Transcript of the live chat session that took place Thursday, April 20, 2000. These sessions are normally scheduled for 12 noon-1 PM US Eastern Daylight Time (GMT -4) every Thursday.
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colleen
davison
Greg Helmstetter and Pamela Metivier, Pamela&Greg = authors of Affiliate Selling
mary
stella
Bob Zwick Bob@CottageMicro.Com
Pamela&Greg -- Hello All
Bob@CottageMicro.Com -- Hi Pam & Greg. Do you have a link (url) to a description of your book ?
Pamela&Greg -- We have a companion website www.affiliateselling.com with lots of the information on there.
Richard Seltzer -- Welcome, Pamela and Greg and Bob. By the way, Bob, you can see an excerpt from the book at www.samizdat.com/affil.html
Bob@CottageMicro.Com -- Thanks - I'm reading it as we speak...
Richard Seltzer -- Welcome, Sophie, Stella,and davison. Please introduce yourselves. Let us know your interests and dive in.
Sophie Parker -- Hi I am Sophie Parker
Richard Seltzer -- Welcome mary and colleen. Please introduce yourselves, let us know your interests, and dive in.
Pamela&Greg -- You might be able to boost that commission a bit choosing books that qualify for a higher commission rate. Any books that are don't have a high discount will yield a higher commission rate. Making the affiliate links more prominent on the page, like appearing above the fold. All in all though, that's a pretty good rate. You might get up to about $150 for 80,000 page views though. What kind of content do you display along with the books?
Richard Seltzer -- Pamela and Greg -- While I have hundreds of links to Amazon from book review pages and pages with lists of recommended books -- pages that get lots of hits -- most of my Amazon revenue comes from random purchases. I'd say that recently 80% of the purchases I get credit for are in the 5% range, because they are books for which I have no specific links (also music and electronics stuff). People are going from my site to Amazon, and are then eventually buying other things for which I get credit. I welcome the credit. But don't see much progress in terms of revenue. Is this experience common?
Pamela&Greg -- Richard -- that experience is very common. Amazon prices it that way because they know that happens.
tracymarks -- Hello all. For the record, I have about exactly the same results as Richard with my Amazon.com book sales. And find that more than half the buyers buy books that I didn't link to...
Richard Seltzer -- A large piece of my site deals with books -- lists of every book I've ever read (really :-), favorite books, thoughts and comments about books, book reviews, etc. I just don't see much inclination on the part of visitors to simply click and buy. So while the concept is great, it still only yields pocket change. If you were in a similar position, what other affiliate programs would you consider joining?
Pamela&Greg -- Magazines.com is an interesting one. Like
books, there's a magazine for almost every subject matter.
Software is another good category, and if you go to our site, affiliateselling.com
or Refer-it.com which has a larger selection of affiliate programs, you
really can find some interesting deals such as $10 dollars new user bounty
for PayMyBills.com and some of the Web hosting services pay very large
bounties.
Richard Seltzer -- Pamela and Greg -- Thanks. Magazines.com sounds interesting. Any others you'd suggest? Do you have your own Web site? And if so, which affiliate programs do you belong to? And which generate the most revenue for you? And what does your total affiliate revenue come to? I'm still trying to get a handle on the right level of expectations.
tracymarks -- I would think it would be most viable to join affiliates programs that reflect the interest of your audience, and are therefore directly or indirectly related to the content of your site...
Richard Seltzer -- Tracy -- Amen. It's important that the programs you join fit naturally with your content. For me, books is natural. Magazines might fit as well. Also, maybe some Web hosting and other services that relate to articles at my site. But these activities take time -- time that I could turn into money in other ways. That's why I'd like to calibrate what are reasonable expectations.
Bob@CottageMicro.Com -- Hi Tracy - long time no talk. I would think that type of targeting is opposite of what works, as was pointed out by Richard and Amazon selling off topic books. Banner links are the same. They just randomly show things that might catch someone's attention. So you probably want to flood all markets to get the best results.
Bob@CottageMicro.Com -- Richard - once again you are limiting views. Suppose someone on vacations.com who was book a tour saw a link to your book and wanted something to read on their voyage.
Richard Seltzer -- Bob -- excellent point. It's just hard to conceive of all the possibilities and make all the business arrangements -- which takes time.
