Affiliate networks recruit salespeople all over the world to sell a product in exchange for a commission.
For small business owners, an affiliate network is a way to expand a business without hiring anyone to make sales. It provides a real incentive to anyone interested in making money by selling the product. Small business owners benefit by expanded sales. Affiliates benefit by making money without a monetary investment.
Signing Up as an Affiliate
Every affiliate network begins with an appeal to salespeople to sign up with the network in order to earn a commission. Signing up is always free. It generally requires entering an email address and basic contact information. In many cases, companies require their affiliates to upload tax and payment information to the site before they can be accepted into the network. For Americans, this includes a completed W-9 form. Some also require a PayPal address or other information to allow payments to be sent.
Earning a Commission
People interested in a sales income sign up for an affiliate network in order to earn a commission from the sale of the products being sold by the company. This enables them to earn money form sales without having to invest in the product. There are no inventory costs or site infrastructure costs, and affiliates don’t have to ship the product to customers. All of the sales details are handles by the company selling the items. The only thing that affiliates have to do is to direct customers toward the company’s site where they will buy the products.
The commission earned may be a small percentage of the sales price, or it may be most of the sales price. Amazon.com, the oldest and largest affiliate program online, starts its commissions at 4 percent and raises them for affiliates who sell large quantities of products each month. Clickbank, another large affiliate network, allows digital product sellers to set their affiliate commission rates as high as 75 percent.
When affiliates becomes part of a network, they are generally given a variety of ways to advertise the items that the company is selling. These may include banner ads, text ads and direct links. However, some affiliate networks supply just one link for each affiliate. To make sales, affiliates place the links on websites as they are allowed to by the company. Common places to place affiliate links are blogs, niche websites and on social networking sites.
When a potential customer clicks on the link, they are directed to the company’s website where the products are available for sale. Once the customer is on the site, a cookie is placed on his computer. This allows the company to track the sale and to provide the commission to the affiliate when appropriate. The cookie enables a site to pay a commission to the affiliate when the sale is made after the first time the customer visits the site. Some companies place a 30-day cookie on customer computers to allow a full month of commissions when an affiliate directs a customer to the site. Others place a 24-hour cookie or another period of their choosing. Affiliates should read the network's terms to find out the cookie’s time period.
Affiliate Network Rules
The rules of each affiliate network vary greatly by company. Some accept virtually anyone into their networks while others have strict rules about who can join. Some networks, such as the eBay affiliate network, require that affiliates have their own sites where they will place their affiliate links.
Most affiliate networks have rules about where affiliates are allowed to place their links. Some don’t allow pay-per-click ads to contain their affiliate links. Others encourage affiliates to place links anywhere they can as long as they don’t engage in spamming potential customers.