04 – Fall 2004 – Page 2

The Craze Of Holidaze

Amin Mirza is nervous about the holidays.

“I’m not going anywhere,” says Mirza, an affiliate who started PhatDeal.com in his home this May. “I plan to stick by my computer.”

Mirza hasn’t experienced the holiday rush before, because this is his first year as a fledgling affiliate. Last year his family journeyed to California. But this year he wants to keep an eye on his business and so he isn’t taking any trips during the holiday season. He will stay firmly planted in Chicago.

Mirza isn’t alone. Even seasoned affiliate veterans worry about the last three months of the year and stay glued to their machines 24/7. Many forgo travel during October, November and December.

Yep, it’s that time of year again when online retail goes crazy. Most affiliates are fretting over how to get the biggest bucks from the mightiest merchants. The opportunity is enough to stress anyone out. “Three words,” answered an affiliate when asked about the holidays. “Sleep is overrated.”

Unfortunately, you can’t stay awake for three months straight. Whether you live by yourself or have a large family living in a crowded city apartment, the holidays present challenges and opportunities for affiliate marketing. But just because you work from home doesn’t mean you have to sacrifice the season. Yes, being self-disciplined is a challenge, especially during the holidays. Here are a few tips to keep in mind.

Don’t Take Your Work Home

“Working from home is tough!” says Dan King, founder of Career Planning and Management Inc. in Boston. “The mailman comes, the fridge calls. It’s hard to mesh, particularly if you have kids.” To be sure, your home may be where your office is, but that doesn’t mean you can’t compartmentalize. It’s difficult, but doable.

“We have this huge predicament,” says Julian Redwood, a life coach and counselor based in San Francisco who works with many entrepreneurs. He says his clients struggle to establish a structured schedule. “When you work for a company you have a lunch hour and a quitting time of 5 p.m. Self-employed people end up eating meals at their computers. Our computers suck us in, in an amazing way.”

But Redwood emphasizes that working- from-home stress is manageable. He suggests that people decide when they are going to work, when they are going to exercise, when they’ll have social time, when they’ll have time to just veg.

Philip Humbert, a personal success strategist in Oregon, agrees. He suggests that affiliates first get clear on their values. “I don’t wanna mess with dinner for money!” says Humbert, who is an Amazon affiliate. But he recognizes that other people might feel that it’s important to spend time away from family to generate revenue for the family.

Whatever you decide, first get clear with yourself, then inform the appropriate people in your life. That way, you manage everyone’s expectations. “Once you’ve decided how much time you are going to dedicate to your business and to your personal obligations, clearly communicate your decision,” advises Humbert. “Clarity is power.”

Other experts agree that communication is key. Those who decide to take 10 days off, for example, need to tell loved ones that the decision costs money but provides time. Likewise, those who decide to work through the season should describe the tradeoffs. “Explain to your kids that the vacation they went on last summer was paid for by your work,” says Michael Angier, president and founder of SuccessNet.org. “Don’t assume people understand; give them a vision of your business and enroll them in the dream.”

If you have kids in the house, keep your workspace sacred. Everyone should know that when you are at your desk, you are working and working for a reason.

After you make your decisions and spell out your priorities, stick to them. You might have to log on from your in-laws’. You might have to take a break to entertain if you stay at home. Either way, you can’t be at your machine all day. But try to make a little time to maintain your site.

Learn From History

You may feel overwhelmed because the holidays are starting earlier every year. “It used to be that consumers started shopping only four weeks before Christmas,” says Jupiter Research’s Patty Evans. But last year saw an expanding of the holiday season, a trend she believes will be repeated this year.

If consumers are shopping earlier this year, you’ve got to be ready to offer them the goods they want when they want them. That means you must do your retail research now. Think about which merchants you have had the best results from in the past. Generally, the companies that are doing well for you now will do well throughout the holiday season. Then see what they have planned for the end-of-the-year deals and closeouts. Look at what e-tailers have to offer, figure out what products are popular and heavily promoted.

Then, weed out the winners. Think about your audience and try to figure out what has appealed to them in the past and what might appeal to them this year. Then you can select the best stuff for your site. Figure out what the killer deals are. Don’t try to give space to every promotion. You have to pick and choose which babies you are going to nurture.