Pamela&Greg -- Richard -- Yes, you are limited. They're getting broader everyday. At the time we wrote the book, they have books, music, sporting goods, movies, electronics and game. Check them out periodically to see what new products they might be adding.
Richard Seltzer -- Pamela and Greg -- Once again, trying to calibrate. Admittedly, your own site is new. But what are your expectations in terms of revenue from the various affiliate programs you have joined?
Pamela&Greg -- Richard -- 70% of the all affiliates are in between $50 and $250/month. We *hope* to be on the high end of that :)
Pamela&Greg -- It's important to point out that large sites like epinions and baseball.com make significant revenues using affiliate programs but at the point a site demonstrates very high volume, they can call the merchant directly and negotiate higher rates as a "premiere partner."
Richard Seltzer -- Pamela and Greg -- So is there any way to get significant revenue from this activity? Is it a matter of signing up for dozens of affiliate programs, each of which generate between $50 and $250/month? Is that feasible? Let's face it -- $50/month is not particularly interesting, nor is $500/month. Only if you could generate about $5000/month does this start to sound like a business proposition, rather than a hobby.
tracymarks -- I would imagine that one would do better if one set up an online activity related to the product or service of one's affiliate. For example, I lead online book discussions and always create an info page on each new book, with a link to Amazon.com for purchasing the book. That's smallscale, but if for example one would an online seminar on how to use a particular product with a link to that product site.....
Richard Seltzer -- Tracy -- Sounds like a good idea. But once again, I feel it's necessary to calibrate the expectations. Say you held an online seminar on how to use a praticular product. Odds are that the people taking the seminar would already own the product... What would be a reasonable expectation of affilitate-related revenue in the best of all possible cases? And would that justify the time you spent doing all the setup?
tracymarks -- For some of us, Richard, increasing monthly income by $500 per month would be a significant gain!
Richard Seltzer -- Tracy -- I wouldn't throw $500/month away either :-) However, I wouldn't go out of my way to restructure my Web site and invest lots of time in updating links and creating unique product-related copy just for $500/month. I get the sense from the book that affiliate sales are truly revolutionary in their potential implications. I believe that. But I'm still stuck trying to sort out what I actually could and should do to generate significant revenue this way.
Pamela&Greg -- Richard -- The trick is generating high traffic volume rather than worrying too much about whether you're getting 8% vs. 10% from various merchants.
Pamela&Greg -- Tracy & Richard -- In a case like that they can look for cross-sell and upsell opportunities with tangentially related products and services. Sites with list after list of product links tend not to do as well as sites with compelling content that just so happens to be presented alongside related product links.
Richard Seltzer -- Pamela and Greg -- From your experience and research, what level of traffic is necessary to generate interesting affiliate-related revenue? In other words, how much traffic would it take to get somewhere in the range of $5000/month (assuming the affiliate relationships were all with companies whose products/services related directly to your existing content).
Pamela&Greg -- Richard -- the next generation services such as CrossCommerce will automate the product update task with support of real-time queries such as "insert topselling book about java" here. Freeing up your time to create content rather than merchandising.
Richard Seltzer -- Pamela and Greg -- I wouldn't consider that a matter of "freeing up" my time, but rather a matter of turning over control of my site to another company.
Pamela&Greg -- Richard -- it all depends on the scale of your site. Hand-picking 10,000 products to be refreshed daily would be much nicer to do with an API. But clearly there will always be hand-selected products. For instance, a particular book and its review, and for cases like these the CrossCommerce type intermediaries simply update the price in realtime. Something that is very effective merchandising (leads to higher sales) but is currently discouraged or prohibited by most merchants affiliate programs because they don't want outdated prices to appear.
Richard Seltzer -- Yes, I'm interested in affiliate selling primarily from the point of view of a Web site owner who could generate revenue by participating in the right affiliate programs. And your book is an eye-opener in terms of the variety of possibilities. But other folks, I'm sure, are interested from the perspective of how to set up and run an affiliate program to generate more sales for their online business. What's your advice in that case? Roll your own? Or go with a service that focuses on that approach?
Pamela&Greg -- Go with a services that focuses on that approach such as BeFree, Commission Junction or Linkshare. BeFree is most appropriate if you have strong brand and your own traffic already. Commission Junction is the most accessible for Webmasters on a budget, and Linkshare is kind of everything in between.
