Affiliate programs have become a standard component of most online businesses. With thousands of companies and dozens of networks offering affiliate programs, it can be hard to know where to begin. Understanding the basics will help you make good decisions as you begin affiliate marketing on your website.

There are three types of affiliate marketers:

• Full-time: Exist solely to promote other businesses.
• Part-time: Employ affiliate programs as a major part of their business plan, creating a significant percentage of their annual revenues.
• Side-line: Promote just one or two companies. For example many promote their Web host, in order to help cover their costs of hosting.

The amount of time required to implement an affiliate program is minimal as these programs will most commonly be placed on your existing website(s), and most programs provide ad copy, images and tracking links. Of course, the most compelling reason to begin affiliate marketing is income generation. So regardless of your type of online business you should at least consider some form of affiliate marketing. 

Monetize Your Traffic:

You work hard to create traffic for your site – you build a busy street. Now, if you create some billboards on this busy street, you’ll make more money. Of course, with affiliate programs you receive payment for creating an action, not just for displaying an ad, but if you can create more revenue from the same amount of traffic – well that just makes good business sense.

Some popular affiliate networks are:

• AffiliateFuel: their advertisers represent the major industries, with criteria that are stricter than Commission Junction (see below).
• Click Bank: primarily digital products, including downloadable e-books.
• Commission Junction: covers every major industry: travel, retail goods, marketing, and even automotive.
• Google AdSense: primarily text ads and payment is for "clicks", not transaction based.

Questions to ask yourself:

As you begin planning, there are some decisions to be made:

• Will I work with just one affiliate network or many?

Initially, it’s often best to choose one, and then expand once you learn what works and what is profitable.

• Will I work directly with the company, or through a network?

Many sites have an "Affiliate Page" on their site, and it’s a great way to choose your favorite vendor and promote them on your site. Because each program has to be setup individually, this can take some time if you need more than a few. With a network, you can apply for many programs at the click of a mouse.

• Do I have the volume to generate significant revenue on clicks alone?

You’ll need a very busy street to realize any profits from click programs. Of course, it doesn’t cost anything to try, but many webmasters learn that transaction based affiliate programs produce better than pay-per-click programs.

• Is my site better suited to specific product endorsements?

If you run an online travel agency, for example, you could also promote travel insurance, luggage, pre-paid calling cards, and other travel related products. Because your affiliate products directly relate to your clients interests, you are more likely to have success, than if you have Google text links, promoting weight loss or home repair services.

• How much control do I want regarding ad content?

Some ad networks ask for a location on your site, and they decide the content. Sometimes it relates to your site, sometimes it’s totally unrelated. Others allow you to choose the specific content, the graphics and message.

• Will the ads I choose fit with both my site design, and my company image?
  • Would I be happy with weight loss products displaying on my financial services website?
  • Or with dating ads appearing on my children’s bookstore site?

• What steps will I take, to ensure that I don’t unintentionally abuse the trust of my visitors?

Some ad campaigns promote services of questionable quality, or even of questionable legality / morality. Your visitors will hold you accountable, so it’s wise to visit the site of a prospective affiliate and see what they offer, if they have a guarantee, etc.

Too see if they are a reputable company run this simple test. Of course, even the best company will get complaints, but notice the volume of complaints. Simply Google the name of the company with the term "complaint" or "sucks" after it. For example: "ABC Company sucks." Don’t forget the quotation marks, and please excuse the choice of words. To see what people are saying, you need to Google with the words they use.

Program Details to Consider:

• Payment details: Some programs pay a finder’s fee – ranging from $0.50 to over $100 per lead or sale. Others offer a percentage of any sales generated from the referral from your site (from 1% up to over 75%).

• How they pay: Some fringe programs might never pay. It's best to stick to established programs, at least at first, to ensure that you get paid. Some require PayPal accounts or a mailing address for checks.

• Refunds: When a refund is made on a product, your account will be deducted the amount of the commission for that order. It’s good to confirm other details on refunds with the program.

• Tracking: Does the program provide a method to track clicks, purchases, leads? Without this, how will you know if they are paying you correctly? Most sites have a dashboard of your account, showing daily, weekly and monthly traffic stats.

• Use of cookies: A larger program should make use of 14 or 30 day cookies, which means that if you refer a visitor to a site, and they leave without making a purchase, but return next week and then buy, you’ll get credit for the referral and you’ll get your commission.

• Allowable marketing techniques: Some programs prohibit specific means of marketing, use of trademarked content (logos, images and slogans) or use of their company name in search marketing.

Common Requirements

Not all programs are the same, but many will require:

• A functioning, and well-programmed, website
• Confirmation that your site doesn’t violate specific terms and conditions
• A valid business registration, Social Security or Social Insurance number.