and they refuse to pay their large bill until the credit is received. This stalling tactic should indicate to you that all is not well, as they could obviously just deduct the credit and send the balance. Perhaps, the customer suddenly begins sending you the balance in several payments, without consulting with you. Your early warning signal should be blaring loudly.

Have you noticed that there has been a large turnover of employees at your customer or supplier? Is this a sign that the passengers are jumping ship before it sinks? When you called to speak to someone over there, the usual perky, friendly reception was replaced by a rather laconic, curt reply or a disinterested, half-hearted response. Be on the alert and assess the situation carefully. You need to protect your interests.

Keeping one step ahead of the storm can be your best insurance plan.

Incorporate in Canada with CorporationCentre.ca
Click. You're incorporated ®