Pamela&Greg -- Bob- All of our affiliate links are in our Clip2.com guides on our web site, affiliateselling.com, which makes maintaining our links really easy. We just launched the site so we haven't seen much revenue flow yet.
Richard Seltzer -- Pamela and Greg -- what do the services like BeFree, Commission Junction, and Linkshare provide? What do they expect of you? What do they charge?
Pamela&Greg -- CrossCommerce is a next generation "mega-affiliate" program for higher volume sites who would like to choose from millions of products from hundreds of merchants in one consistent search interface and then have private labeled shopping cart, fulfillment and after-sale customer support. That should be launched this summer, but you can check out CrossCommerce.com
Pamela&Greg -- Richard -- they provide access to many affiliate programs in one place including tracking reports, they recruit affiliates for you if you're a merchant, and they pay affiliates directly on behalf of the merchant. Be Free charges a $5,000 start-up and about $3,000 per month maintenance. LinkShare is $5,000 licensing fee, $1,000/year after that and about $2,000 /month maintenance fee. Commission Junction costs only $795.00 to get started and they just charge 20% of the payout to affiliates per month.
Richard Seltzer -- Pamela and Greg -- are you fimilar with Vitessa? I just saw an article in Internet World about them. Purportedly, their model is to "disintermediate" Amazon. In other words, they make it possible for little sites to hook up directly with distributors, by-passing the on-line retailer like Amazon. How do you see this playing out?
Pamela&Greg -- Richard -- Very similar to CrossCommerce. That space is definitely becoming very important and we forsee the day when any web site will effectively have its own private labeled version of Amazon. Chapter 1 of the book paints our whole vision of the Web's future in this regard. We call it "hyper-enablement." Every small piece of the value-chain has been outsourced and integrated but the customer thinks you're doing everything.
Richard Seltzer -- Pamela and Greg -- I gather that Vitessa and Cross Commerce basically connect a site directly with wholesalers/distributors who then drop ship to end customers. What does it take to start playing in that arena? What kinds of startup fees and other expectations are involved? Is that a reasonable alternative to joining affiliate programs for a small site today?
Pamela&Greg -- Richard -- You can find and join programs through those. It's automated sign-up, usually with no size restrictions. For some programs, there are minimum page-view restrictions. For example at Dell, you have to have 500 page view per month :)
Richard Seltzer -- Pamela and Greg -- For minimum page-view restrictions, are they talking about views of one particular page or views for an entire site? (I have over 1000 pages at my little site).
Pamela&Greg -- Richard -- that's views for an entire site.
Richard Seltzer -- Pamela and Greg -- I have a "no graphics" site. So images of book covers would not fit (and might have a negative rather than a positive effect).
Pamela&Greg -- That's too bad because actually virtual storefronts are the most successful money generators partly because they tend to show products. Maybe you could provide a link to one of those using Affinia or VStore.
Richard Seltzer -- Pamela and Gregg -- What are Affinia and VStore? What service do they provide? (By the way, when it comes to books, my idea of "showing products" is providing text/content. I don't think of the cover as the product.)
Pamela&Greg -- Affinia and Vstore are Virtual Storefront providers. They're free. They allow you to select products and arrange them in a storefront type of environment which is very convenient for people who don't want to build a whole web page. Because they provide templates, they end up looking like Affinia and Vstore sites. So while they save a lot of time, they are not necessarily the appropriate solution for a strongly branded site. Despite that, they're still very effective in generating revenue assuming you have enough traffic going there. Visit MyFamily.com for an example of a Vstore implementation. We should note that that was a custom integration as VStore appears to be aiming to provide services for higher end web sites.
Richard Seltzer -- Pamela and Greg -- With Affinia and Vstores, are you limited to the products that those companies normally carry? If so, what kinds of products are those?
Richard Seltzer -- Pamela and Greg -- Trying to make sure I understand this... If I go to Amazon and set up a zShop, I end up selling my own goods. If I use VStore or Affinia, I am basically selling brandname merchandise that those companies act as a channel for. Is that right? Can I add my own products to a VStore storefront?
Pamela&Greg -- Richard -- That right. We're not sure if it's possible to get one of your own products on the Vstore storefront or not. You would have to do it with a link pointing outside of the store, if that's possible at all.
