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September 1999



Affiliate Programs: An evolutionary cousin to MLM emerges on the Web - Jim Daniels

It's common knowledge that many entrepreneurs are developing new income sources on the Internet, and Bill Gates and his cronies aren't the only ones cashing in. "Affiliate program" marketers share similarities with Network Marketers and make up the latest of online success stories. Internet marketer Jim Daniels explains how it works. -- LM

Simply put, an affiliate program is a close cousin of Network Marketing which has emerged in cyberspace. Affiliate marketers, like Network Marketers, earn income on a sales commission basis. Most affiliate programs on the web don't pay as deep as multi-level marketing plans, but they can nevertheless prove to be quite lucrative.

The programs work like this: Rather than hire salespeople and take on the overhead that comes with new employees, smart online businesses are signing on thousands of "affiliates"-- independent Internet users, usually with their own websites, who agree to promote the business' website and products. The nature of the Internet allows these companies to set up automated signup and marketing assistance so affiliate programs can pretty much run on auto-pilot. An effective affiliate network allows companies to generate new sales on a commission-only basis.

So far, it sounds like a straight reseller arrangement, but here's why I called it a cousin to MLM: Many new affiliate programs are now going "two-tier." This means that affiliates can sign on other affiliates directly under them and earn commission on their sales too.

Back in January of 1998, I decided to try my hand at Affiliate Marketing. I already had a website focused on small business marketing training, and after extensive research, I found a company selling a service-- website hosting-- which related to my website focus. Anyone with a website, which included many of my site's visitors, was a prime prospect.

For each new customer I referred from my site, I would earn 25 percent of their monthly web hosting fees. It sounded like a solid residual income opportunity, so I jumped in.

I threw together a quick marketing plan to integrate this new service into my existing site. As in most affiliate and MLM programs, the company offered all the marketing materials I needed. They had brochures, banners for my site, etc. It took about a day to set everything up at my site.

My results so far? Encouraging, to say the least.

Within six months of starting, I had earned over $7,500 in commissions. After 12 months, my commissions totaled $18,000. Now, at the 18-month mark, commissions have reached over $2,600 per month. If the current growth rate continues, my monthly commission checks will hit five figures before the four-year mark. Not bad for an automated income stream which requires very little attention.

Just like any good Network Marketing program, if I decided to stop working tomorrow, my checks would continue to come in. In fact, they would likely continue to grow, thanks to overrides on the force of resellers I've signed on through my site.

Are web-based affiliate programs for Network Marketers? Well, that all depends. For starters, you will have to learn a little about what works and what doesn't in online marketing. Beyond that, however, you may find that an affiliate program is nothing more than a scaled-down Network Marketing program that is conducted entirely online. A two-level program has different dynamics than a true multi-level plan, but that doesn't mean you can't create a sizable income with it. With the powerful marketing, interactivity and automation available online, some people find that growing a large network is easier online that it has ever been in the real world!

JIM DANIELS of JDD Publishing began as a pioneer in Internet Marketing in 1996. For free assistance on how to promote any business online, visit Jim at or get his free BizWeb E-Gazette by emailing

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Reprinted with permission from Upline, Technology - September 1999, 888-UPLINE-1,