Recently, I agreed to review Declan Dunn's "Winning the Affiliate Game" and thought it would be the perfect time to look at affiliate programs in general.

I'll admit a certain bias going into this. My feeling has been that affiliate programs are the multi-level marketing of the Internet. I really don't like MLM and, for many of the same reasons, have not been a big fan of affiliate programs.

In this article, I'm going to look at some of the claims made by those who promote affiliate programs and then examine the realities, as I perceive them. As part of this, I will refer to
Declan Dunn's book as well as other sources.

The question is, can you really make a good living with affiliate programs? The bottom line is, if you are good at sales and marketing -- especially direct response marketing, put a lot of work into your business, and choose your product carefully, you probably can.

However, if you have this kind of talent and ambition, you'll make money in any business. The question really is whether or not there's a reasonable payoff as an affiliate.

First let's be very clear about what an affiliate program is.  When you sign up to be an affiliate, you become a sales agent for a particular product or product line. For example, as an affiliate of Amazon.com, you become a sales agent for them and get a commission on everything you sell for them.

Amazon.com has a very large inventory of products. So do other companies offering affiliate programs such as Beyond.com  (software) and barnesandnoble.com (books). Other companies may have a single product or small product line, such as hosting companies, credit card processors,  or publishers selling one or two book and/or software titles.

Commissions vary from company to company. Some pay as little as three to five percent commission. Others may pay up to 50% commission. The combination of the selling price of the article and the commission percent will determine how much the affiliate makes per sale.

Tracking software tells the vendor offering the product(s) how many referrals come from an agent and how much that agent earns per sale. Payments to the agents are made at prearranged iintervals. Amazon.com, for example, pays quarterly, if a minimum of $25 in commissions has been earned.

In theory, affiliate programs sound like a great idea. Without any investment in inventory, a person can sell useful items and make money just taking orders. Of course, in order to make any
sales, the affiliate will have to do lots of advertising and promotion, just like any other business. He or she will also have to compete against every other affiliate who is selling to the same potential customer base.

I'm sure that some people are making money as affiliates. But, they would most likely make money no matter what business they were in. They know how to sell and how to market and they work at
it. But, I'd bet that 90% of the affiliates out there are not making a good living as affiliates.

Just like in MLM. A few people make good money. Much of their money comes from signing up lots of people in a downline, each of whom might sell a few units. The people in the downline don't do very well, but the person on top does because of the sheer number of agents that are out there.

That's what works for Amazon.com. Last quarter I got a check for $25. (I didn't try very hard.) Well, if there are 1,000 people like me, Amazon.com has sold 8,000 to 10,000 books. But the 1,000 affiliates haven't made much money.

One of the selling points for vendors who are offering higher priced items to potential affiliates, such as Cory Rudl's "The Insider Secrets to Marketing Your Business on the Internet," is that you can make $30 to $60 on a $200 sale. So, instead of having to find 100 customers to make $300, you only have to find 5 or 10 (depending on the commission percent).

That's true enough. But finding people who want to spend $200 isn't that easy. And it takes some real tough selling. Like Cory Rudl does on his Website -- real tough down-and-dirty direct
marketing copy, sometimes with less-than-honest statements.

For example, when I looked at Cory's site on May 27, the copy on his site said that the offer on is book was only good until May 30. On May 30, guess what? The offer was good until June 3. (He's not the only one who does that.)

Declan Dunn is doing his best to become the Affiliate Program Guru. On his site, you can buy his book "Winning the Affiliate Game" as well as other goodies, all designed to make you rich.
Does it work?

It can. His advice is very solid. Is it unique? Not particularly.  Is it specific to affiliate programs? For the most part, no. It's the same advice I would give anyone who is trying to build a business -- online or off -- with a few specifics that relate to any online business. But he puts the information together for you and offers support materials. (And, of course, if you buy his package, you get to be an affiliate and earn 25% on sales you make.)

The problem for me with Declan, as well as others who sell get-rich-on-the-Internet material, is that they make it sound as if it's easy. It isn't. It takes lots of hard work -- and talent in specific areas to make a lot of money online. Like sales and marketing. Declan Dunn, Cory Rudl, et al are great salesmen with a good "schtick." They know how to target a market, focus their presentation, write really strong benefits-oriented copy and they sure can close a sale.

If you know how to do that, I don't care what your selling, you have a good chance of making it. To be really successful, you also need to have a knack for picking the right product, understand how to plan and run a business, and have a good relationship with money.

Herein lies the problem for me with all of the get-rich-on-the-Internet material -- including those that promote affiliate programs.  I've looked at a few. I bought one of the $49 "Secrets" just to see if I had missed anything. (I hadn't.) A friend of mine bought Cory Rudl's book and I read it. And I got to read Declan Dunn's book.

I haven't found any information in any of them that isn't available for free on lots of sites on the Net.  (I haven't seen Cory Rudl's follow-up material that goes to his customers, so I don't know what that provides.)

The service they provide is that they put the information together in one place and offer a few personal observations  -- along with lots of hype and some motivation.

What they do not make clear is how much time and money you will have to invest in order to generate a comfortable income. They also don't stress the need for good business planning and skills.  The copy is often written with great hyperbole and lots of rah-rah, you-can-do-it-too enthusiasm.

My conclusion about affiliate programs: I personally don't think it's the way to get rich -- except for the people who run the affiliate program. Even for them, it's not a sure bet unless they are willing to invest a lot in sales and marketing.

I also see some risk. Let's say you build your business around a few products and put a lot of time, effort and money into promoting the various products. At some point the vendor could go out of business, decide to discontinue the program, or change the commission rate in the vendor's favor. There's not much you can do about it.

Of course that's a risk with any retail product you might distribute, but I'm a little concerned with the new vendors on the Net who don't have a long track record. (And some are definitely lacking integrity.)

If you're just doing an affiliate program for pocket change, fine. But if you think you are going to have a great income-producing business, talk to other people who are on a particular program. Find out what kind of success they have had.  My personal feeling is that there are other business ideas that have greater potential in the long run.

When considering an affiliate program, be skeptical, be careful.  Do your due diligence. And don't expect to get rich quick.  If you like MLM, you'll probably love affiliate programs.

There's lots of helpful information on the sites listed below. I would love to hear from those of you who have tried affiliates programs. Tell me your stories.

RESOURCES FOR THIS ARTICLE

Declan Dunn's site (his book is $97 in hard copy, $67 if you download it).
http://www.activemarketplace.com

Cory Rudl's site (His book + extras is $197)
http://www.marketingtips.com

Associates Programs.com
http://www.associateprograms.com/

SiteCash -- reviews many programs + information
http://www.sitecash.com

Adbility -- Lots of information, lists of affiliate programs
http://www.Adbility.com/WPAG/