How to Start an Affiliate Program
to Advertise Your Website

An affiliate program is an excellent way to potentially get an army of people advertising your website for you, with only a start-up cost and/or a small commission to fork out until you actually get a sale from this advertising. Once one of your advertisers, or "affiliate marketers", finds you a sale, only then do you pay them a commission and you decide what that commission will be.

One very desireable option is that you can buy software that will allow you to manage all of your affiliates on your own and this can be much cheaper than using an intermediary company. (More on that at the bottom of this page.) Most businesses, however, choose to have an intermediary which is a management company that will pay their affiliates for them. This management company also supplies the code that tracks the sale when a visitor clicks on your affiliate's ad that takes the visitor to your website. I'll give you some information about various management companies but since ClixGalore is the least expensive that I have found, I will refer to them in this explanation of how this all works:

You join ClixGalore (if it's another company or one of ClixGalore's more expensive programs, there is a yearly fee). You keep funds in your account, sort of like your personal bank account.
You decide how much you want to pay your affiliate marketers per sale that they bring in for you and whether you will pre-approve these affiliates or approve them manually. If you want to approve them manually, you will tell them what sites you won't accept as marketers (i.e. sites that have porn, are under construction, are not having anything remotely to do with your industry, don't have enough traffic, etc.).
You will provide ClixGalore with advertising banners and buttons for your affiliates.
ClixGalore will list you in their catalog of merchants with whatever information you have written to explain who you are and what you do.
Affiliates will go to ClixGalore looking for affiliate programs to join. They will see yours and join. Why not, right? You're great!
ClixGalore will generate for your affiliates the HTML code that they need to put on their websites.
Once the code is there and a visitor clicks on the code, directing them to your site, ClixGalore will know and make a record, tracking the cookies on the visitor's computer. Even if the visitor does not buy anything right away, when they do come back to your site and buy something, ClixGalore will pay the affiliate marketer using the money from your account and they will keep 25% for themselves. So, if you decided that you'd pay the affiliate marketer $10 per sale, you would also pay ClixGalore $2.50 on top of the $10 you've already paid.
You decide how long those cookies will last. You can choose to pay the affiliate if their lead generates a sale after 30 days of the first click-through (when the visitor to the affiliate's website clicked on the banner and came to your site) or even if the sale doesn't generate until 2 years after the first click through! It's up to you as to how generous you want to be to attract affiliates.
The affiliate marketer will get paid by ClixGalore one cheque for all the money that they've made from all the affiliate programs to which they belong with ClixGalore, once the amount reaches a certain threshold (choices are provided, usually $20, $50 and so on).
All you have to do is pay the initial fee to ClixGalore, keep your account replenished, generate your banners, approve your affiliates and manage your commissions.

Very good merchants will have extra incentive periods where if the affiliate marketer sells a certain product or a certain number of products during a certain period of time, they will receive more money. You may wish to consider doing this.

Here's some information on some different affiliate management companies:

Commission Junction- Probably the most well known company, it's a hassle for marketers to join which might discourage people from joining which means that you won't get as many advertisers. If they know what's good for them, they will push through the hassle and join anyway because there's a lot of BIG programs on there. eBay and Gap have their programs managed by CJ. Someone told me that it was at least $1000 a year to be with CJ. It's at least expensive enough that they don't tell you how much. It's like some very high-end handbag stores: there's no price tags because if you have to ask, you can't afford it!

Share-a-Sale- a good company, it's a bit expensive. Sometimes it is only $350 to join, when they're running a special, but it can be more. Then, you have to keep your account replenished with $100 to start and they take 20% in fees of what you pay as your commission. If you don't generate at least $25 in fees for them each month, they will charge you up to that amount, after your first 3 months.

ClixGalore- You would probably want to join the Bronze program at the very least. There is no yearly fee, just $75 that you need to pay from which ClixGalore pays your affiliates and you need to replenish this when it gets low and they charge 25% commission on each sale.

ClickBank- ClickBank is only for downloadable products like e-Books.

LinkShare- It's a hassle to join LinkShare, as an affiliate marketer. So, you might lose potential advertisers because of that. LinkShare boasts no-cookie tracking but rather uses a patented tracking system that they say makes them the leader in their industry. That's great for the marketer... not for the merchant. Which is not a nice thing to say because it's like celebrating your affiliates getting cheated, but to be frank, as the merchant, you don't mind if you don't have to pay more for the sales that you receive because someone turned their cookies off on their computer. I suspect that LinkShare is very expensive like Commission Junction, if they don't list their pricing at all on their site.

