WHAT IS AFFILIATE MARKETING



Affiliate marketing is the promotion of another person's or company's product, in which you get a percentage of the profit if a sale is made.  That doesn't sound so hard, does it? Well -- it's doable if you have the information you need to get you started in affiliate marketing -- and it is work. Two things to remember: 1) don't expect to get rich fast; 2) it is like an offline business, only online. And yes, an online venture can be home-based and it can make you a good income over time if you put the work into it. But again, don't expect big profits overnight--there is a learning curve that you have to go through first.

WHERE DO I BEGIN

First and foremost, you need a passion?  If you are passionate about something, it makes it easier to handle the frustrations with starting an online business, and to  keep moving forward. 

You can get into affiliate marketing with or without a website, but it is getting more difficult to do so with the changes that Google has put into place. But if you are serious about making a career online, I would suggest a website would be far more beneficial. Why? You have a place to call home -- a landing page that allows customers to find you online.

On the merchant side -- a lot of merchants require that you have a website -- they will do checks on your site to see how you are promoting their product and if you are staying within their marketing guidelines. For merchants this is important facet of doing business online, because they do not want to be penalized by Google or the other search engines if their affiliates are spamming. Thus, if you the affiliate see strict spam guidelines, you know that the company or owner hold their product or service in high regard.

Getting Your Affiliate Business Up And Running

How do you get started in the Affiliate Business? First, I would like to say, an affiliate business is just that, a business. You will have to work hard, as you would with any brick and mortar business. What are the differences? 1) You're online; 2) Your words are important online - it is through words that determine how you will be received and perceived by those that visit your site.

If you are new to the game of an affiliate business-be prepared to except the fact that you have a "learning curve deficiently" and will need to absorb as much information as possible, as well as experiment. But it is doable.


Setting Up an Internet Business

So what are some of the nuts and bolts of setting up an Internet business? 

1) Register your business name with the city government. Since this is a legal document, expect to pay a fee.

2) Apply for an Employer Identification Number with the Department of the Treasury. To file for an EIN, you will need to complete Form SS-4. You can find the forms in post offices, public libraries, or online. (This document identifies you 
and your business with the U.S. government and you will need this number when you file your taxes. So put it in a safe place.)

3) You should also check with your State Government to determine what additional special licenses you may need.  Such as Retail Sales Tax Permit -- if you are planning on selling items offline or online.

Note: For an affiliate business the sales tax permit will not be necessary.


Paying Taxes

You will have to check with your State and determine if you will have to pay taxes. For now, I will assume that you will be paying quarterly state and federal taxes.


Federal and State Estimated Taxes

You will be required to pay federal and state estimate taxes on a quarterly basis.
The first year in business will be a little difficult in determining your taxes because you have no idea how much money you will be making.

However, keep in mind that you will only pay what you owe against that of your expenses (your net income). For example, if your best guess estimate is that you will have $3000 in expenses during the year -- and you believe that in your first year you will bring in $6000-- you would report the following:
.
$6000 (Money Made)- $3000 (Expenses) = $3000 (What you owe)

Thus, you would pay taxes on the $3000 to your state government and federal government in quarterly installments on the $3000 you earned.


Other Things to Consider With Your Estimated Taxes

If you find that you are doing better than you thought-and you are making more money, and you have paid in for one quarter -- you will have to adjust the balance and divide it between the remaining quarters.

However, you are not required to make estimated tax payments if you did not make enough money in that quarter. That being said, if you don't make your first payment until a later period, you must divide your entire estimated tax by the number of payment dates remaining.

For example, you have three payment dates pending, you would pay one third of the total tax by June 15, the other third by September 15 and the last by January 15.

To obtain more specific information you can read IRS Publication 505: Estimated Tax payments.


When Are Estimated Taxes Due?

Estimated Taxes are Due on the following dates:

April 15
June 15
September 15
January 15

Note: If you have any questions, or unsure about anything, you should enlist the help of a CPA.)


Home- Based Business Expenses

For the single proprietor there are some expenses that you can take off for your business. 

1. Home Mortgage.- No you cannot take off your whole home mortgage. You can take a portion (percentage) of your home mortgage off if the room you are using, is used solely for the purpose of conducting your business. So how do you determine the percentage of your home mortgage that go toward your business? There are two different methods:

1. Number of Rooms
2. Area Method