In Part 1 of this post, I focused on two major elements – how to find your niche, and how to identify profitable affiliate products to sell. I’ve also recently read a pretty interesting post by Yaro Starak on Using Paypal stores to find hot selling products.

This may be a good place to seek for affiliate product ideas. However, internet marketers also need to bear in mind that these areas may already be competitive, and they need to implement strong traffic generation strategies to obtain the same results.

How to test Affiliate Products?

The best way to know if a product sells is to test it out in the market. The good news is that you can promote it easily, quickly and for free with blogs. Personally, I like to use Blogspot.com as it’s owned by Google, which seems to give it a preference in terms of getting listed on search engines rapidly.

Here are 5 essential steps in setting up your blog for affiliate product testing:

 1) Identify a set of keywords, related to your affiliate product, that you can optimize easily.

 2) Use a free blog site to set up your blog. Try to include your main keyword in the your blog domain name.

 3) Write at least 3 posts, all different, about your affiliate product or the industry. Remember to have your keyword on the title of the post, and within the body text. Include links to your affiliate products sales page in your post.

 4) Draw traffic to your blog through social bookmarking, social networking, ezine article posting, as well as building incoming and outgoing links.

 5) Be sure to test the number of clicks your affiliate link gets, as compared to the number of sales you make from your affiliate product. On average, it takes about 200 clicks for one sale to be made. If your product does not sell after 200 clicks, it may be time to move on to test the next affiliate product.

 Using promotional material

Some publishers provide you with attractive banners that you can place within your blog. While a visual representation of your affiliate product is great, I’ve found that using banners alone is less effective in getting clicks, or even closing a sale.

At the end of the day, it’s always best to promote your product by giving your honest opinion of the product, without being overly pushy. Try to tell your customers about their problems, and how this product can be a solution to them.

What affiliate products SHOULDN’T you promote?

 1) Product with low commissions

In an online business, the same amount of effort is needed to promote a product which gives you $5 in commissions, as another giving you $50. Thus, it makes more sense in selling the high value affiliate product than the low value one. As your business grows, you may even want to move away from free traffic generation strategies, to Pay-Per-Click promotion. One of the best books I’ve read that explains strategies needed to lower Cost-Per-Click and to increase the number of impressions would be Mindvalley’s Adwords Winner’s Playbook

Without a clear outlined strategy, internet marketers are just wasting their money on PPC, without being able to produce the expected results. Read my Mindvalley’s Adwords Winner’s Playbook review for more information.

2) Product Quality & Seller Reputation

One of the challenges with Affiliate Marketing is the limited control affiliates have over the quality of the product they are selling. Low quality products lead to customer dissatisfactions, and high refund rates.

Unfortunately, Clickbank.com and many other affiliate networks do not include refund statistics. Affiliates would need to evaluate products on their own, or run the risk of losing commissions due to refunds.

Nevertheless, it’s natural for new start-ups to experience mistakes and disappointments when we are first starting out. Taking risks, and trying things out without know the outcome, are all part of being entrepreneurial. After all, the beauty of affiliate marketing still lie in the relatively low risks involved.

What’s next after you have found a successful affiliate product?

Well, you have several options:

• Buy your own domain and create your own website to promote a range of affiliate products
• Create a similar affiliate product, post it up on affiliate network sites, and get other affiliate to promote your product for you
• Cross sell related tools and products, such as spin-offs, online training, or just being a mentor
• Be on the long term lookout for new affiliate products to promote. But I guess everyone needs to look into this as the marketplace is in a constant flux.

Next: Part 3 - A Review of some affiliate network sites