How to Design an Affiliate Program (1)

In 1997, Amazon.com launched the first associate program. Since then the number of associate (or affiliate) programs on the Net has grown at an enormous rate and for a very good reason. Quite simply, a well-designed associate program is the best and fastest way to grow an online business.

However, the Amazon program has, at the time of this writing, some serious disadvantages for its specialised bookseller-associates. For one thing, customers referred from an affiliates site probably wont buy right off the bat. And if they return, they return directly to Amazon, not through the affiliates site. Guess what? No commission for that!

Just think what you could achieve with an associate program that offered a genuine partnership!

Is an affiliate program right for you?

Setting up an affiliate program is not easy. Here are the major issues:

There are many complicated technical and legal aspects that have to be executed properly.

You will need to figure out a way to screen applicants, or have a clean and easy way to weed out troublesome, poor performing or potentially embarrassing affiliates.

Youll have to distribute html code, graphics, logos, a "how to" manual... everything your associates need to set up their stores.

Youll need to develop a training program to help them maximise sales.

An accounting system to track sales commissions must be established. Set it up online so your affiliates can check their commission status at any time.

You should e-mail a weekly or monthly newsletter, which includes the commission report.

Checks must be cut and mailed every month.

Youll need to develop a marketing plan to build up your associate list.

Tech support for your associates has to be in place. Youll be amazed at the mistakes they make. In short, setting up an associate program is a lot of hard work!

Since it is a major commitment of your resources, make sure that the benefits of this sales strategy more than outweighs its costs. Consider three important factors when weighing the two:

The nature of your product(s) -- Does it make sense for affiliates to "sell" your products?

The quality and quantity of your resources -- Do you have the people and money necessary to start it, and to maintain it?

The existence of high-traffic sites relevant to your products -- Are there high-traffic sites that "fit" with your product and that would participate in your program? Once you have the answers to these three questions, answer the following...

Would you be better off deploying that time and money elsewhere? Three important thoughts

While building your affiliate program, keep these important points firmly in mind:

Your prospective affiliate will first of all assess your product. Do you sell a great product at a good price? If not, your affiliate program is doomed -- most people wont sell stuff that they dont believe in.

Make it easy to join. Make it easy to stay up-to-date as an affiliate. A powerful backend should transparently support your partner-affiliates. Of course, you should know that by now!

Affiliates will constantly measure you and your program against others. Execute.
23 October 2000

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