Oct 23, 2008

Product Development

Introduction to Product Development

If you have mastered the affiliate side of things and comprehend what drives affiliates to achieve sales, it may be time for you to become a merchant and create your own product to be sold online. Although there have been successful merchants who have never been “affiliates”, if you have a working knowledge of how an affiliate likes to be treated and the resources they need, you will find it much easier to build an army of them. If you are new to Internet Marketing, you should not begin by creating your own product.

Choosing a Product to Sell

This is the first step when starting any business, whether it is affiliate marketing, or you are becoming a merchant and developing your own product. One of the best ways to find a product to create or sell is to research online. It is best to find a niche that is “untapped” and receives high volume traffic. This is not always the easiest things and often times niches are found by accident. Because of this, we always suggest that you have pen and paper handy at all times so you can record any niches that you find.

One of the greatest examples of a product development success on Clickbank were the “Data Entry” products (although these were huge scams). There were large volumes of traffic search keywords like "data entry" and someone thought it would be a great idea to take advantage of this traffic and build a product around it. Before data entry products got shut down, they were bringing in $1000's day from people looking for a type-at-home job. Although we do not suggest or condone building an unethical product, this is the type of situation where someone walks into a niche and with some create marketing builds a product that is an instant success on Clickbank.

The following are some criteria that you can use to determine whether a product will be a “winner” before creating it:

  1. It Solves a Problem – Your product solves an everyday problem that has not been addressed before (or there is a limited number of products available to affiliates). OR it solves the problem in a unique way and is less expensive than traditional resolutions.
  2. It Makes Sense – People need to understand why your product is useful, and if you cannot deliver the benefits in an easy-to-understand manner, the product may not make sense.
  3. Innovative – Your product is delivering something that is completely unique and is a brand new concept. There is absolutely nothing like it on the market.
  4. It’s Simple – A product that solves just one problem is often times the easiest type of product to explain. A more complex one may be difficult to explain and understand, thus resulting in lower conversions. This comes down to finding a niche or a sub-niche – a sub component of a larger industry.
  5. Appeal Factor – If your product looks good and is eye catching, your sales will be much greater. You may want to outsource some components of your product development to make it more appealing, such as the web design, e-book cover and the sales copy.
  6. Widespread Market – The larger the market for your product, the greater the business opportunity. Although this is the case, there are some very competitive industries that are inundated with products, but there are still many industries available that are widespread and have not been addressed.
  7. Year Round Market – The bigger the window of opportunity, the more room there is for earnings. It is best to take advantage of a market that is profitable year round rather than something that is limited to a short seasonal cycle.
  8. It Can Be Delivered Easily – Your product should be accessible via the Internet and preferably downloadable.
  9. The Quality of Your Product – If your product does not leave the person feeling that it was a created with quality in mind, you are likely to be succumb to a large refund rates. Build products of QUALITY!

Product Development

If you are not a subject matter expert in a niche, it does not necessarily mean that you cannot create a product within it. There are many freelance writers available at your fingertips that are willing to write articles and, if requested, digital e-books and tools. This can simplify the process of creating a product.

Outsourcing the Writing

WA Jobs

You have to look no further than WA to get jobs fulfilled. If you are looking for someone to help you out with just about anything, you should check out WA Jobs and post a job on it. Here you will also be able to connect with people who are offering their services. Definitely a great way to outsource some of your work in a cost-effective manner.


Elance, coming from the term freelance, is a 3rd party website that connects people with who need work with people who will carry out the work. Jobs included are web design, article writing, software development, and various other Internet-based tasks. This is a great way to outsource task that you cannot figure out how to do, or do not have the time to do.


Need a coder? You do not have to look much further than RentACoder.com, a website where you can post any job that you have and allow individuals and companies to bid on your project. We suggest that you research the persons past work, or even contact their references prior to handing out a job to ensure quality.

Pricing Your Product

Pricing a product can be one of the toughest and most finicky components of product development. You don’t want to overprice your product, but you don’t want to undervalue your product. Digital products should be kept anywhere from $0-$99. The general consensus is that people can afford products that are within this price range and impulse buys typically occur within this price range.

You also don’t want to keep moving your price around once you have already put in on the market. This will create unhappy customers (and affiliates). You should perform a certain level of research on your industry, what other products are selling for, and the value your consumers will receive from your product. From this you should have a pretty good idea what price your product is worth, and what you can sell it for.

Why do many product prices end in a number 7? This is because research has proven that the number 7 converts higher than the number 9. We have tested both and have noticed that the 7 does convert at a marginally higher rate than the 9, but this does vary on the industry and to what countries you are promoting to. Many marketers have a different view on which converts better, but we suggest that anything ending with 7 is a good start (i.e.: $67).

The last thing you should remember is that you do not want to price your product too low. If you price your product below its actual value, it will take away from the product. If it is worth $97, sell it for $97. If it is a product of quality, people will buy if it is priced correctly. Often times a low price will indicate that the product is of low quality and actually prevent someone from purchasing it.

Which Affiliate Network?

There are hundreds of affiliate networks to choose from and it can be an awkward process deciding which one will work best for you product. We have provided a list of the highest regarded affiliate networks. You should consider the price and features before deciding on an affiliate network. Another important aspect is the number of affiliates using the network.

