There are two things you need to create a business, a product or service, and a marketing plan. Affiliate marketing lets you shortcut your startup time by allowing you to plug into somebody else’s product or service, and so far all of the affiliate programs I have found are free to join.  All you have to do is drive traffic to their website and they take it from there. You don’t really have to worry about a marketing plan either because once you have directed traffic to their site, they have all of ad copy to promote the product already in place. All you need to be concerned with is directing traffic and collecting a commission, which is usually a percentage of the selling price. I have seen some affiliate programs offer commissions up to 33% of the selling price.

To get started in affiliate marketing you will need to first find a company that offers an affiliate program. They are pretty easy to find, like Amazon.com for example. I am interested in personal growth and network marketing and I was able to find several companies with affiliate programs in those fields. Once you have found an affiliate program you want to join, you will have to create an account so that the sales you generate can be tracked and credited to you. Keep in mind that this is a business, so you will have to provide your Social Security Number so that they can report your earnings to the IRS and send you a 1099 to file with your taxes. I am not a tax professional or accountant so you may want to talk to a professional to fully understand the ramifications of starting your own business. I have been filing a Schedule C, the self-employment single-proprietor tax form, for years and it is pretty straight forward.

Now that you have an account, you are all set to begin directing traffic to the company’s web site and generating sales for them. There are several ways to get that traffic. One easy way is to include a link in your signature on every email you send. A better way to reach more people is to add your links to your profile on websites such as Facebook, MySpace, or Twitter. If you are a blogger, you can write a blog post about the product or service and add your link to the company website. Sites like Squidoo that let you create pages are another great place to write something about the product or service and post a link.

The second part to driving traffic is the link itself. When you created your account you were assigned an id that they will use to keep track of everything for you. They will also give you instructions about how to create your links to include your id so that clicks can be tracked and recorded properly. A lot of companies make this easy for you by giving you the link already formatted properly or, as in the case of Amazon.com, give you a tool to generate the link. Either way, you just have to copy the link from their page and paste it on yours. They might also provide you with banner images to help draw attention to the links on your page.

The last thing to affiliate marketing is keeping track of your sales. You will probably receive an email from the company every time you generate a sale. Some also provide you with an account page where you can login to look at some statistics about the traffic you generate. They might show you how many unique visitors you have generated and how long the visitor stayed on the site. You will also see how many sales you generated and how much you have earned in commission.

To see some examples of affiliate marketing at work, check out my Resources page. Just about everything there, all of the books and personal growth programs, are links to products from companies that I have an affiliate account with, including Amazon.com. The nice thing about affiliate marketing is that I can make some extra money by helping to get the word out about companies and products that I believe in, and would be promoting whether I made money or not.

Affiliate marketing doesn’t usually generate a lot of income. Next time I will talk about a home-based business that is like affiliate marketing on steroids where you can make enough money to live comfortably.

Last time we talked about how a “job” is a dead end.  JOB = Just Over Broke.  The problem is that your income is ultimately limited to the number of hours in the day.

What else is there?

There are three broad categories of ways to make money.  The first is to trade time for money, or have a job.  This also applies to some people who start their own business. For example, when someone starts a restaurant they feel that they need to cut costs by doing all the work themselves, which makes for some excruciatingly long days. They have to begin work very early to prepare food, work all day serving customers, then after the restaurant closes at night they still have to total all of the receipts, order supplies, and any of the other office-type paper tasks of running a business. As a massage therapist, I know that this is where a lot of therapists fail to make ends meet. They want more money so they keep adding more sessions during the day until they end up injuring themselves from overwork. At the end of the day, for both the restaurant owner and the massage therapist, there is very little money left over after expenses. That’s way too much work for so little money, not at all my idea of the American Dream.