Now, as I mentioned, you can also use your own technology.

AssocTrac is the best software that I've seen that you can purchase to manage your affiliate program. It does have a lot of benefits.

If you ever decide to switch management programs like Share-a-Sale or ClixGalore, you have to try to convince all your affiliates to switch with you because your links will change!! This is a big hassle and you could lose some affiliates this way. You don't have to worry about this if you have your own software.
Some management companies hide your affiliates' information from you so that you have no idea who they are! That's kind of a bummer. Especially if you want to switch management companies and bring your affiliates with you.
Because not all of these management companies allow your domain name to be in the banner link, all of these links that are advertising your website are actually pointing to the management companies! This is a BIG yucky deal because those links could have been pointing to your website, which would increase your link popularity with the search engines. And link popularity has a lot to do with how you get ranked. If you use AssocTrac, there will be links pointing to your website all over the internet which will get you a better ranking which will bring you more free traffic and more sales.
It's easy for affiliate marketers to join and they can log onto their back office of sorts and see how many sales they have made, etc.
It's easy for you to set up and use and you get forever support from the company that makes it.
You can set it up with Quicken so that your cheques will get printed up for you.
It sends personalized emails to your affiliates, which looks great and makes them feel special.
It allows for you to offer commissions on all future sales. Most affiliate programs only pay an affiliate on the first sale from a customer. You can pay your affiliate for all the future sales that come from the customer that they brought to you. Which makes affiliates very happy. Which makes them want to work harder to advertise your products!
It allows for 2-tiered programs for your affiliates. This means that you pay your affiliates for every affiliate that they find for you! In other words, if Jan joins your affiliate program and then Jan tells Susan and Susan joins your affilate program, Jan can make a commission from all of Jan's customers that she sent your way and all of Susan's customers that Susan sent your way. This makes affiliate marketers very happy, motivating them to find other affiliates for you. It's not unlike direct sales' MLM set ups, really.

The only downsides that I see with this software:

Larger initial cost as opposed to paying a percentage on every sale, forever.
There's no large category of merchants where affiliates can find your program. If you want people to join your program, you have to list yourself on different affiliate directories on the web. But unless you're going to join Commission Junction or one of the other really big management programs, the exposure that you'd get on these directories compared to say, ClixGalore's catalog of merchants, is probably not so very different.

So, comparing your two least expensive options, ClixGalore and AssocTrac:

Let's say that you have a $50 sale and you pay a 20% commission. That's $10. Then, you have to pay ClixGalore $2.50. Doesn't sound like much.

But while that $2.50 you pay in "transaction fees" may not SEEM like a lot of money, think of how quickly it would add up...

Let's say that you only sold two products a day. Just two. That's $100/day X 365 days/year. So, $36,500 a year. 20% of that is $7300. Then, 25% of that is... $1825 you'd be paying to ClixGalore a year!

If you only paid a 10% commission to your affiliate marketers (kinda standard amongst Work-At-Home-Moms but is not going to find you any Super Affiliates or get anyone very excited as many affiliate programs pay a LOT more-- even as much as 50%!), you'd still be paying ClixGalore $912.50 every year.

Whereas the cost of AssocTrac is only $677, which you can split up into 4 payments if you need to, a one-time fee that gives you telephone support for as many years as you use the program (email support and LiveChat, too).

You also get some valuable free bonuses and get a 90 day guarantee.

Here's what I recommend and will be doing myself:

Start an affiliate program for yourself. Period. If you have two wits about you, you will do this!! It's very low cost advertising and success in business is primarily marketing.

Start with ClixGalore if you can't afford AssocTrac. Then, when you can afford it, buy AssocTrac and either ask your affiliates with ClixGalore (if you can find out who they are) to switch over to you and then drop ClixGalore, OR keep both going! Then, you can compare the two and see which is beneficial. If your ClixGalore affiliates are bringing in money for you, great! That's money you wouldn't have had without those affiliates and you don't have to pay ClixGalore if you don't make money, so no worries!

It's the smartest thing that you can do for your business. Before you go joining any local trade fairs or buy ads in the newspaper or get yourself into the Welcome Wagon.... start an affiliate program. It is the lowest cost advertising that you can do. And because all the big companies do it, it raises your professional image if you do it too.

Where to Advertise Your Affiliate Program

If you have an affiliate program that is managed by your own software, you'll definitely want to put extra effort into getting the word out because you won't have a management company advertising your program for you!

Here are some excellent places to advertise your program:

Hope that helps!