Before you throw yourself headlong into the marketing activities that will dominate most of your time as an affiliate, it’s critical that you select a good market in which to exercise your marketing skill. Not all products with affiliate programs are profitable and even the best marketing efforts can wasted if the program isn’t attractive to visitors, or doesn’t pay out a good commission.

While you could find a profitable market first and then locate affiliate programs within that market, it’s actually a lot faster to do it the other way around. In this lesson we'll cover Researching Affiliate Programs.

Step 1: Find a suitable program

ClickBank

ClickBank contains many excellent affiliate programs for digital download products.

Generally speaking, there are three things that distinguish a profitable program from a waste of your valuable time.

1. Commission is 60% or more

   Over the years, we’ve reached the conclusion that it isn’t worth the time and effort to promote a product unless your commission is at least 60%. As the majority of products in ClickBank retail at $30-$70, abiding by this rule means that you earn a minimum of $18 per sale. There are dozens of products in ClickBank that pay out 60% or more - the very best often pay out 75%.

   However, there are a couple of exceptions:

   a) Very high sale price: If the product sells for $155, then a 50% commission isn’t all that bad and will still be worth your time. Even so, we don’t suggest going below a 50% commission.

   b) Recurring billing: Subscription-based ClickBank products often enable you to continue earning a commission every time the customer pays their subscription. In this case, you can lower your base to 40%.

2. A High Gravity Rating

   The ClickBank gravity rating is based on the number of different affiliates that have made a sale during the week. A high gravity rating means that lots of affiliates are making sales and, in general, you can take this to mean that the product is in hot demand and has a good chance of being profitable for you.

   There is one exception to this rule: Internet marketing products.

   Internet marketing products are frequently purchased by affiliates through their own affiliate link. By doing this they get a big discount on a product; unfortunately it also radically skews the gravity, so when viewing the gravity of internet marketing products, don’t take the gravity of these kinds of products at face value. The category most likely to be affected by this type of activity is Marketing & Ads.

3. Check out the sales page

   Of course, low gravity is not necessarily unprofitable - after all, every new product has to start somewhere! However, if a product does have low gravity, then you need to dig a bit further to work out whether it will convert well.

   The best way to make learn more is to click through to the sales page and:

   • Check for lengthy sales copy. Short copy doesn’t tend to convert well.
   • Compare the copy with competing products. Is it convincing? If competitors have better looking and better-sounding sales copy, then there is probably a reason why this product isn’t doing well.

    

Example of Good Affiliate Program

This program has it all: a great gravity, a 75% commission and a high sale price.

Example of Bad Affiliate Program

In contrast, this product has a very low gravity, low commission and low sale price; if you were to view the sales page you'd also see it’s fairly short and not that convincing.

CPA Programs

Cost per acquisition programs pay a commission for each action, rather than each sale. For example, some CPA programs pay a commission on each email address captured, others for a zip code, and others still, for filing out an application form.

Popular cost per acquisition sites include PeerFly and affiliate.com

Good CPA programs are:

1. Zip code offers. Why? Because they are easy. All you need to get people to do is enter a zip code and you earn a commission. I know of several people earning over a million dollars a year just from zip code CPA offers.
2. Commissions over $1. Why? Because earning $1 a sale makes your effort worthwhile. Sure, there are plenty of programs paying 0.20 per acquisition, but is it worth the work?
3. Unrestricted promotion. This isn’t really a "rule" as such, more of a warning. Some programs look great in every way…but only allow you to promote them via email. This is fine if you have a list, but what if you don’t? So make sure you check the terms and conditions before going ahead. You’ll find that some programs have no restrictions, others have a few, and some have a lot! They’ll not doubt have good reasons for these restrictions, just make sure you’re aware of them.

Physical Product Programs

There’s only one rule for choosing a good physical product to promote and that’s:

Make sure you are earning at least $40 per sale.

Physical products have a low markup compared to digital products such as offered by ClickBank, so, instead of applying the "60+% commission" rule, look for at least $40 per sale. This means that for a TV retailing at $2500, you would want to be earning a 2% commission ($50) on each sale.

Step 2: Assessing the Market

Now that you’ve found some likely looking affiliate programs, it’s time to find out what the market's like.

Lots of Competing Affiliates on Primary Search Terms = Healthy Market

As the saying goes: there’s nothing wrong with a bit of healthy competition.

Ideally, an Internet search on the primary search term for your market should reveal heavy competition from affiliates in the form of lots of PPC ads. You can take this as a sign that there is money to be made in the market.

For example, a search on "dog training" – a market we know to be highly profitable - reveals dozens of PPC ads, and many are clearly affiliates.

On the other hand, a search on "face painting" brings up only five ads – and only one of these appears to be an affiliate. This suggests that the face painting market is either undiscovered, or unprofitable - almost definitely the latter!

Plenty of Niche Search Terms

Competition on primary terms is good, but there still needs to be room to make a profit.

Using the free WordTracker (or similar tool), your next step is to check up on the number of niche search terms for the market.

A good market has plenty of niche search terms with relatively little competition - for example, the game ‘World of Warcraft’ is very popular over the globe. It’s a market with a lot of affiliates, but there are also literally hundreds of niche search terms:

Similarly, competition is intense in the dog training market for that keyword phrase, yet there are plenty of niche terms with low competition such as:

‘stop pitbull aggression’

It’s not all about PPC ads either - for example, although the niche term "stop fox terrier digging" has a number of competing PPC ads, there seems to be plenty of opportunity for an SEO site for this search term.

Are there multiple products to promote to the market?

While not strictly necessary, it can be handy if there are several quality affiliate programs within the market that you can promote, especially if you wish to build a list.

In a market with multiple affiliate programs, such as the dating market, you could promote "How to Attract the Opposite Sex" for two weeks, and then switch to "How to Gain Self Confidence". A few weeks later and you could offer ‘How to Start Conversations’; you’re offering great value to your list and also continuing to earn money through repeat buys.

Lesson Summary

In this lesson we looked at choosing a suitable affiliate program and some of the pitfalls to watch for; we also looked at assessing the affiliate market:

Some of the things to watch out when choosing a program include:

ClickBank

• Products should have over 50% commission, preferably over 60% (with certain exceptions)
• Check the product has a high gravity rating or (if it's a new product) check for a decent sales page

CPA Programs

• Commissions should be over $1
• Beware of promotion restrictions (unless those restrictions work to your advantage)

Physical Products

• Look for commissions over $40

The second step is assessing the market

• Look for to see if the market has healthy competition (that's a good thing), but still  has room to grow
• Look to see if there's multiple quality products to promote to the market