To start with, you basically sign up as an affiliate and agree to receive a commission on every sale that you refer to company. You can refer customers from a website, newsletter, advertisements, or almost any other way that you can think to promote a product.

Quick Setup

You can get started very quickly and cheaply compared to almost any other business opportunity. Although it isn't as easy as putting up some banners and waiting for checks to roll in, affiliate programs do avoid problems of inventory, shipping, customer service, or variety of other issues that a business must address.

Second Stream Income

Affiliate programs make a great way to supplement you income if you already have a product or service that you are selling. Half battle is getting people to visit your website, so if you are already generating a good amount of traffic, then adding related affiliate programs and promoting them correctly can add a good sized stream of income to your business.

Pick a Program

One of most important steps in starting an affiliate program is making sure that you sign up with right company. There are a number of factors to consider.

1. Commission - Some companies pay as low as 2% commission, while others can reach upwards of 60-70%. Obviously you aren't going to make any money promoting a product that you receive a very small percentage of sale. Your best off making sure to get at least 20% of sale.

2. Product Price - You also want to pay attention to how much product costs. You might make 50% commission, but if product only costs $6, then you are only going to get $3 a referral. You can do much better, you should be able to get at least $20 per referral for any good paying affiliate program.

Find a product with both a decent commission and a decent price. Your primary goal is making money, so make most of your time spent referring customers.

The most lucrative affiliate programs will have most competition.

Take for example web hosting, which is a very profitable type of affiliate program, pays as much as $10 a month for sales. If you wanted to buy pay per click advertising on Overture you would have to pay over $8.00 for #1 position and around $2.00 for #40 position.

So how do you get qualified traffic to your affiliate link without spending thousands of dollars? Simple, make them pay to look at your affiliate link.

What do I mean by this? The best prospects you will ever get are people who have already bought a related product from you. If you earn their trust through giving them more than they expected they are very likely to buy from you again.

Setting this up is simple. Find a product related to program your promoting. This is not as hard as you might think. Go to any search engine and type in resale rights, you will get thousands of results.

Then concentrate on selling as many copies as possible. Dont worry about making anything on initial product sale. You want to just focus on back end.

Create an affiliate program for product with a very high commission. 75% percent would be a good level to keep it at.

Then start emailing webmasters with sites related to your product and offer them 75% commission. With a commission that high you will definitely get a few to take you up on offer.

The key step in this process is setting up your customer follow-up system. Youll need a follow-up auto responder for this.