Do you remember last year 2007 the launched of the "IM-Myth Report" by Russell Brunson? The report was about how to take online leads offline to increase online profits. This valuable report was given away free in exchange for the prospect's name and email address. Even though they never earn a single cent off the download of this report, It was a different story for their affiliates. By the way I was one of their affiliate in this campaign. It was great profit for their affiliates to earn because every report that was given away the affiliate were paid $1 on the first tier and $0.50 on the second tier.

The valuable report was downloaded through the several affiliates who referred the site to their family, friends and their list of subscribers and customers. They ended up paying large amount of commission for their affiliates that refer people to this valuable free report download.

It was a large amount to just give away, but they were able to make that back and more because they incorporated their valuable free report with the 12 month internet millionaire launch. They knew their strategies and plan well ahead, Plus they were able to grow their list like crazy.

As a product owner, if you know your metrics you can afford to give out a higher commission up front to your affiliates. Here's an example for a product owner. You might pay $100 for the lead but you know you can sell a $300 back end product to a certain percentage of the front end buyers. Again if you know your metrics it is easy. If you don't know your metrics you could lose big.

This works simply because you know that you can make more money on the back end to cover your costs and then some.On the other hand, it's like pay-per-click advertising. You pay every time someone clicks on your ad. If you don't know your metrics, and you pay out lots in advertising and all traffic you get doesn't convert, then it could cost you tons.

If you don't want to risk this much to begin with, you can still fellow this model, but give out higher commission when your affiliates have make a back end sale. To motivate your affiliates to spend their time promoting your product without giving them a guarantee of a front end commission, again it helps to know your metrics when recruiting them. If you are an affiliate you are obviously going to promote the products that are converting the highest.

This means that you want to promote products where you know if you send 10 people to the site, at least 3 or 4 people will buy. You can test this yourself by promoting the product to a small portion of your list and watch your sales. If it converts high, then allow your affiliates to use a copy of the email you sent and let them know the numbers you got. If it converts low, you may not want to push the offer to your whole list until you have made some changes. This is very important.