Affiliate Programs

(From the tutorial, A Frank Comparison of Money-Making Options)

Description: Affiliate programs are a popular option for beginners. You don't need your own product or service; instead, you sell another company's products or services in return for a commission.

Advantages:

You can concentrate solely on marketing. Inventory, billing, shipping, customer service, and so forth are handled by the company.
Start-up costs are lower. While I still recommend that you purchase a domain name and use professional web hosting services, you won't have to cough up the cash to handle issues such as inventory, billing, shipping, etc. Nor do you incur costs associated with the research and development of your own product.
Extra income. Even if you already have a product or service of your own, promoting a few good affiliate programs has the potential to bring in an excellent supplementary income.
Your business may be able to run on auto-pilot, more or less, once you've figured out what you need to do to maximize sales. Since you don't manage customer service or have to handle any of the other tasks that go along with having your own product, you can set up your marketing campaigns to run automatically while you go do something else. Tracking and monitoring of your campaigns, plus answering email, will still have to be done, of course.

Disadvantages:

You have to share the profits. You work on commission, which typically ranges from 5% to 50% of the sales price. Because you only get a cut of the profits the amount of money you can spend marketing an affiliate product is less than you might have if you had your own product. Remember, you're responsible for any costs you incur marketing an affiliate product!
You're at the mercy of a company for your livelihood. They have the right to change commissions or to even terminate the affiliate program, leaving you to try to rebuild a business from scratch! You can also lose your affiliate status and forfeit your commissions if the company believes you have violated one or more terms of your affiliate agreement / contract.
Link updates can be time-consuming. Some affiliate programs regularly test and add, modify, or remove links and banners. You are required to update your links or risk losing commissions.
You have no control over affiliate tracking - that is, how do you know that all your sales really are being credited to you? There have been many instances where affiliates have reason to believe they're not receiving the commissions due them… but that type of thing is hard to prove.
You may be restricted in what types of marketing you can do. For example, your affiliate agreement may state that you are only permitted to use company-approved ads or banners. Even if you know that these tools are not the most effective, you cannot use anything else unless you obtain explicit permission.
You rely on the company for your pay cheques. What if they're late? What happens if there's a discrepancy between what you think you've earned, and what the company has on record?

Where to Find Affiliate Programs:

Affiliate programs are available in every possible category imaginable - for sites catering to business, hunting/camping, travel, jewelry, kids, beauty, gifts, and so much more. You should be able to find something that's a good fit for your target market. The Clickbank Marketplace lists hundreds of downloadable products to pick and choose from. Also go to Commission Junction for a huge database of affiliate programs, including tangible products in a wide variety of categories.

Although you're looking for specific things (generous commissions, real-time tracking, residual income, etc), you still have to test which products appeal to your audience. It may turn out that a program that pays a mere 5% commission has products that sell far better than a program that pays 50%.

Recommended Resources:

For information products (often high-commission products due to low production and delivery costs), try Clickbank. I've used them for years. They have hundreds of different information products to choose from, in dozens of subject areas. When you make a sale, the commission is credited to your Clickbank account.
If you're looking for physical products, one of the most popular places to find affiliate programs is Commission Junction.

Don't be afraid to drop unprofitable programs and replace them with something better. But give it a reasonable chance first - you need a fair amount of traffic (I'd say at least 100 unique visitors per day, to start -- aim for 1000 visitors per day) and consistent promotion in order to make an educated judgment about whether or not the product will work with your audience.

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