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  • Copyright Ewen Chia, - All Rights Reserved Worldwide.


    No part of this product may be reproduced or transmitted in any form whatsoever,

    electronic, or mechanical, including photocopying, recording, or by any informational

    storage or retrieval system without expressed written, dated and signed permission from

    the author.


    The information presented herein represents the views of the author as of the date of

    publication. Because of the rate with which conditions change, the author reserves the

    rights to alter and update his opinions based on the new conditions.

    This product is for informational purposes only and the author does not accept any

    responsibilities for any liabilities resulting from the use of this information.While every

    attempt has been made to verify the information provided here, the author cannot

    assume any responsibility for errors, inaccuracies or omissions. Any slights of people or

    organizations are unintentional.

  • About Ewen Chia

    Striving to earn an extra income, Ewen Chia started his first internet business in 1997. For 5 full years, he worked on his internet business part-time every day from 11pm - 3am while holding a full-time job.

    He was motivated to build a better life for his family. After years of perseverance, he finally

    succeeded and has not looked back since.

    # World-Renowed Internet Marketing Pioneer

    Ewen is highly regarded as a pioneer of internet marketing and a world-renowed internet

    marketing expert. He is also recognized as The Worlds #1 Super Affiliate and his name is

    synonymous with Affiliate Marketing, although that is not all he does. Many of Ewen's students

    had been able to quit their day jobs and make their own income online through his proven

    training and teaching materials.

    #1 International Best-Selling Internet Marketing Book

    When Ewen launched his first print book, "How I Made My First Million On The

    Internet and How You Can Too!"...

    This book made internet marketing history by being the FIRST ever book about

    the internet business and internet marketing to hit the #1 WORLDWIDE

    BESTSELLER LISTS on Amazon, Barnes & Nobles and other online bookstores all at

    the same time in just 24 hours of launch.

    # International Speaker, Educator And Trainer

    Ewen is also a highly sought after international speaker and is always touring the world teaching

    the internet business to anyone willing to learn about it.

    He has shared the stage with experts like Sir Richard Branson, Anthony Robbins, Robert

    Kiyosaki, Tony Blair, T Harv Eker, Tom Hopkins, Les Brown, Chris Garnder and Donald Trump

    (here's a picture of Donald and him.) Ewen also received the first ever internet marketing

    trophy, World Internet Challenge for his LIVE demonstration where he started an internet

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  • Business Guide Secret

    If you are not currently doing affiliate marketing then you are really missing a trick.

    Affiliate marketing evolved from the simple concept that if

    another website sends you a visitor and that person becomes

    a customer of yours then you should say thanks to the other

    website by giving them a small piece of the pie.

    Affiliate marketing has now become a lot more complex but

    the basics are still the same. You want as many sites as

    possible to be shouting about you to their visitors so that they

    come and see your wares, and then in return you pay a

    suitable reward to that site based on your business

    profitability and margins.

    In this article I will go through a few of the things that a

    newcomer should consider when setting up an affiliate

    marketing programme:

    1) The best commission/reward structure for your business

    2) The best network/s to work with based on their affiliate

    base e.g. the kinds of affiliates that are with them and that

    they tend to attract.

    3) How to get visibility on the key affiliates websites and with

    the affiliate network.

  • 4) Working on new promotions and incentive schemes to

    motivate affiliates to promote you rather than your


    Deciding on an affiliate reward structure for your business The

    first thing to look at is your new customer recruitment costs,

    e.g. If over one month you spend 5000 on marketing and

    you recruit 100 new customers then your new customer

    recruitment cost is 50. Cross reference this with your

    customer lifetime value(if you know it) to work out how much

    commission you can pay your affiliates.

    A Basic explanation of how you could calculate this is as

    follows: The customer lifetime value will be the average top

    line profit that each customer brings you over their lifetime.

    To calculate a customers life time value the best way maybe

    to take a group of customers that you recruited within a

    months date range and to track their spend over a few years,

    you will lose some of these customers, but others you will

    maintain so you need to have a good sample size for the

    calculation to be worthy.


