Important Questions to Ask Before You Join an Affiliate Program

To join the best program for your site – meaning the one that will make you the most money - there are a number of questions that need to be answered. Below is a list of important questions you should consider before affiliating with most merchants.

If you can’t find an answer on the merchant's site, phone or email them. If contact information isn’t readily apparent on their Web site, don’t waste more of your time on that merchant - find another program.

If you don’t get a response within a reasonable time frame, say 24 to 48 hours, then pass on the program. They may be more responsive to their customers and current affiliates, but will you know? Discovering that they are less responsive when you have a real problem is a bigger problem still.

On the flip side, be sure that the answer to your question is not included in the affiliate package before contacting the program manager. They’re busy people, and answering questions that have been covered elsewhere, wastes their time. That makes for a lousy first impression.

OK, let’s review those questions.

Is the Company Reputable ? 

You don’t have to ask Dell or eBay how long they’ve been in business. The concern here is about promoting an unknown merchant that may turn out to be a fly-bynight or dishonest operator.

Commission Junction requires that merchants have funds on deposit to ensure that affiliates are paid what they are due. But what happens if the merchant isn’t part of a network?

Search Google for “company name review” and see how many results you get. None? Perhaps best to stay away.

Is there an Affiliate Agreement ?

All merchants that are part of an affiliate network have agreements in place and most independent programs do as well.

However, if the program you are considering doesn’t have an agreement published on the site, move on. Without an agreement, it’s much too easy for them to shaft you for money you’ve earned.

What are the Terms of Agreement ?

Affiliate agreements are usually lengthy and peppered with long-winded legalese. Read it. Read it completely and carefully or you could be in for a nasty surprise.

For example, let’s say you invest several hundred dollars in PPC advertising to promote a particular product. In return, you earn a thousand or two from that program during the first month of promotion. It would be very unpleasant to discover that the company only pays quarterly.

If you end up in a dispute with a company, agreements are usually interpreted under the laws of the state, province or country in which the company is located. Disputes are usually resolved by binding arbitration in that state, province or country. Is it worth traveling from Rhode Island to California to argue over a couple hundred bucks ?

Probably not. Protect yourself against nasty surprises by reading affiliate agreements from top to bottom.

May I Terminate the Agreement ? If so, How ?

Most agreements contain a ‘termination clause’ that outlines the terms under which you or the company can end the affiliation. In most cases either the affiliate or the company may choose to cancel an agreement at any time without written notice of cancellation to the other. As an affiliate, you’d simply take down your links and that would be that.

Is My Site Eligible for this Program ?

Pay particular attention to criteria that have been set for acceptance into an affiliate program.

For example, the following excerpt is from the advertiser detail section at Commission Junction for its own recruiter program:

Publishers will be accepted into the program based on the following criteria:

➤ Quality and appropriateness of site(s)
➤ Volume of traffic
➤ At least a one-dollar sign ranking in the Commission Junction network
➤ Own domain name
➤ Compliant with the Commission Junction publisher service agreement
➤ Directly related to performance marketing

Does it Cost to Join the Program ?

Ninety-nine point nine percent (99.9%) of merchants don’t charge a fee to join their affiliate programs. If they do, it’s an MLM, or Multi-level marketing scheme or a reseller program.

Six Figure Income (SFI) is an example of an MLM scheme that refers to itself as an affiliate program. In order to earn income with SFI, you must purchase some of the company’s products each and every month to ‘qualify’ for sales earnings that you’ve generated within a month.

I believe MLM (network marketing) and reseller programs should refer to themselves as such, and leave the term ‘affiliate program’ for programs that are free to join.

To highlight the differences between MLM, reseller and affiliate programs, I compare and contrast each of those marketing methods below.

Cost to Join - Affiliate programs are FREE to join, whereas resellers must BUY the products they sell. Multi-level marketers usually must buy sufficient quantities of the products they market to qualify for earnings at a certain ‘tier’ or level.

Payment Scheme – Affiliates typically earn a percentage of the purchase price, while resellers retain 100% of the proceeds from product sales.