You can also give yourself a gift this year by learning from your own work history. Michael E. Gerber, author of The E-Myth, encourages people to document everything they do throughout the day – made this call, put up that link, did x, y, z – so they gain a clear perspective of how they really spend their time. You might be surprised at how you organize your day and might even retool how you organize your business.

Be An Ant, Not A Grasshopper

Luckily, you can prepare in advance. Remember the story about the ant who worked in the summer to prepare for the winter? Affiliates should be getting their holiday game plan figured out well in advance of the onslaught.

Promos won’t be spidered if you do it all at the last minute; point out numerous affiliates. They create shells of pages so they can be in the search engines. You can always fill in a particular deal as it happens or changes. This method works to let you relax during the fun season.

Pay attention to which merchants are offering bonuses. You might want to plug them in your email newsletter or do something to promote them. After all, they are offering you a nice incentive to do so.

Affiliates complain that the downside to holiday e-tailing is that merchants often put time limits on their deals. They might have something that is good “through the weekend” or good for “two days only.” Depending on what is going on in your offline life, you might not want to put the energy into the deal just to remove it a couple days later. If something is a hassle, skip it and pace yourself.

The top advice from affiliates Revenue talked with? Make lists. Prioritize. Work ahead. Have a to-do planner calendar. Write everything down. Commit to tasks that are mandatory. Then follow through.

Don’t Fly Solo

If you don’t have a busy social calendar, you can probably devote more time to improving your site and gaining on your competition. If you are feeling isolated, get connected.

If you are stressed and sick of staring at your own walls, take your laptop and cell phone and head to a coffee shop. It’s a great way to be around other people who are working for themselves or working through the holidays. If you are ahead workwise and moping because you are missing out on holiday office parties, throw a party for some colleagues or even volunteer at a soup kitchen and you’ll feel better.

You might also want to do a little online networking. Chat with online friends. You could learn something new or hear about a great new merchant or deal. And knowing that other affiliates are out there in the same boat can do a lot for your psyche. Check in with a friend and keep each other accountable for keeping work and personal commitments.

Set Up Boundaries

Many people feel compelled around the holidays to do too much. But affiliates cannot do it all or do it perfectly. Accept your limitations and focus on what you really want to do.

Many merchants increase affiliate contact during the holidays to announce special deals, offers and sales. Many affiliates who normally get one notice a month from a merchant, which is standard, get three or four around the holidays. So they need to be near their in-box to easily check on merchant’s notices and to switch out graphics and post links on specials. The payoff? Many affiliates say their businesses jump three or four times its norm during the holidays.

However, you still need to take time off. Redwood recommends stretching and yoga as stellar stress-busters.

“We have this misconception that if we work more, we’ll be more productive,” says Redwood. “You don’t have to set aside huge chunks of time. Even five minutes away from your desk every hour can go a long way toward sanity. Even three deep breaths away from a monitor can make a difference.”

“It’s hard to say no because we want to do it all,” says Redwood. “In our society, it’s hard to disappoint people. We feel like we have to show up to every party and bring the egg nog.” It is the season of giving, but you need to give to yourself, too.

Be Loving To Yourself

Expect that the one person who won’t be happy is yourself. You might think, “Oh, if I only had 20 minutes more…” You need to have self-discipline but you also need to hold yourself accountable and work only during the time that you’ve allotted.

All the life coaches interviewed emphasized that you need to take care of yourself and your health. Maintaining a healthy diet will do wonders. You’ll have a better immune system, you’ll handle stress better, you’ll have more energy.

“Watch out for sugar, alcohol and caffeine. Those things decrease our ability to deal,” says Redwood, who suggests moderation. “Tell yourself, ‘Tonight I’ll have one sweet thing, but no drinks!’ or ‘One drink, but no sweets.’ Sometimes you’ll want to go all out on everything. That’s OK every once in a while, but notice how your body handles it, listen and be aware.”

And don’t forget you are supposed to be enjoying life, too. So schedule time for shopping, wrapping gifts, decorating and sending out season’s greetings. Your personal life is more important than your business life sometimes.

“You can’t spend every waking moment on your business,” agrees Rickey Gold, a Chicago-based marketing specialist. “You still need a life of your own. Otherwise, you’ll burn out.”

But you can do bill paying or holiday shopping online, which will keep you close to your business. But at a certain point, the game is over.