Richard Seltzer -- Pamela and Greg -- With VStores and Affinia, do they take care of the credit card transactions, or do you need your own merchant account? And do they also provide a shopping cart? And is that shopping cart exclusive to your site? Or can a customer "roll" that cart from store to store before finally doing a transaction?
Pamela&Greg -- Richard -- They take care of the credit card transactions and yes they provide an exclusive shopping cart. We should note that on Vstore that the shopping cart and cc transactions appears on your virtual storefront rather than taking you to another page where the transaction takes place, as is the case with Affinia.
tracymarks -- If one has a site known for only offering the highest level of quality, one would want to be VERY DISCRIMINATING in regard to Affiliate programs one links to.......only those that one personally highly recommends because of the quality of their products and services. It's timeconsuming etc. to fully check out the products and services of each...
Pamela&Greg -- Tracymarks -- by combing through the merchants on a directory like ReferIt you can find a high-quality merchant for every product category and then stick with that merchant. But for people who have more time they might make higher commissions by searching for specific deals and commissions offered for a particular product.
Richard Seltzer -- Pamela and Greg -- getting back to Sophie's question and Tracy's related comment -- when you set up an affiliate association, your company and Web site associates itself in the mind of customers and visitors with those other companies. That seems to imply a risk. For a large company that you know and respect, like Amazon, that's a no-brainer. But for other sites, the time involved in checking the company's credibility and service could be considerable. And for a company wanting to establish its own set of affiliates, establishing credibility could be difficult to start, and to maintain that credibility, such a company would have to be selective about who it accepts as affiliates. Sounds complicated. Any way to get around that?
Pamela&Greg -- From an affiliate point of view, many affiliate directories like ReferIt and AssociatePrograms.com offer user reviews for affiliate programs. Also check BizRate.com and we wouldn't affiliate from any site we wouldn't be willing to buy from ourselves.
Pamela&Greg -- From a merchant's point of view, there's a trade-off between having more vs. better affiliates. And they can set that bar whereever they like during the application process. Many merchants reserve the right to visit affiliate sites before approving them. So in practice this has a large labor component and most sites automatically accept but then reserve the right to cancel if they receive complaints or based on poor performance.
Richard Seltzer -- Tracy -- good point. I was presuming that plain text links are enough. Pamela and Greg -- do the programs that you are talking about require the use of graphics/icons? Or do simple links suffice?
Pamela&Greg -- Tracy -- any type of link can be an affiliate link including a hotspot on an imagemap which leaves the options wide open to creative designers such as yourself.
Pamela&Greg -- Richard -- some programs do require banner ads and other graphics. However, many do not. Check out Linkshare for affiliate programs with unique linking opportunites. For instance, some offer Search Boxes.
Pamela&Greg -- Mary -- The primary advantage is that you get paid every time a unique visitor clicks on a link to the merchants web site whether they buy anything or not. The disadvantage is that you earn typically between 2 and 4 cents per click. So you have to ask yourself "Will I make more money doing this?" Or getting $20 from the sale of a Palm Pilot that only 2-10% of people who click through actually buy.
Pamela&Greg -- As always, experimentation will help you optimize.
Pamela&Greg -- Richard -- Good question. We agreed to create and host the site, affiliateselling.com, but it's our site. As are all editorial decisions. We own the copyright, so we can post limited excerpts to the extent they help sell hard copies of the book.
Richard Seltzer -- All -- we're getting near the end of the hour. If you have additional questions, you could send them directly to the authors or send them to me and I'll include them with the transcript, which I hope to post this weekend. Check www.samizdat.com/chat.html
Richard Seltzer -- Pamela and Greg -- Thanks very much for joining us today. And good luck with your book. All -- please let me know your preferences for future topics. Send email with your suggestions as well as followup comments and questions to seltzer@samizdat.com
tracymarks -- Tracy Marks tmar@tiac.net, www.windweaver.com At Ebay, members.ebay.com/aboutme/torreyphilemon/
tracymarks -- Thank you for sharing, Pamela and Greg. I will look forward to both reading your book and checking out your web site.
Richard Seltzer -- All -- before you sign off, please post your email and URL addresses (don't presume the software captured it).
Pamela&Greg -- Thanks everyone for great chat. Bye
Richard Seltzer -- Thanks to all.
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