August 8, 2005
A Ball Bearing in the Wheels of E-Commerce
As an online marketing professional, I’ve long understood intellectually how e-commerce works, how affiliate networks function, and why the internet is such a powerful selling tool. But I got an email the other day that drove this home more directly.
When I started my blog about a year and a half ago, I set myself up as an Amazon affiliate, meaning that any time someone clicks on a link to Amazon from one of my postings or on the blog sidebar, I get paid a roughly 4% commission on anything that person buys on Amazon on that session.
According to the email report I just got from Amazon on Q2 sales driven by my blog, I am responsible for driving traffic that buys about $2,500 worth of merchandise from Amazon every quarter, which yields about $100 to me in affiliate fees. All I really link to are business books that I summarize in postings, although people who click from my blog to Amazon end up buying all sorts of random things (according to my report, last quarter’s purchases included a Kathy Smith workout DVD and a new socket wrench set in addition to lots of copies of Jim Collins’ Built to Last and Malcolm Gladwell’s Blink.
This is a true win-win-win — Amazon gets traffic for a mere 4% of sales, a relatively low marketing cost; I get a small amount of money to cover the various fees associated with my blog (Typepad, Newsgator, Feedburner), and people who read my blog pay what they’re going to pay to Amazon anyway – and maybe get something they otherwise wouldn’t have gone out to get in the process.
My blog is certainly not a top 1,000 blog, or probably not even a top 10,000 blog in terms of size of audience. This is merely a microcosm that proves the macro trends. If I’m driving $10,000 per year of business to Amazon, now I REALLY understand how there are now approximately 500,000 people who make their LIVING by selling goods on eBay, and how probably another 500,000 people are making good side money or possibly even making their living by running offers and affiliate marketing programs from their web sites. I’m like a little ball bearing in the finely tuned but explosively growing wheel of e-commerce.
If my quarterly affiliate fees keep growing, I’ll find something more productive or charitable to do with them than keep them for myself. But for now, I am covering my costs and marveling on a personal level at how all this stuff works as well as it does.