The second way is to trade money for money, or to invest. I think most people do this to some degree, usually through a 401k plan through their job or with an IRA. I also think that most people have no idea what they are doing when they put money into their account. You need to do a lot of research to successfully invest money in stocks, or you need to have someone you trust doing the research for you. I don’t know about you, but I don’t take the time to be an educated investor. I look on my pay stubs to see that money went into my 401k then hope that my quarterly statement will show an increase in value. While some people do make a lot of money doing this, Warren Buffet for one, most people don’t do as well. Some people lose everything they have (think Enron). The problem with trading money for money is that you have to have money to start with and you have to have enough money to be able to weather the market fluctuations. And it is very risky. Most of us are probably too young to remember the Great Depression but we probably do remember the .com bust, Enron, and the very recent collapse of Bear Stearns which involved a lot of speculative investing in sub-prime mortgages.

That brings us to the third method, which is to leverage other people’s time for money. This is usually called MSI, or Multiple Streams of Income. You may have also heard the terms “residual income” or “mail box money”. This is how most, if not all, of the wealthy people created their wealth. Basically, since you only have so much time available, you use other people’s time to make money. An example that you are probably very familiar with is the person, or group of people, who own the company that you work for, assuming that you currently have a “regular” job. They have hundreds or even thousands of people, including you, doing things that make them money. The restaurant owner who was doing everything himself can turn his business into an MSI by hiring some employees to run the restaurant, which will free him up to focus on activities to build his business, such as marketing, and eventually opening up more locations and/or franchising out to other people. Our massage therapist friend, or my wife and I, can rent out some space to do massage and contract with another massage therapist to do the work. The owner only works on select clients herself and uses the rest of her time to work on marketing and attracting more clients. Then she hires more therapists to handle the growing client base and eventually opens more locations.

That’s how MSIs work in a traditional business world, but it still takes a lot of up-front work to get the business started. There are easier ways to get started that don’t require all of that initial effort. I will cover a handful of them here very briefly and cover them in more depth in separate posts in the near future.

Affiliate marketing is the easiest that I know of. With affiliate marketing you sell someone else’s product for a small commission. You can create an Associate account with Amazon.com then add book links to your website or in your email signature. When someone clicks on your link they are taken to Amazon.com where they can buy that book and you get a share of the proceeds.

In network marketing you can create full-time income with part-time effort. Take an established business (some of which have been around for 30 years or more) with established products (usually higher quality than you can get anywhere else) and start selling them. Sounds like affiliate marketing, right? Well, with network marketing you generally get better commissions and keep the profit from the difference between retail and wholesale prices (effectively buying at wholesale and selling at retail but without the headache of actually handling the product). Network marketing companies generally offer incentives too. For example, the company I’m with will make my car payments once I reach a certain level, and at a higher level will make my house payments too. That is all in addition to the money that I earn.

The real money-making opportunity in network marketing comes from getting other people to join your team. That’s what makes it an MSI. In the company I’m with, I get paid on up to six levels deep. That means I get paid on the activities of the people I sponsor, the people they sponsor, and the people they sponsor, up to 6 levels. Put another way, if I sponsor 6 people and they each sponsor 6 people, and everyone on down each sponsors 6 people, I will get paid on the activities of 55,986 people. Now that’s what I call mail box money.

Next, you can write a book or e-book and sell it online. With the internet and Adobe’s PDF format, you can self-publish and self-market your own books. You are no longer dependent on big publishing houses and major bookstores. As an author and publisher, the internet gives you complete control of how your information is presented to your reader. And you keep all of the money. You won’t get that from a traditional publisher. So, if you have something to say, say it online.

Last, you can start an on-line business. Everything I’ve mentioned so far can be done as an online business, but there are other things you can do too. Just use your imagination. I’ll give you an example to get you started. How about an eBay store. I know of people who go out and buy things, usually from outlet stores, garage sales, or auctions where they can get them cheaply, and list them for sale on eBay. People will buy just about anything on eBay.

If you want to learn more about network marketing right now, see my page on Squidoo or check out my opportunity. For some recommended book, see my resource page.