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Setting up an affiliate program

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When already sell a product or service on the Internet, it’s time to consider setting up your own associate program. It required a little effort of money and… time, but the results will greatly reward: on the one hand, this system will generate increasing online sales, on the other hand the site will become more familiar.

You have several options for choosing the type of associate program that seems most appropriate.

  1. Easiest way is about to buy a click-through program, based on which, for each click on a link to your site, associates pay a fee. It is a fairly widespread and very simple. Associates in their website displays a banner or text link to your site and, every time a visitor clicks on, the link is registered by the program for the associate that hosted the link. Click-through fees normally ranges between 0.05 and $ 1, depending on the value of the product and budget.
  2. A more complex program consists of a set of payment system for guiding visitors associates to an electronic form of contact (pay-per-lead). When a visitor fills out and send form (which can be a simple request for information, a request for affiliation, or download a program to a free version of the sample), partner that host the link to the form or/and the form itself is paid a flat fee. In this system, the associate is paid whenever a form is submitted via his website.
  3. The third formula is splitting a share of gain (revenue sharing program). It is by far the most popular form of association encountered on the Internet. Program owner offers a commission for each sale made through related websites.

In the first two cases, you may earn increase in site traffic but not sales volume increase. Besides, associations could cheat, generating false clicks… There is a risk to lose money rather than generate them.

Turning to expenses, besides the necessary software purchase, there are some minor costs necessary for system maintenance and technical support for partners.

Next, if you have decided which of the models described above you will choose, you also have three options to set how you will track and record activity of associates and generated sales through them.

Method #1

Achieving mirror pages or even an entire site in the mirror (“mirror site“).

In other words, for each member will have a page or a site with a distinct location (URL). There are advantages and disadvantages to this system. Spending money is very low, almost zero, but instead consume a lot of time.

Basically it creates pages absolutely identical for each member that will differentiate only by the web page address. For example, associate the number 1 will be page info1.html, partner number two, info2.html and so on. Any electronic form sent through the pages belonging to partner 1 will carry the index 1. This way the work of each partner will be easy to follow, even without a automatic statistical program.

This system is suitable for a relatively small number of affiliates, but it is difficult to apply to a greater number of partners. Another limitation is time that can not be applied when the sale is made in a larger number of products. Imagine what it would mean to multiply a number by a few dozen pages for more than 100 associates. It required a huge effort to monitor properly the work of each partner separately.

Another disadvantage is that the partners will not benefit from real-time statistics. Income levels due to each partner will be calculated manually and notification will be sent about once a month for this operation will also take a few days. It is also to consider the issue of trust: being an outdated method, associations will not even trust this system and any program in honest owner who could suspect of false reporting.

Method #2

Consists of renting a specialized service in setting and administering a program associate. These intermediaries provide monitoring software for business associates, the sales realized, manage money according to a predetermined algorithm that includes payment services through a fee charged on each sale separately. The size of the fee depends on the provider.

It is a fairly convenient for the owner of the program. The main disadvantage is that it substantially reduces the revenue generated online.

At first they may feel encouraged by the fact that you will not pay taxes for setup and you will not have to bother with technical issues, but how soon you will feel frustrated that a lot of the money earned will leads monthly fees.

For a small business might be a reasonable solution. I just want to draw your attention to think very carefully before opting for this system, because once it becomes functional and expand its reach is almost impossible to be replaced with a more profitable solution in financial terms.

There are some online companies with a more reasonable policy that charge a bigger setup fee and then establishes a very small percentage of each sale, the management fee of the program.

Comparing costs (percentages sale or setup fees with an initial investment in a special software program management associate), a small company would in most cases opt for this solution.

Method #3

Buying a software for the management of online association system.

Beware of very cheap packages that are on the market quite a lot. Some give big trouble in managing it, did not have enough flexibility, and even crashes in certain situations. Problems are like:

  • does not display real-time statistics
  • does not work with shopping cart systems
  • does not guarantee 100% monitoring of sales
  • does not provide a means to monitor the sales completed offline
  • does not register the returning buyers that buy after a time from the first visit

With very few exceptions, which sells under $ 1,000 is often of very poor quality. I believe that if you dare to buy such software eventually throw money.

Programs of this kind which deserves to be considered retails higher prices. It is certainly a considerable investment for a small business!

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