joint ventures Martin Lee on 15 Oct 2005 02:13 am
Setting Up Joint Ventures
To set up a successful joint venture, you will need to identify a product or service that will provide value to a group of people. You can either be in control of the product or service, a list of people (prospects, leads or clients) , or even none of them. In the last case, you act as a middleman and help to bring together the two ends.
It can be a low cost yet lucrative business in itself.
One potential hurdle or obstacle to the first timer would be the legal aspect of it as well as ensuring that profits are paid out as agreed. What could you do if the prospective joint venture partner just took your idea and executed it himself without agreeing to go into partnership with you? This could very well happen if you are just acting as a middleman. Even if you go into an agreement, how can you track the sales accurately?
Halfway through reading “Joint Ventures: From Mediocrity to Millions”, it dawned on me that this was no longer a problem with the emergence of affiliate programs on the internet many years ago. The affiliate program is a perfect and complete turnkey solution for the setting up of joint ventures. Let me explain further.
Firstly, in case you do not know what an affiliate program is, it is simply a program that a provider of a service or product sets up to get more customers. This is achieved by offering a commission for people to refer customers to him. This commission can range for the low 5% to even 100% or more of the product or service price. It can also be a pay per lead, pay per sale or even pay per click affiliate program. Even Jay Abraham has his own affiliate program. (Edited: This affiliate program is no longer available as the insiders club has been discontinued.)
So for any affiliate program, there will be two ends, the provider of the product or service who sets up the affiliate program, and the person (also known as the affiliate) who signs up for it in order to promote it.
Setting up an affiliate program can be as easy as joining an affiliate network like Commission Junction, or installing a paid affiliate program manager like AssocTRAC. I will talk more about the different affiliate networks and programs available in a future update.
The technical aspect of promoting it is usually done online via a special url given to the affiliate. If the sale occurs after someone clicks on the link, the referral commission will be credited accordingly.
Let us now look at the different parties in a joint venture and see how they can make use of affiliate programs.
For a provider of a product or service, he can set up his own affiliate programs and decide the desired commission that he is willing to pay out. Then he can start to look around for people who have lists of people who will get value from the product. Ideally, it should be a complementary and non-competing to what they have currently. If the person is willing to do the promotion, he can simply sign up for the affiliate program and everything will be tracked automatically through the affiliate program.
For a person in control of a list, then all he needs to do is to search the various affiliate networks, look for complementary products to promote, and sign up as an affiliate.
What about those people who have neither a product nor a list but want to set up joint ventures as a middleman? It is still possible through the use of a 2 tier affiliate program. This is a program that allows affiliates of an affiliate program to recruit affiliates and get paid on any sales generated by their affiliates. Confusing? Let me give an example.
Jay’s affiliate program happens to be a 2 tier program. If you sign up for it and refer clients to him, you get paid about 33% of sales. Now, if through your recommendation people sign up for the affiliate program, you will also get paid 7% of sales they generate!
So, for a affiliate program that is 2 tier, you can become a super affiliate who goes around matching the product or service to people who have control of lists. A good thing about this is you can start off from zero base with neither products nor list. You need just your ideas and igenuity to contact the correct people and bridge them with the relevant products.
Doing joint ventures has never been easier! So, what are you waiting for? 🙂
To end off, one of my webhost is having a promotion now(I use a few webhosts to host my sites as it is a bad idea to put all my eggs into one basket). If you are currently looking for a cheap and reliable hosting for setting up of new multiple sites or just for backup purposes, now’s a good time to check out the multisite express plan here at site5. The offered price is available until 23rd Oct 2005.
Edited: Site5’s service has deteriorated recently. I do not recommend them anymore.