“You have to do a lot of work before the onslaught,” suggests affiliate consultant Linda Woods. She knows a lot of affiliate managers who never leave their desks around the holidays. But she thinks that the affiliate managers themselves have an advantage, because they can plan in advance and then enjoy all the wonderful holiday festivities.

Merchants are incredibly busy around the holidays because they have fulfillment worries. “Affiliates don’t fulfill, they just drive traffic,” points out Woods. “So the really good affiliates decide in October which merchants they are going to promote and spend time getting Google rankings. Once the links are in place, which should be done by mid-November, they can sit back and work on optimizing.”

But affiliates, whether they are ahead of the game or working assiduously through the new year, need compassionate employers.

“Be a good and gentle boss to yourself,” says Humbert. “After all, what sort of Scrooge would expect you to work on the holiday? Why do that to yourself?”

DIANE ANDERSON is managing editor of Revenue.

Coupon Hoopla

You’ve been there. You’re at the grocery store to buy one single item. You have your groceries on the counter, your cash in your hand. But the person in front of you has a never-ending stash of coupons. The cashier enters in code after code. You start looking for an open clerk, cursing the customer ahead of you.

Well, coupons aren’t nearly as annoying online. Frugal shoppers can save money in the privacy of their own homes, redeeming as many coupons as their hearts desire. And it doesn’t slow other shoppers down one bit. Everyone wins. Especially people like Mike Allen.

Allen not only has an eye for a bargain, he loves to offer good deals to others. “I saw that coupon codes sure could save you a lot of money,” says Allen, who speaks in a slow, soft Southern accent. “But they sure are hard to find.” That’s why he decided five years ago to devote an entire Web site to online coupons. Shopping-Bargains.com features 500-plus merchants.

Coupon sites say their revenue varies widely month to month, but some gross more than $10,000 a month and the ones contacted by Revenue say they’re expecting a whopper of a holiday season. EdealsEtc says months in the fourth quarter sometimes result in six-figure revenue.

“Q4 is always good for us,” agrees Joel Comm, who runs DealOfDay.com. “But 2004 is gonna be the best year for coupons so far.”

The uncertain economic outlook combined with a long-running trend toward value shopping has created vast opportunities for affiliates to promote sales by providing coupons to people who just can’t live without them. In 2002, according to Forrester Research, consumers downloaded 242 million grocery coupons, coupons they print out and take to brick-and-mortar stores. That’s almost one coupon per American, and that’s just for groceries.

A raft of online coupon sites exist. Large sites like CoolSavings and CouponCart.com let you print coupons to redeem in offline stores. Others like FatWallet, UPromise, Spree.com, eBates and KeyCode offer cash-back incentives or rewards to shoppers. If a merchant gives an affiliate, say, a 5 percent commission, the affiliates might pass on 2 percent of that to their customers.

But even the sites that offer savings on online purchases range from small niche hobby sites to larger companies like CouponMountain, which employs eight people in Los Angeles, has 750 merchant partners and does a lot of marketing. And with about two-thirds of the US households now online, there’s still plenty of room for affiliates who can build a site that rises above the crowd.

Adam Schwartz and Craig Nelson were eating sushi in San Francisco and saw an ad on the window that read: “See our coupon on the Internet!” They thought online coupons were a great idea and started CouponSurfer in September 1998.

Brad Wilson started DealsDuJour.com with his brother Campbell in 2001. The 20-something brothers bought things, mostly electronic gadgets, online and when they scouted a good deal, they told their family and friends about it. Their hobby started as a pastime, soon blossomed into an email newsletter and then later became a business.

How many sites are devoted to online coupons? A lot. DealzConnection tries to list destinations for online bargain hunters. It lists 42 with forums, 41 that have price comparisons and 232 other bargain sites, plus 104 dead sites (not all coupon sites survive).

Site Design

As in many other areas of affiliate marketing, design is critical. Having a home page that is fresh every day is a great start. The best coupon sites list the deals in a variety of ways so that consumers can easily find what they want.

Many have current deals ranked and listed by popularity. New coupons occupy their own space; expiring coupons are placed somewhere else, so users can find deals before they’re no longer valid.