ClickBank (http://www.clickbank.com)

Price: $49.95 Activation & 7.5% + $1 per sale.
Features: Large Network (100,000 Affiliates), Quick Approval

ClickBank does have its advantages and disadvantages. Many people choose Clickbank because of the simplicity involved with getting a product approved. For around $50, you can submit your product and have it approved within hours. Your product will also be displayed in a marketplace containing over 10,000 products and over 100,000 affiliates. Clickbank.com is a network that can only be used for digital products. Their percentage-per-sale structure is one of the highest in the industry, and this is a result of their check processing fees and administration. One of the biggest complaints among merchants is the refund policy. ClickBank only requires a return email from the “purchaser” to a certain email address if they want a refund.

RegNow (http://www.regnow.com)

Price: $20 Activation & 6.9% + $1 per sale
Features: Software Affiliate Network

RegNow.com is one of the software industry’s premier affiliate networks. They have a wide range of analytical tools, robust linking functionality, and a network of affiliates that are knowledgeable promoting software. They also offer functionality where you can offer extended download licenses and CD’s versions of the software to further monetize your traffic.

Commission Junction (http://www.cj.com)

Price: $2250 + 30% of the payout
Features: Advanced Tracking, Large Support Network

Commission Junction has the largest network of retail and service related products on the Internet. They have a large support system and a very complex (and often times confusing) affiliate and merchant administration systems. If you are a very large company and want to support of a strong, multi million dollar network like CJ.com running your affiliate operations, CJ is a good choice. If you are not willing to spend $1000’s to get your name on an affiliate network, you should consider your other options such as Clickbank.

Linkshare (http://www.linkshare.com)

Price: $5000 + 2-3% of sales
Features: Large Network, Account Management

Linkshare is very similar to Commission Junction in size and cost. Linkshare contains many different products and services, primarily focusing on the online retailers. Many larger companies use both linkshare.com and cj.com as advertising platforms to increase overall exposure. Unless you are selling goods that value over $1,000,000/year, we suggest that you use an alternative network or create your own independent affiliate program.


An "in-house" affiliate program will either require a degree of technical expertise on your part, or you will have to pay someone to set-up your affiliate program. There are definitely some advantages to running an affiliate program in-house:

  • one-on-one contact with all of your affiliates
  • can run incentive programs
  • can adjust commissions structures for affiliates easily
  • full control
  • do not run the risk of a third party company dropping your program
  • do not limit your methods of payment

There are definitely some disadvantages running an in-house affiliate program. Here are some of them:

  • have to create a system to pay affiliates
  • administration
  • may have to hire an affiliate manager
  • have to take care of all refund requests
  • responsible for maintaining and securing data

Before deciding on an in-house affiliate program, you need to decide if the time and money investment will outweigh the long term value that an in-house affiliate program will bring your company. We suggest that you choose an in-house program if you want full control of everything from your payment processor, refund management, to affiliate management.

Promoting Your Product

Once you have a product, you need to promote it to see if it converts. It is also a good idea to get it posted on an affiliate network right away so that other people can promote your product.

It is important that you offer generous commissions, as people are more likely to start promoting your product if you are being fair. You are much better off to have 100’s of affiliates promoting your product making you 40% commission, than to promote the product yourself for 100%.

Here are some other locations that you can recruit affiliates:

Affiliates are always looking for new programs to promote and new industries in which they can enter. Internet marketing related forums are not only a great place to discuss topics related to Internet marketing, they are a place where merchants can let affiliates know about their affiliate program. We highly recommend not spamming forums, however you can offer value to a forum and include a link to your affiliate program in your signature. You could even ask for suggestions regarding your affiliate program.

Affiliate Program Sites
There are several sites that you can submit your affiliate program to receive additional exposure. Many affiliates search through these sites to find programs that they can new product to promote within new industries. Here are some sites that you may want to seek inclusion for:

(1) www.associateprograms.com
(2) www.affiliateguide.com
(3) www.affiliatescout.com
(4) www.affiliateprograms.com
(5) www.affiliateseeking.com

Creating a blog about surrounding your affiliate program can also be add additional exposure and will allow you to not only promote your affiliate program, but can be used as a platform that your affiliates and potential customers can use to receive promotion information about your product.

Pay-Per-Click advertising can also be used to recruit affiliates. Many merchants use PPC channels to obtain new affiliates and it can be a highly effect way of finding quality affiliates. This allows you to be able to target the exact search terms that are specific to your affiliate program. For example, if you had an affiliate program within the "stress" niche, you would want to cover keywords like "stress affiliate" and "stress affiliate program" and then link them to your affiliate sign-up page.

Obtaining new affiliates is an essential component to having a successful product. Affiliates allow you to expand your reach into new audiences and advertising channels that you may not have thought of or would not have had the resources to reach. You should always treat your affiliates with respect as they are a driving force to your business. The better your treat them and the more support you offer your affiliates, the harder they will work for you


Product development should not be your first step to making money online. In order to become successful as a merchant, you need to understand how Internet marketing works and how to attract quality affiliates.

There can be great rewards to having your own product but with these rewards comes much more responsibility than promoting a product as an affiliate.

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