Tiered Programs – Some affiliate programs offer webmasters the opportunity to earn a percentage in the ‘2nd tier’ by paying a fee for each new affiliate that joins the program, while some others pay a percentage of their 2nd tier affiliates’ earnings. Others pay in both situations.
Although this structure is akin to MLM schemes, unlike multi-level marketers, affiliates are not required to purchase products in order to be eligible to build their affiliate ‘downline’.

Product Fulfillment – Resellers and many multi-level marketers must handle their own product fulfillment, including carrying inventory, order processing and shipping. In the case of affiliate marketing, the merchant handles all of the above.

Product Fulfillment – Resellers and many multi-level marketers must handle their own product fulfillment, including carrying inventory, order processing and shipping. In the case of affiliate marketing, the merchant handles all of the above.

Lead Generation - Although affiliates can collect names and email addresses from visitors to their sites, the affiliate rarely knows exactly who buys their affiliated merchants' products. Because resellers handle product fulfillment themselves, they collect names and email addresses from those who buy their products, in addition to those who sign up for their opt-in lists on their sites. This benefits the reseller in that they can do follow-up or 'back-end' sales to existing customers.

As with any opportunity, there are advantages and disadvantages to each type of marketing and each method can yield decent profits.

What is the Program Type ? 

There are essentially three types of affiliate programs: pay-per-sale, pay-per-lead, and pay-per-click.

Pay-Per-Sale programs are also known as Partnership and Percentage Partners programs. These programs pay either a fixed dollar amount or a percentage of sales generated by your links.

Pay-Per-Lead programs pay a set amount whenever your customer fills out a survey or requests a quote or some information.

Pay-Per-Click affiliate programs are similar to Pay-Per-Lead. Essentially you are paid each time one of your visitors clicks on the link through to that program’s site.

As Pay-Per-Lead and Pay-Per-Click programs require huge volumes of traffic to generate serious revenue, I prefer Pay-Per-Sale programs because they are performance based. Doing business as an affiliate is about giving your visitors valuable information so they can make good product choices. Sending huge quantities of traffic to a merchant site so they can collect email addresses and spam large groups of people is valuable only to the merchant.

Target a market effectively, give them what they want, and you’ll be rewarded handsomely with a percentage of the sale!

What is the Commission Rate ?

It’s absolutely essential that you understand commission structures and compare payout rates between affiliate programs. This will affect to what extent you promote individual products.

Let’s look at some real examples. Let’s say you want to build a site around credit cards, in which you get paid a commission each time someone fills in an application.

First you’d search advertisers and products at Commission Junction, by inputting the word ‘credit cards’ into their search box.

You then sort the results according to payout per lead, from highest to lowest amounts, by selecting ‘Lead’ at the top of the column. When you click on ‘Sale,’ advertisers are sorted according to payout per sale, from highest to lowest.

How Long Do Cookies Last ?

You may have heard that it takes 7 exposures to a product before people feel comfortable to buy that product. So what happens if a visitor from your site clicks through to your affiliated merchant site today but doesn't buy anything until a week later? Will you still get credit for the sale?

Whether or not you earn a commission depends on the duration of the 'cookie'.

A cookie is coded piece of information, stored on a computer that identifies that computer during the current and subsequent visits to a web site.

Some people worry that cookies put viruses on their computer, but there is no need to worry! Cookies are simply text files that cannot be used in any way to harm a computer.

Each cookie is coded to identify that computer during the current and subsequent visits to the merchant’s web site.

More important to affiliates, is that cookies are coded to expire after a set amount of time. So, if the merchant gives cookies that last for 90 days, you get credit if a visitor from your site returns to the merchant and makes the purchase within 90 days.

If your visitor purchases the product after the 90 days, and the cookie has expired, you won’t get credit for the sale.

So it literally pays you to look for long-lasting cookies when choosing affiliate programs.

Will I Get Credit for Recurring Sales?