Many sites let you search alphabetically by merchant to find the store you prefer. And most have a category breakdown, so you can scan that to find a coupon for a gift for your Aunt Hilda’s birthday, whether you are looking to get her a karaoke system or a trip out of town.

Affiliates need to think more about aesthetics and the user experience. “Sites aren’t making it appealing and clean and idiot-proof,” says Wilson. “I sit my mom down. She is absolutely useless online. I see if she can make it through the user interface and if she can navigate, then we go with it.”

“A simple interface that has agreeable color schemes is important,” agrees Travis Bowman, president of EDealsEtc.com. “You also need to optimize for speed and test for speed and multi-browser compatibility. A good logo is also critical.”

But design and navigation aren’t the only considerations. Deals are ever-changing, and keeping up in the coupon biz definitely isn’t for the faint of heart.

Update Your Deals

“You cannot neglect it for one minute. You have to be on top of it,” warns New Yorker Abe Rapaport of JumpOnDeals .com “There are merchants whose coupons are expiring. Others are putting new deals out there. Customers contact us with their concerns. We have to keep up with all of them.”

Keeping up and using legitimate coupons is a full-time job. There’s nothing more frustrating to consumers than taking the time to pursue an offer that already expired. Burn your customers, and you’ll burn yourself.

“You need to link deals into a searchable database,” offers DealOfDay’s Comm.

Shopping-Bargains.com’s Allen and his wife revamped their site and hired ColdFusion programmers to help make the static site dynamic with a database that automatically schedules coupons to expire. Since they relaunched in January, keeping the site updated has been “dramatically easier,” says Allen.

“Users expect accurate and current deals,” says Allen. “They want a comprehensive listing. It’s very hard work to keep merchants happy and users happy.”

But once you have a site that is designed well and is updated regularly, you’re ready to tell people about it.

Marketing Moxie

Sites that focus on online deals must do a lot to separate themselves from the pack. Wilson says his goal is to give consumers the better things in life at a better price. The company’s motto: “Shop smart, live rich.” Wilson says it still takes a lot of work to get attention.

“Paid search can work but you really need the right metrics,” says Wilson. “Search engine optimization is incredibly competitive but it’s always worth the effort.”

Many of the affiliates contacted by Revenue simply love search engine optimization. Tagging pages properly isn’t easy, and getting someone with expertise to help can be expensive. Bidding keywords and buying PPC advertising – Google has a 5 cent cost-per-click minimum; Overture has a 10 cent minimum – are also tested tactics. But they aren’t for everyone.

“Keyword placement is too expensive for this niche,” argues Comm. Instead, he’s syndicating content. That way, his site gets double the exposure, and search engines are twice as likely to pick up his pages.

A few sites like PhatDeal.com and eDealsEtc.com say they are even considering buying offline advertising -newspaper ads, billboards or radio time in their local markets to attract traffic, a tactic described in Issue 3 of Revenue (Beyond Search Engines).

The smart coupon sites also let you sign up for an opt-in newsletter that gives shoppers links to popular deals, turning first-time visitors into repeat buyers. And many use “Tell a Friend,” which lets users click on a link and do the viral marketing for them.

“The best is when an affiliate manager recommends us to other merchants,” says Bowman. “Word of mouth works for consumers as well as retailers.”

A few sites have added email notification systems that help convert browsers into customers. Bedford, Mass.-based CouponSurfer.com has set up a “Coupon Butler” service that informs users when a particular product they are interested in is available at a discount. Such newsletters and notices help.

But the best means of attaining visibility? Word of mouth. “The goal is for people to have an easy experience, become repeat visitors, sign up for emails and tell their friends and family about us,” says Wilson. “One of these visitors is worth five of the other kind.”

Everyone loves loyal customers. That’s why many sites encourage visitors to click a link to bookmark their sites as a favorite, sign up for an opt-in newsletter and tell a friend.

DealsDuJour.com recently received the Titanium award at the LinkShare awards ceremony, which Wilson says has helped it to garner a lot of positive attention. Mentions in the press don’t hurt either. Dan Baxter founded DealCatcher.com, which gets 3 million page views per month and promotes more than 500 merchants. He says appearances in the The Wall Street Journal, PCWorld and USA Today have been boons to his business.

But even if you get the best media attention and the greatest industry awards, you are still going to have to work hard. Your challenge is to get people interested and coming back. Content is important, too.

