|Key Points - Affiliate Programs|
Affiliate programs can be a useful marketing tool to drive traffic and sales. The concept is simple, you allow people to sign up as affiliate and they promote your product from their web site. When you get a sale that came via their site then you pay a % commission. The actual % varies from as low as a few% up to as high as 50%. The amount is up to you.
Obviously at lower % commission there is less incentive for your affiliate to promote your product.
There are several 3rd parties that can manage an affiliate program for you, Commission Junction is a popular one, linkshare is another. With these you may have to pay a upfront fee to join and then pay a % on sales that pass through their system. In return they manage the affiliate program and provide an interface for affiliate to log in and check their affiliate accounts. Another benefit is that affiliate are more likely to trust a 3rd party to pay their commissions accurately.
An alternative is to set up your own affiliate system. There are many affiliate software options available. It will be cheaper to manage this yourself, but it will take more admin. time to manage,
You will find that many of your affiliate drive no sales, but a few may drive a significant amount of new sales. Paying a commission is a win-win for you and the affiliate.