The appealing thing when it comes to marketing with affiliate programs is that they are pay per performance. Unlike banner ad campaigns where you buy a set amount of advertising regardless if it brings results, with affiliate programs you pay only when you get the results you were looking for, more visitors, more leads, or more sales, whichever you decide is best.

To set up your own affiliate program, you first need to decide what kind of affiliate program you want and what your want to pay for them. There are three types of programs you can establish.

1. Pay per click - This is good for sites simply looking for more traffic. Since it is easier to generate click-throughs than sales you will get higher results and likely more affiliates signed-up. Some sites start off with a pay per click affiliate program to generate brand awareness and then switch over to a pay per lead or pay per sale afterwards.

2. Pay per lead - This is good for sites looking to increase their subscriptions to their newsletters or other free services that require people to sign-up.

3. Pay per sale - For sites out there that are selling goods online, pay per sale are ideal. You pay only when your goods are sold and you determine what type of commission you want to pay. However you should be willing to pay at least 5% in order to get people to sign up. What commission you offer is also dependant on whether you are selling a digital or physical product. With digitial products due to the low overheads you can afford to offer commissions are high as 75% in some cases.

When you have decided the type of affiliate program you want, you then need a way to sign up new affiliates and a way to track what is owed to each affiliate who signs up. You can do this either by purchasing or leasing your own affiliate tracking software, or you can use a third party such as Clickbank for digital products or Commission Junction for physical products.

With affiliate tracking software, you set up and run your own affiliate program. Prices range from around $350 USD to over $10,000. Some that lease out their software also have additional monthly fees as well. Things to look for when buying or leasing tracking software are:

• Ease of setup. How much technical knowledge is needed to set up the software?
• Support - Is there a technical support number or at least email assistance?
• Does it cover all areas needed such as affiliate sign up, commission tracking, and payments?
• Will it handle all types of affiliate programs, click through, leads, and sales?
• Does it give real time statistics?
• What is the total cost, including any additional fees not included in the price?

Third party solutions will set up everything for you and in the case of Commission Junction even handle the payments. Prices range from 30% of all commissions to as high as $5000US set up alone. The advantage of using an affiliate network is not only that they handle the tracking for you but also that they already have established themselves and have thousands of people already sign-up looking for programs that promote on their website. Things to look for when choosing an affiliate network include:

• What types of programs they support, for example Commission Junction handles both pay per lead and pay per sale?
• What kind of linking they support?
• How are payments to your affiliates handled?
• Reliability
• Number of affiliates they have signed up
• Cost for set up and cost per commission

As with any marketing endeavor, crunch your numbers and do your research first. However if you are selling online, affiliate programs are something you should definitely investigate.

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