“You have to save your members either time or money or both time and money,” says CouponSurfer’s Schwartz. “You have to offer them value.”

Thinking about your audience is the key to success in the discount game. Luckily, online retailers are always trying to invent and offer new promotions. DealsDuJour.com’s Wilson has witnessed an increase in merchants in 2004 getting their holiday marketing plans in place earlier this year.

Work With Merchants

“I’ve been impressed. Merchants were already concerned in July about Q4,” says Wilson. “The usual suspects think ahead. Overstock.com and those guys are really focused on affiliate channels.” Then again, Overstock.com has 10 people focused on affiliates (see story page 40). But other merchants would be wise to think about offering discounts and disseminating deals.

“Merchants mistakenly think people will buy no matter what,” says Rapaport. “But if you aren’t offering deals, your competitor is. So you really need to offer coupons to people.” Rapaport suggests giving visitors a variety of coupons from which to choose – whether it’s a dollar amount off, a percentage off or free shipping. “Test and see which codes do better,” he says.

So what sorts of deals perform the best for merchants? Rapaport thinks free shipping offers are better than no special offer at all, and JupiterMedia’s Patty Evans hails them as a great deal to offer, especially this time of year.

“Free shipping is the master plan. It is consumers’ top concern; they react to it better than other discounts, even if they aren’t saving as much as they could with different offer,” says Evans. “It’s tangible and definitely priority around the holidays.”

Work Around The Clock

“It’s a juggling act,” says Joel Comm of DealOfDay.com. “It’s nearly impossible to keep up with all the offers. There are so many merchants and there’s so much competition.”

Maintaining a coupon site is so much work that Mike Allen realized last year he needed to make a choice between his job as a marketer and his job as a governmental training specialist at Mississippi State University. So he quit his university job and devoted himself full time to being an affiliate this year. Because he has four kids at home, he had to rent office space. “It’s too noisy at home,” he laughs.

And the business has ups and downs. Online savings affiliate sites see their business fluctuate with retail cycles. It’s not predictable income, and you have to be prepared to work when the shopping fevers strike.

“This is the hardest easy money you’ll ever make,” says Allen. “It’s only easy because you aren’t sweating.”

Keep in mind if you want to dance in the discount disco, you better be ready to work your tail off. There’s no break in this business. Says Rapaport: “We will be here on Christmas and the day after doing the after-holiday sales.”

DIANE ANDERSON is managing editor of Revenue.

E-Tailing Wrap-Up

SIX WEEKS. That’s all it takes for many merchants to make or break the retail year. From the day after Thanksgiving – Black Friday – to the Friday after Dec. 31, the holiday rush generates a major part of year-round sales. That translated to $135 billion in gift sales last Christmas, according to the US Department of Labor. An estimated 8 percent of those sales occurred online, leaving affiliates with a superb opportunity to give themselves a nice little holiday bonus.

Take toy and apparel affiliate SchoolPop.com. "The gift buying season has a significant impact on our sales," says Mary Beth Padian, the site’s vice president of merchant development. "Toy merchants are in our top 50 merchants throughout the year. Every fourth quarter – especially with Disney and eToys – they are in our top 10."

SchoolPop is a donation site that encourages buyers by promising to return a portion of each commission to a school or nonprofit of the buyer’s choice. Yet even it doesn’t rely on feel-good power alone when it comes to cashing in on the holidays. This year, it’s publishing a holiday edition of its new triannual magazine, distributed to 1 million parents through partner schools. "Our editor is writing an article about the hot toys and gadgets for the holiday season, and she’s talking to merchants to get a sense of what is really going to be hot this year," Padian says. "The product impact, especially when it’s contextual like that, should show us a significant lift in our sales over last year." Of course, holiday sales aren’t reserved for toys. Electronics, apparel, music, movies, books, airline tickets and collectibles are all huge holiday categories, often offering deep discounts to help promote holiday sales. For example, top affiliates for Ross-Simons, which promotes itself as selling "life’s luxuries for less," saw their sales double during last year’s holiday season and the company is hoping for a similar experience this year, said affiliate manager Felicia Lesnett. To encourage affiliates, Ross-Simons offers commissions of up to 10 percent for top affiliates during the holiday season – that’s double the program’s base commission during the rest of the year. Affiliate sales make up about 20 percent of the company’s total online revenue.