    1000 customers recruited in June 2008.

    Over the following 2 years they spent an accumulative

    1,000,000GBP therefore you have a customer lifetime value

    of 1000GBP


    Cost of goods sold were 700,000GBP

    Business fixed costs were 100,000GBP

    Variable business costs were 80,000GBP

  • Therefore a total profit for these 1000 customers of

    120,000GBP over 2 years, and a per customer profit of


    This is obviously a very rough fag packet example but it is

    worth doing this exercise so that you can then determine the

    profitability of all of your marketing channels through looking

    at what their cost per new business customer acquired is and

    comparing it to the customer lifetime value.

    Anyway, to keep from steering too wide form the point of the

    post... From this figure you can then determine how much

    you are willing to spend per customer on your affiliate


    You now know that if you spend 120GBP per customer

    acquisition then you will break even on that customer so if

    you build in that you want to make 50% profit and spend

    50% of the customer value then you can spend 60GBP per

    customer acquired.

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  • Now, if you work out the average number of orders of those

    1000 customers over the 2 years then you will know your

    average order size through dividing total revenue by total


    Say for example that the average number of orders was 4

    then you will have an average order size of 250GBP.

    So based on this if you can spend 60GBP per new customer

    order then your commission level for "new" customers can be

    just under 25%.

    However, not all orders are from "new" customers so you

    could do one of 2 things:

    1) Decide to average out commission across all sales by

    saying that every 1 in 4 customers is new therefore you can

    pay 6% commission overall

    2) Decide to have a higher level of commission on new

    business orders and a lower level on other orders e.g. 10%

    and 5% respectively (although you will need to have the

    backend website functionality available to track different

    customer segments).

    As well as the cost to the end affiliate you will need to figure

    in a network cost. As a basic guide this is about 25-35% of

    the commission paid to the affiliates. Therefore if you pay

    affiliates 1000/month then you will also need to pay your

    network a fee of around 300/month so this needs to be

    factored in when determining commission levels.

  • Always set your commission levels slightly lower than you can

    afford so that you have the option of increasing commissions

    for seasonal promotions and for giving high performing

    affiliates added incentives etc.

    What is the best affiliate network for me? The amount that

    the affiliate networks are willing to disclose to you will depend

    on your skills as a negotiator and also the potential size of

    your business for the affiliate networks.

    Approach all of the big networks - Tradedoubler, Buyat,

    Linkshare, Commission Junction, Affiliate Future and

    Clickbank, explain that you are going to be setting up an

    affiliate marketing program and that you want as much

    information as possible on why you should go with them.

    Ask them:

    How many affiliates drove a sale for them last month?

    So that you can compare their size and reach with others

    How many affiliates are promoting merchants in your


    So that you can see their reach in your vertical

    How much revenue did they drive for your entire industry last


    To judge the level of bottom line success in your vertical. You

    should also look (if possible) at the % breakdown of the

    revenue by affiliate e.g. what % of revenue is made up by the

    top 5 affiliates? Is there a lot of long tail/small affiliate


    How many new affiliates did they recruit last month?

  • To judge how actively they are growing and how proactive

    they are.

    How many new merchants did they recruit last month?

    Ditto, are they an arrogant and lazy network?

    How many merchants from your industry are with them?

    (good to go with the bulk as there will be a good affiiate base

    ready to promote you if they are already promoting your


    Who are the biggest 5 affiliates working with them?

    Who are the biggest 5 affiliates with them for your industry?

    How much commission will they charge on sales?

    Can they run multiple commission rates?

    Can they do lead generation on a fee per lead basis?

    What does their management fee include? How much support

    and help can you expect from them with affiliate

    recruitment/reporting/problem shooting/industry updates?

    What technology do they offer that is unique to them?

