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.)
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, 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.