Just two years ago, the Internet was still viewed as a relatively high risk channel for Christmas shopping. Who can forget the horrors of Christmas past when sites crashed, orders weren’t processed and Santa missed the big day? The cybermalls have gained a lot of respect since then, according to Patrick Gates, AOL’s senior vice president for e-commerce. "We are finally seeing a true shift from offline to online," he says. "The pie isn’t getting bigger; people are shifting share."

ComScore Networks estimated online sales increased 35 percent to $18.6 billion in 2003, up from $13.8 billion in 2002. Sixty-four percent, or $12 billion, of that was made between Nov. 1 and Dec. 23. "November and December are humongous, humongous months for us," said Jennifer Willis at ShopForChange.org, the affiliate sales site for Working Assets. For the past few years, it has promoted its seasonal clothing – things like books through Powells.com and apparel through LandsEnd.com, of which half of the affiliate commissions go to nonprofit causes – through a holiday newsletter. The newsletter is stocked with listings for merchants, descriptions of promotions, free shipping options and a reminder to shop there first. This year, even without a newsletter, its now-established reputation as a site for gifting means that if people need to do holiday shopping "they sort of know to click over to us at ShopForChange," Willis says.

Certainly, Internet shopping is cutting into department store sales thanks to such features as convenience, wrapping and shipping. But the online market itself is also shifting. Home entertainment and travel are heating up while apparel and toys are losing share. Gift cards, offered by nearly every major merchant, are a dominant trend. Now that merchants have seen the strong improvement to their bottom lines as a result of gift cards, the push is on for holiday 2004. But watch out: Some merchants offer little or no commission on gift card sales.

"Gift cards were a $20 billion business last holiday," says Lauren Freedman, president of The E-tailing Group in Chicago. "No one returns a gift card." And when you sell these, chargebacks can become a thing of the past. You can increase dollar amounts on card sales by pushing specific cards for specific uses, such as an entire January back-to-school wardrobe from Old Navy or a complete computer system from Office Depot. You can also promote gift cards as "the perfect gift for the undecided."

The Humbug Factor

Although the 2004 gift buying season looks strong, sales may still be affected by the economic outlook. When times are tight, so are wallets. That’s why comparison sites are predicted to be the biggest winners during the 2004 holiday season. Affiliate Ben Chui predicts sales through his comparison shopping site BensBargains.net will be "huge" in November and December because of his reputation as a bargain hunter. "I find the best price on any particular day on numerous products, and that resonates well with people right now," Chui says. "If you go into a store and everything there is the cheapest you’ve ever seen it, I guarantee you they will be coming back." He doesn’t have a newsletter, doesn’t send out emails and doesn’t pay for search engine placement. His firsttime visitor traffic is driven by natural search, message boards and word of mouth. The rest comes from people that have his site bookmarked. Yet he’s still able to pull in an excellent income from the work he does finding promotions and searching for best prices by hand, without the aid of software. Although he holds a master’s degree from Berkeley, he’s now "doing this full time."

Even with the uncertain economy, the number of first-time shoppers on the Internet continues to grow with the richest households expected to register the largest increases in holiday expenditures. "Here we’ve got, now more than ever, more people familiar with how to buy online and more ways of doing it than ever," says Carol Baroudi, an analyst at Baroudi Bloor International in Arlington, Mass. "More and more people see less and less reason to go to the mall in a crunch."

The way to a holiday shopper’s heart is in the details. Holiday Retail Strategies 2004 from Packaged Facts, a publishing division of MarketResearch.com, concludes the things that will help e-tailers are: unique products, wide variety, a strong reputation, a holiday atmosphere and a consumer confidence in their ability to take orders securely and ship them in time for the holiday.

Shopping For Shoppers

Of course, getting people to your site takes work, but try the five key strategies suggested by Packaged Facts. Differentiating your site can be done through links or landing pages specifically for your audience. "We help people find science fiction and fantasy books that are hidden in plain sight on the merchant’s site because they don’t know how to get there," says Olivier Travers, owner of Portugal-based SciFan.com. December is SciFan.com’s peak selling month. "We spend a lot of time hunting for books in a series, and finding the reading order. That’s information you hardly find anywhere. It’s very important for us not to just be another price and comparison tool, because we think you can find that in other places. What we want to do is provide some context on the books that you can’t find in other places." This brings up another differentiation strategy: offering products not readily found elsewhere. Your site could either be the only one with a hot toy, for instance, or the only one that still has it. "A lot of times what happens is shoppers buy the hot product early, and it starts to sell out," Freedman says. "When it gets down to Christmas, you could be the little guy that has it."

