If you’re running an online shop or looking to generate leads to your website you may want to consider setting up an affiliate program.

It really isn’t surprising that Amazon is the world’s largest online retailer, however most people aren’t aware that most of their revenue is generated from their affiliate program which makes up roughly 40% of their online sales.

Affiliate Programs Explained

Affiliate programs are essentially a software or online solution which integrates with your website. The software provides online marketers or “affiliates” to signup and promote offers or products on a vendors website and receive a commission when a sale or lead is generated for their marketing efforts.

The software includes a dashboard which allows affiliate to track their sales and access banners or links which they can add to their websites or through their social media presence. All banners and links are tracked using cookies which track whether a sale is made and typically expires in 30 days so if an affiliate refers a customer but the customer makes a purchase 10 days later or purchases another product on the website then they earn.

This type of marketing is performance based. Think of an affiliate like commissioned sales person who only earns when they make a sale.

Affiliates generally need to be approved to be part of the program or meet certain standards (ie have a website).

Commissions generally range from a percentage (10% on average) or a set dollar value ($50 for every sale generated). The commission structure is entirely up to the vendor however the more aggressive the payout the more likely affiliates will join the program and promote your offers.

Affiliate Program Types

There are 3 different types of affiliate programs that can integrate into your website.

1. Affiliate Software

This is usually the most inexpensive of the three. The software is uploaded and configured with your hosting. It typically ranges from $100 to $500. There is typically a renewal fee which covers upgrades, ongoing support, additional security and new features which I highly recommend paying for.

Recommended: Idevaffiliate

2. Self-Hosted Affiliate Software

This type of affiliate solution is hosted by an external company. This type of hosting typically doesn’t require a setup fee and can cost a recurring monthly fee as low as $15/month. The benefit of this type of affiliate program is that as long as you pay your monthly fee then upgrades, support and new features are all included.

Recommended: OSI Affiliate.

3. Affiliate Networks

Similar to the self-hosted solution, the affiliate network is an aggregate of affiliate programs where affiliates can browse through hundreds of different programs. This is typically the most expensive option as there is a setup fee and monthly reoccurring costs of $500 and greater. The benefit of this type of affiliate program is that it already has a base of affiliate subscribers who may see your program however in speaking with one network they admitted you still have to work to find affiliates and promote your program.

Recommended: Shareasale.com

Each have their pros and cons however which type you choose and really depend on your budget and business needs. It certainly doesn’t operate like Ron Popeil’s “set it and forget it” method and there are no guarantees that an affiliate program will work for your business however it is definitely worth trying. Affiliate Programs do require hard work as you have to actively find affiliates and promote your program unless you choose to hire an affiliate manager or outsource your affiliate management.

If you’re planning on launching an affiliate program feel free to contact us. If you have any questions please mention in the comments below!