Independent commercial web marketers can vote for specialization if they so wish; they can be product magnets or customer magnets. Product magnets are web marketers who specialize in one product category. Amazon is an example of product magnet. It has chosen to specialize in books. In fact, it is one of most known product magnets and is practically synonymous with book retailing on the web. Customer magnets usually organize themselves around a specific segment of customers. Sometimes, they revolve around a product category because the customers they cater to often need this product category. In essence, they revolve around a specific segment of customers, and keep meeting their needs.
Becoming an effective product or customer magnet, involves the acquisition of the relevant marketing ability and substantial investment in infrastructure.
To make tier task easier, web marketers go in for what is known as an affiliate program. Basically an affiliate is a selling agent and a program is a tool by which web marketers acquire a bunch of selling agents. An affiliate program can be described as a relationship between an online marketer (the parent) and a bunch of independent websites (the affiliates) who are willing to work for the parent. The affiliate generates sales for the parent and the latter pays a commission to the affiliate for each sales generated by him. Affiliate programs are also known as revenue sharing programs.
Affiliates are the equivalent of the sales force in mass marketing. They, in fact, constitute a sales force that works 24 hours a day, seven days a week, and one that works on commission alone. The affiliates need be paid only for the sales actually generated by them.
Web marketers using affiliates usually pay them handsome commission, which often goes up to 25 per cent on sale. Amazon has put through an effective affiliate programs. It is the most popular affiliate programs today, with over 250,000 affiliates at the end of 2000.
Benefits to the parent as well as the affiliates:
Affiliate program benefit the parent/marketer as well as the affiliates. First, let us consider the marketer. He gains in the first place, more traffic through the affiliation program. And increased traffic naturally translates into increased purchase in course of time. With an affiliate program, the marketer gets thousands of salesmen/sale points at a relatively low cost. That is how he finds the expenditure on affiliates worthwhile. Maintaining one’s own extensive sales setup might cost much more Moreover the affiliates need be paid only on sales they actually generate.
As for the affiliates, the arrangement gives an opportunity to add value to what they already offer. Without incurring the logistics headaches and costs involved in setting up a separate web marketing site, the affiliate gets a wide range of products which he can in his capacity as an affiliate effortlessly offer to those who visit his site.
* The website Amazon is the largest bookstore in the world.
* Yet, it has no showroom whatsoever.
* It is a virtual bookstore on the net, an internal retailer of books.
* It has quickly established itself as a great product magnet on the web. Today, it is synonymous with book retailing on the web.
In less than two years fro commencement, it achieved sales of over $100 million worth of books per year.
* The site claims it can procure almost every book in print and many that are out of print.
* It has a stock list of 2.5 million titles
* Its database of authors, subjects and titles is awesome.
* The buyer can search for his book subject wise or author wise or title wise.
* It provides access to book reviews, to discussion groups and to even authors themselves. It also provides abstracts of the book. The buyer can go through all this and place the order. It has a provision or consumers to post their own reviews of book It uses the positive statements in the reviews to influence the prospective buyers.
* The books, including the latest titles, can be sold at a discount ranging up to 40 percent.