Try to develop a decidedly holiday atmosphere. Change site background colors or selected text to red and green, or apply other holiday color themes like white and silver or gold. Create a catchy gift-oriented phrase to use on the home page and all email/newsletter promotions for the holidays. Add themed art such as wrapped gifts, big red bows or evergreen foliage. Place decidedly holiday merchandise on the home page, and replace year-round merchant banners with new ones that focus on the holiday theme. World-Luxury.com is one affiliate that has seen better sales after adding holiday products and services to its home page, ranging from ornaments to Christmas teddy bears. "I start to feature newly released, especially limited edition [holiday] items on my home page as soon as they become available," says Marilyn Olsen, publisher of World- Luxury.com, American-Luxury.com and French-Luxury.com. "Last year I started in September and had good sell-through immediately, particularly in the smalledition, hand-crafted items." Olsen uses product photos provided as affiliate creatives at Gumps.com and Macys.com, which also takes the holiday theme one step further for its affiliates. "Our whole site will have a holiday theme, with gifts being the main focus," says Alison Zemny, Macys.com’s director of marketing. "We’re known for our in-store Holiday Lane, hundreds of different trees decorated in different themes. This year, we’re taking that online, with holiday dinnerware and servingware, ornaments, decorations and home décor – even more selection than we have in the stores."

Increase selection beyond one product category. In books, add upsell items like bookmarks and reading lights. In apparel, offer ideas for ensembles down to jewelry and shoes. In home, offer complete holiday table settings from napkin rings to centerpieces. In electronics, cater to every age group on the gift list. Macys.com took this suggestion. This holiday season it has added several new merchandise categories, many not found in its stores, including MP3 players, TiVos, DVD players, a wide selection of children’s apparel, toys and gourmet food gift baskets. "What we will be working on with affiliates is some sort of special holiday gift promotion for them that focuses on our holiday gift assortment," Zemny said.

Lesnett, the AM for Ross-Simons, says her top affiliates smartly position her links in multiple categories, which makes sense because the company sells a wide range of gift ideas ranging from tableware to jewelry. "A lot of times, opportunity is missed because affiliates think you’re only in one particular category. So we’re looking at where we’re placed on their sites and we’re trying to optimize their sales, and our sales," she says.

Build consumer confidence. How do you get it? The merchants you work with will obviously need to use a secure server for the credit card process. They’ll also want to have a posted shipping policy and a reputation for shipping on time. You can check out how consumers have rated shopping sites at Shopping.com’s Epinions section or BizRate.com’s "Store Ratings" search drop-down option. "Merchant ratings can really be a factor," Freedman says, noting that if there’s "a product that’s $50 cheaper, but from a site that’s rated only one star, then consumers don’t want to chance it."

Consumer confidence also comes from having a site that’s easily navigated and quick to respond, with merchants who offer the same. "We have to pay more attention to the behavior of a site at peak; if people get frustrated, they leave," said retail analyst Baroudi. "Seconds count in terms of transactional fortitude." Make sure the site is optimized and graphics are at the lowest DPI or the most effective resolution. Mitigate extremely heavy traffic by bringing functions closer to the user with intelligent routing software such as Akamai’s EdgePlatform, or by allowing seasonal capacity with on demand infrastructure from providers like IBM or DEA. "This is the season that makes or breaks," Baroudi says. "If you can’t handle the peak load in season, you may as well not bother."

Another factor to consumer confidence is guaranteed pre-Christmas delivery. Macys.com, for instance, guarantees Christmas delivery if ordered by midnight Dec. 21. "We’ve worked very hard with our fulfillment centers so that the customers can order up to the last minute," Zemny says. Consider posting holiday shipping cutoff points by your merchant links, then capitalize on late buyers by posting which sites offer express shipping. Consumers will be looking for that.

