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Now wanting to SEO it for G, mainly inbound links. But with G's dislike of directories and affiliate sites, how do I source links, except for buying them? Content sites are not keen to link to a merchant as it is viewed as an aff link.
If your merchant site is dealing with a product that is somewhat interesting, you can publish an on-line article about it with links back to your site. This process does take a while to nurture but does have the benefit of a snowball effect.
Other than that, I'd have to agree that buying links is the way to go. It will take some real searching to find low-cost, high-impact relevant links to buy from, especially in a competitive market, but the end result is worth it.
I would say the last ditch effort is to initiate a link exchange program. However you want to be careful since the more links you direct off of your site, the more you run the risk of both losing traffic and IBL vote strength. Lastly, and most importantly, make sure that any link you get has anchor text that targets the keywords you want to rank for. Very important.
On a side note, it is my belief that in the upcoming months the search engines will significantly dilute the strength of reciprocal links, as this is one of the problems they (especially G) has faced with user-friendly navigation, due to the increased number of "link pages" and "link farms" that popped up after the whole reciprocal link strategy was born from the previous algorithm's oversight. This theory however is speculation only and feel free to argue the point if you think I am in error.
There are tons of sites seeing benefit from true directories (i.e. not dmoz clones) and last I checked, many affiliate type sites were doing fine in Google.
>>>[recip links] doesn't impact G all that much, plus may degrate the site's quality
Not true. Plenty of sites are ranking on the power of recips. Recips are not the problem, the ways some webmasters use/gather them is the problem.
Try doing things that aren't so obvious - think outside the box. Press releases, articles, viral do-dads, tools, paid links - there are a ton of ways to achieve links for a merchant who doesn't wish to recipricate.