    If you can get a fair bit of detail on all of these questions then

    you should be in a good position to approach the negotiating

    stage and play them off against each other. Obviously the

    amount of leverage you have and how far you can go will

    largely depend on the size of your business and what kind of

    revenue you will bring the affiliate networks. Make the

    networks excited about your marketing and growth plans.

    Explain your past performance and what your plans are for

    the next year - if they see you as an expanding and growing

    brand then they will stretch further to meet your needs.

    By the time you have got to this stage you will have your

    preferences, go with the data, the best deal and your gut feel.

    If you like and get on with the people on a genuine level and

    trust that they will take your business seriously and will spend

    time promoting you then go with them, but only if the

  • commercials and their business proposition stack up too.

    Getting visibility with the key affiliates for your market Once

    you have your account set up and you are ready to go the

    first thing to do is to put together a target list of affiliates that

    you want promoting you. Rank the affiliates on the list by

    potential and then work with the networks on getting the best

    real estate possible on the affiliates sites.

    Get the affiliate network to give you a list of every affiliate

    who has driven a sale for any competitor of yours (that is in

    their network) within the past 6 months. Ask the affiliate

    network to rank the affiliates in order of revenue driven

    (obviously without the sensitive data) if they mess up and

    give you the sensitive data (unlikely) then all the better. Put

    together a promotional plan for the first 3 months and make

    sure that your offers blow the competition out of the water.

    Affiliates are businesses in their own right so are just

    interested in promoting the merchant who can earn them the

    most cash, so if you give them a better % commission and

    your conversion rate is as good as your competitors or better

    then you will quickly win them over. Check out the top

    affiliates EPC (earnings per click). You then need to work out

    how you can give them the opportunity to earn over this with

    you - basically calculate: (site conversion rate x (commission

    rate per sale X Average order size).

    Ensure that the affiliate network have agreed to give you

    featured merchant status for the first month and that you are

    featured all over their website/blog/twitter/facebook etc and


    Email all of the other affiliates straight away introducing

    yourself as their support at your company, explain your

    proposition, affiliate program terms (commission rate etc) and

    explain that you have an unbeatable offer for the first month

    that is going to have sky high conversion rates.

  • Save some fat in the promotional spend plan for the top

    affiliates so that you can offer them something special for a

    great location on their site.

    Once you have the top 10 on board and are recruiting the

    long tail through the email then get on the phone and work

    your way down the list getting more and more affiliates on

    board, there will be many that you cannot get hold of and/or

    who do not reply; do not be disheartened as this is normal,

    affiliates are busy people. Just try to think of good ways to

    grab their attention and leverage all contacts at the network

    to aid you in getting in contact with the affiliates.

    Keep in close contact with the network - let them know that

    you will make them work for their commission, be thankful

    and complimentary when they are good but beware of them

    being more lazy after the initial flurry - you need to hold the

    pace for at least the first 3 months and then it should start to

    get easier as you have some secure relationships that do not

    need too much maintenance. This applies to both affiliates

    and the networks.

    New affiliate promotions to get the affiliates promoting you

    instead of your competitors This is obviously a tricky one with

    no clear right/wrong way. There are a few rules that I would

    stick to though:

    Keep things fairly simple - as mentioned above affiliates are

    busy so if you come up with a highly complex (however fun)

    promotional idea they may just switch off before you sell it in

    to them.

    Keep things fresh - do not just dole out the same old promos

    every month to the affiliates, there will be no real incentive

    for them to keep promoting you and trying new things for you

    if they already know how it will perform on their site.

  • If possible base your promotions for the top affiliates around

    their site and what works well for them e.g. if you sell T-shirts

    and cushions and one site is flying on the cushions then give

    them special offers around cushions.

    Use the data you have after each promo - see what works for

    who and try to understand their site use profile so that you

    can meet their needs.

    Show your face at affiliate events, make friends in the

    industry, do people favours and just generally enjoy yourself

    as if people see you being fun and positive socially then it will

    impact the business relationship you have with them.

    If anyone has anything that they think could be added to this

    post then just let me know and I will add it in. All the best

    with your affiliate marketing!


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