Customers also use a slew of other factors to judge whether they’ll shop your site or your merchants’ sites for gifts. These factors are product availability, gift wrapping, good return policies, Web research, informational pieces, whether or not they get help with gifting ideas and shipping options. One e-tailing study found only 30 percent of gifting merchants offer gift wrap or boxing.

"Make your suggestions, merchandise by price point and recipient type and have an aggregated gift center on the site, so there is one specific location for gifting," Freedman says. "Then it gets down to things like gift cards and gift wrap, but that really depends on the merchant."

Establish your site as a destination for gifting. Gap.com did that with its 2003 theme: "Get it. Give it. Gap." Barring a snappy slogan, there are a number of ways that affiliates can effectively lure gift buyers. The biggest producers use "gift idea" newsletters, gift suggestion pages on the site and the purchase of gift-oriented keywords in major search engines. Eighty percent of the gifting merchants in a recent E-tailing Group study already had gift centers and provide gift suggestions. This year, even sites like SciFan.com may take advantage of this feature.

It’s considering the addition of an online "gift list" of science fiction books site regulars could buy to introduce their children to the genre. It also helps to affiliate yourself with sites already known for their gifts. Affiliates for The Sharper Image, a quintessential gift buying destination, "tend to give us premium placement during the holiday because it pays off," says Roger Benton, its senior vice president of marketing. "And because we have an eclectic assortment that covers many shopping categories, we often get multiple placements."

You can also build your reputation as a gifting site, and your email list, with automated or personalized messages – similar to standard refer-a-friend features – that let buyers send notes to recipients alerting them that their gift is on the way. Seventy percent of the gifting merchants reviewed by E-tailing Group already offer this service, but affiliates have been slow to take advantage of this opportunity.

Another idea is to change the text on your search bar to "Gift Search" during the holidays. An E-tailing Group survey of 10 well-known gift-oriented Web sites found that all 10 had a keyword search, six offered advanced search and six also specifically offered gift search. If you don’t already have a search bar, consider adding one. Many merchants now offer them as part of their creatives. Search bars that will look for related text on the site can be downloaded for free or at minimal cost online. If you are building your site in FrontPage, Microsoft also includes a search option as part of the program.

Your sales don’t have to conclude when you reach Dec. 23. Thanks to gift cards, January is a huge month for continued sales. Packaged Facts reports that price points aren’t as big of an issue during this time, because gift cards are often treated as "found money." Drive traffic with "Use your gift cards here" promotions, and make it easy for your visitors to redeem their cards by grouping products by standard gift card price points: $10, $25, $50, $100. Hunt your merchant sites for markdowns and any after-Christmas shipping or discount promotions. Some merchants are even getting ahead of the game by feeding discount codes for after-Christmas sales to you. The Sharper Image just instituted a program called "Hot Deals," which feeds its coupon affiliate sites with closeout offers on specific "end-of-life" products. It also offers closeout deals in its outlet store at SharperImage.com.

The weeks after Christmas aren’t just a time for closeout sales. It’s also a time for fresh merchandise. Found money, after all, often goes toward trendy items – and trendy translates to hot merchandise not offered pre-Dec. 25. For instance, AmericanEagle.com rolls out its spring merchandise on the day after Christmas – a savvy and intentional move to capture gift card sales from the trend-conscious set. "The most important thing is constantly updating, usually daily, and featuring the best that I find on my home pages," says Olsen, who maintains three luxury apparel and gift sites. That also means removing any out-of-stock items.

Whatever type of site or categories of product you have, the same rules for successful 2004 holiday sales still apply. Those sites that want to improve holiday sales will have: different products from their normal year-round assortment and their competition; a gift destination identity; a decidedly holiday atmosphere; multidepartment gift participation; and customer confidence in an affiliate’s site and their merchants.

SchoolPop, meanwhile, is already taking these lessons to heart. It launched its first gift-themed section for Mother’s Day, followed by back-to-school. It’s the same tab at the top of the page, but with the title and content changed for each promotional period. "So far this promotional page has worked really well, so I’m excited to have it for the holidays," says Mary Beth Padian from SchoolPop. "For anyone running around shopping for the holidays, it’s always good to have some place to go to get ideas."

JENNIFER MEACHAM is a freelance writer who has worked for The Seattle Times, The Columbian, Vancouver Business Journal and Emerging Business magazine.