What happens when you stop promoting your merchant partners’ sites? In most cases, you'd simply stop earning. Your income would stop and the checks would stop coming. Because your income is limited by the number of customers you send to the merchant in a given month, you have to keep marketing your site to bring in new customers. Over, and over, and over again.

Make a sale, get paid and that’s it. Your customer may buy more of the same product from your merchant partner, but you only get credit for the first sale. The merchant benefits indefinitely from your introduction of the customer to the product, and you get only one credit ?

However, there are affiliate programs that pay commissions on all recurring charges, such as monthly newsletter subscriptions and web hosting packages. As long as your customer keeps ordering the product, you get residual commissions that keep coming in month after month, after you made the initial sale.

So, here’s the bottom line. If the affiliate program doesn't pay residual commissions on recurring charges, you're losing money.

Does the Program Pay Lifetime Commissions ?

There is a difference between ‘recurring’ or ‘residual’ commissions, and ‘lifetime’ commissions.

A program that pays residual commissions pays you every time the customer renews their subscription to a specific product.

A program paying lifetime commissions pays the affiliate a commission for each and every product that the customer buys from that merchant, including residual commissions, if applicable.

For example, let's say that you are earning recurring commissions on Mr. Samson’s web hosting subscription at Best Host Company.

If the company doesn't offer 'lifetime commissions' and Mr. Samson upgrades to his own dedicated server at Best Host Company; you won’t get paid commissions on his monthly server fees because it’s a different product.

If XYZ Company offers ‘lifetime’ commissions however, the customer you refer to them is "yours" for life, regardless of which Best Host Company’s products they buy. In the scenario above, you would be paid a monthly commission on the dedicated server fees for as long as Mr. Brown remains a subscriber.

Joining programs that offer residual or lifetime commissions is an excellent way to build a steadily increasing income. Once you make a referral, the checks keep coming in. So even when you take a vacation from your affiliate business, the checks for your residuals, will also keep coming in.

How many other businesses pay you to take a vacation ?

Are Merchant Copy & Sales Tools Offered ?

Most merchants offer their affiliates advertising copy and banner ads for placement on their sites. In many cases, you’ll be able to generate the code with a click of your mouse, which you then paste into your page or in your newsletter. Some merchants also offer product datafeeds for their entire range of products. Using datafeeds, you can build a 1,000 item site in mere seconds!

Many merchants also host the banners from their own sites, which saves you the trouble of downloading and saving the graphic to your computer, then uploading it to your server. Banners that are kept on the merchant’s server also reduce your bandwidth. Sales tools make an affiliate's job easier. In the “10 Types of Merchant Copy and Sales Tools” later in this section we'll look more closely at how to put these tools to use.

How Often Do I Get Paid ?

Compensation plans vary from merchant to merchant and program to program. Be sure you know what the payment plan is, or you could be in for a nasty surprise!

Payment schedules vary depending on the program. I’m affiliated with programs that pay weekly, biweekly, monthly and quarterly.

Does the Merchant use Third Party Billing ?

One nice thing about associating with merchants that are part of a bigger affiliate network is that you can count on the affiliate network to make sure the merchant has put enough money into their account to pay your commissions.

Some networks go so far as to indicate how well each merchant's account is funded, allowing you to choose whether or not you should promote their products. Other networks will suspend the merchant's account until they've deposited sufficient funds.

You don't get that kind of security when you sign up for a program that is administered by the company itself. While you don't need to worry about Amazon or Match.com, it's sometimes hard to be sure about smaller unknown companies.

One way to gain some security in that regard is to find out whether the company uses third- party billing to process their payments and handle affiliate commissions. A thirdparty processor takes in money from the customers, and makes sure that the affiliate receives what is due to them.

Depending on the affiliate agreement, you may end up splitting the payment processing costs with the merchant.

Is There a Minimum Payout Amount ?

Many programs require that you earn a minimum amount before they will issue you a check. For example, some merchants set their minimum payouts at $50 or $100. This makes sense (cents?) if your earnings for the month are $2.00 and it costs the merchant five dollars to cut you a check.