Affiliate programs--in which a website carries a banner ad for a
company in exchange for a percentage of any sales referred to the
advertiser--have become quite popular among online retailers. And
one of the most lucrative affiliate programs today is operated by
online auction powerhouse eBay.
"One of the reasons eBay's affiliate program is so
successful is because of the sheer number of people that come to
eBay's website every day," says Vaughan Smith, who's
responsible for eBay's affiliate program as the senior director
of internet marketing. "We are paying multiple affiliates
every second of the year for transactions that they drive to us,
and that's the result of having 25 million items up at any one
time that affiliates can promote."
Another key reason: eBay pays handsomely. Commissions are earned
when affiliates send new users, bidding activity or Buy It Now
activity to eBay. Depending on monthly activity, affiliates can
earn between $10 and $20 for each active registered user sent to
eBay. (An active registered user is defined as a user who registers
with eBay and, within 30 days, places a bid on any item or uses the
Buy It Now feature to purchase an item.)
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Additionally, affiliates earn between 10 and 25 cents for each
bid and qualified Buy It Now transaction, a combination that allows
some entrepreneurs to strike it rich. According to eBay, it has
about 10,000 affiliates in its program, with the top 50 affiliates
making more than $1 million in commissions per year. "These
are real businesses that are making great money," says Smith.
"So if you are an entrepreneur [who] is innovative, has
technical skills and a little bit of a marketing bent, then this is
a fantastic way to make money on the internet."
On its part, eBay has tried to make it easy for affiliates to
work with the company. Affiliates are given a choice of eBay
banners, buttons and logos that they can feature on their websites;
when someone clicks on that banner, button or link, they're
taken to the eBay site with a cookie on their computer showing that
the affiliate referred them. EBay also offers Editor Kits, which
allow affiliates to add relevant, real-time eBay listings to their
sites. With these customizable features, a site that reviews
movies, for example, could have reviews on one side of a web page
and the actual listings of the movies for sale on eBay on the other
side of the page.
Last year, eBay launched its affiliate API (Application
Programming Interface) program, which lets affiliates access more
real-time eBay data than they were previously able to--such as
category listings, product details, pricing data, bidding times and
inventory counts. It enables affiliates, for example, to publish
product images from live auctions in their own applications and
sites. Using the API program, affiliates can better tie this
information into their own selling efforts, which can lead to
increased commissions.
Success Story
One entrepreneur who has found success as an eBay affiliate is
David Kaye, 48, president and founder (with wife Andrea, 33) of
Kayetech Systems Inc., an online affiliate marketing company in
Mount Dora, Florida. The company has 550 niche websites--including
AllBookstores.com, AutoBuyersAdvice.com, Fashionbrokers.com and Handbags-and-Purses.org--devoted to specific product
categories and featuring links to products on different
merchants' websites that Kayetech promotes, such as eBay.
Since Kayetech is a member of various affiliate programs,
whenever people click on the links, the company makes a profit. To
promote the sites, Kayetech relies on search advertising. The sites
come in different varieties. AllBookstores.com, for example, is a
site that allows people to find the lowest book prices on new and
used books by comparing prices at online bookstores. The site
compares prices by searching websites such as Amazon.com, Barnesandnoble.com and eBay.com, and when someone clicks on a link to
purchase or bid on a book from eBay (or any of the links, that is),
Kayetech makes a profit.
Kaye says he uses many of the tools eBay provides, such as the
affiliate API program and the Editor Kit. And he also uses paid
search advertising to generate eBay commissions. So how's he
doing? Kaye says he makes more than $150,000 in commissions per
month with eBay. "We are making the most money with the eBay
program," says Kaye, whose company comprises Kaye, his wife
and two programmers that he contracts out.
Kaye credits marketing savvy and creativity as two of his
secrets to success. "We also spend $5,000 or $10,000 a day on
paid advertising [for other promotions as well as eBay], and the
average person can't do that," he explains.
When it comes to the eBay affiliate program, you get out of it
what you put into it. To find out if it's right for you, log on
to http://affiliates.ebay.com.
Melissa Campanelli is a marketing and technology writer in
New York City.