How to Set Up an Online Affiliate Program to Sell Your Products and Services

Copyright (c) 2007 Donna Gunter

I consider Amazon.com to be the Internet pioneer for establishing affiliate programs. Their strategy to permit others to sell their products for a commission on affiliate websites has single-handedly help them become an Internet powerhouse and has resulted in Amazon.com becoming a household name.

As an online business owner, you, too, should be offering your own affiliate program. Affiliate marketing is so much less expensive than to take out a banner ad or text ad on other websites or in email newsletters, and the results tend to be better. Imagine that you have a staff of people working for you, and they have agreed to work free of charge until they successfully make a sale. At that point, they are paid when their sales reach a predetermined volume (as outlined in your affiliate agreement) at a certain interval. You've instantly created a fast and almost free sales force with very little money.

Even though you may not have the monetary resources available to Amazon.com, you can create this sales phenomenon as well for your professional service business.

Here are the steps you need to consider to create your own affiliate program:

1. Find affiliate tracking software. Trying to manually track all of the sales of your affiliates is simply too labor-intensive. Instead, you need to find a software program that will help you manage your affiliate program. I recommend the one bundled with my shopping cart, GetMoreClientsCart.com, which assigns each affiliate a unique affiliate ID that they can use in their websites to make referrals back to your website, where the actual sale occurs. Each affiliate is also assigned a unique log-in and password so that they can log into their affiliate account at any time and check on their sales volume. Best of all, once you've set up your affiliate program, the setup for each affiliate is completely automated.

2. Determine your level of tiers. Typically an affiliate program is limited to no more than 2 tiers. After two, it begins to take on the persona of a pyramid scheme. The first tier is comprised of the affiliates who are directly signed up for your affiliate program, and the second tier are affiliates of your affiliates. For simplicity, I tend to use the 1-tier affiliate structure.

3. Determine your commission structure and rules. Many online business owners spend countless hours wringing their hands over how much to pay in commissions. If you offer too little, no one is interested in promoting your products and services because the payoff isn't large enough to motivate them. If you offer too much, you feel like you're giving money away. I've discovered that first-tier commission amounts typically range from 25%-75%, with most in the 35-50% range. Second-tier commissions seem to range between 10%-30%, with most landing in the 20% range. You'll also need to determine if you'll pay commissions on products that people buy for themselves through their affiliate link. Many people join an affiliate program solely for that reason. However, if that's the only reason they've joined your affiliate program, they probably won't be making additional sales for you.

4. Create your payout schedule. Next you'll need to determine at what intervals you'll pay your affiliates. I've seen some programs pay commissions weekly, but monthly payouts is the most common. Let your affiliates know on what day you determine the month's commission, what their minimum earnings must be to get paid (i.e. at least $50 in earnings, for example), and on what day you send payments.

5. Determine your payment form. For many affiliate programs to which I belong, I receive a check in the mail for my payments. However, more companies are transitioning to PayPal's Mass Pay feature to pay affiliate commissions. PayPal's Mass Pay feature eliminates most of the paperwork involved in check writing, and with the upload of a few files, you can pay your affiliate quickly via their PayPal email addresses. In order to use this service, you have to have a PayPal Premier or Business Account and you need to ask for your affiliate's PayPal email address.

6. Provide marketing assistance. For the greatest success in your affiliate program, you need to provide your affiliates with marketing materials to help them promote yours products and services. Have a graphic designer create a variety of website banners and buttons they can use, and you can compose classified ads that they can place in ezines and sales letters they can use on their site or as an email marketing tool. You'll need to create some reminders about ethical email marketing strategies so that you don't become associated with anyone who is labeled as a spammer. Lastly, give your affiliates access to a group of articles that they can use on their site to promote your programs and services, with directions on how to insert their affiliate link in the resource box.

7. Educate your affiliates. After joining an affiliate program, I often receive a phone call from a company's affiliate manager welcoming me to the affiliate program and encouraging me to contact him/her with questions. Or, I get an invitation to special affiliate teleclasses/webinars to give me strategies on how to be a good affiliate. You can offer the same amenities to your affiliates by working with an Online Business Manager/Virtual Assistant to run this program for you. At a minimum, you can create an affiliate handbook that your affiliates receive upon signing up for you program, which will walk them through the steps of your affiliate program.

8. Market your affiliate program. Once your affiliate program has been set-up, you'll need to promote it. Have your OBM/VA seek out strategic alliance opportunities. Search for websites that permit you to promote your affiliate program. Send out notice of your affiliate program to your list, on your blog, and on discussion lists where this is type of promotion is permitted.

Creating your own affiliate program is a great way for you to grow your business in a short period of time. You never know--you may be on your way to creating your own Amazon.com!