by Tom Dahm, Chief Operations Officer, NetMechanic, Inc.
Affiliate programs are an easy way to make your Web site earn money. With hundreds of these programs on the Web, you have a good chance of finding one that matches your site. Just be sure you read the fine print before you join.
Affiliate programs have many names, including associate programs, referral programs, reseller programs, or partner programs. Regardless of the name, they all work under the same basic concept: you place a link to a commercial Web site on your page, and they pay you a fee for each piece of business generated from your referral.
Affiliate programs have become a core part of many commercial Web site's marketing strategy. In fact, a recent survey by Forrester Research rates them as the most effective means of site promotion. Commercial Web sites are fond of these programs because they pay based on results, not on raw advertising impressions.
But not all programs are created equal, and some produce poor results. One Webmaster of a large country music site recently told us about his experience with a music retailer's program: "I feel like I sent them a lot of traffic, and I never got a dime from them."
With that in mind, here are some things to consider before you join an affiliate program.
1. Goodness of fit. Does this affiliate program compliment your site? Don't join an affiliate program just for the sake of joining. If you run a site about child care, linking to books about parenting is appropriate; linking to a music site may not be. Your best bet is to link to partners offering products that add value to your site.
2. Continuing or one-time revenue. Affiliate programs typically pay a 5-15% commission on their sales. But a higher commission isn't the only factor; you should also consider the term of your referral. Some programs pay you only for sales made to the customer on their first visit. Some pay better for items that you specifically link to. The best programs pay you a commission on all future sales to the customers you refer.
3. Online reporting. You need to be able to see how you're referrals are doing at any time. Any serious affiliate program will have online reporting of your referrals and how much money the site has earned from them. Stay away from any program that doesn't offer this.
4. Payment threshold. Most programs require your referrals to generate some amount of cash before you get your commission. For example, Barnes & Noble offers a 5% commission on all sales from your referral, but they won't pay you until your commissions exceed $100.
Does that mean you're being swindled? Not really. Keep in mind that for your partner's site accounting costs are the major expense of the affiliate program. Since they want to keep accounting costs down, they want to avoid making micro-payments to their affiliates. It's just not worth it to cut a check for $5.
In addition, many programs will only pay you at a specified frequency. Quarterly payment is typical. Again, that's done to keep accounting costs down.
5. Read the Terms. An affiliate program may look good at first glance, but the devil's in the details. Be sure to read the program's Terms and Conditions before you join. A disappointing number of affiliate programs bury their terms inside the sign up process. That's bad, because it discourages you from reading them. Don't feel pressured. By all means, print a copy of the terms and read them carefully. Don't be afraid to exit the sign up process and complete it later, after you've had time to study the terms.
So where can you find a good affiliate program? Two good starting points are Refer-It and AssociatePrograms.com. These sites together list hundreds of programs. And don't forget our new Partner Program, which pays you a ongoing 20% commission on all your referrals.