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Set up an Affiliate Program for Your Business

start affiliate program

Are you ready to start your own affiliate program?

During the past three weeks, I’ve revealed three methods you can use for growing your company via the Internet (sampling, endorsed reciprocal promotions, and licensing). If you haven’t implemented any of these strategies, take a moment today to pick one that best fits your business model and implement it right away.

In addition, you’ll want to consider having an affiliate program.

Although Internet sales taxes have made it slightly less attractive than it used to be, running an affiliate program is a method of growing your business with minimal investment in the right affiliate management software and a good written affiliate program agreement prepared by an experienced Internet lawyer.

Are affiliate programs different from licensing? Yes.

Affiliate programs should not be confused with licensing.

When you license your products, the licensee makes the sale elsewhere (often on the licensee’s website) and then remits a cut of the sale proceeds to you as your profit.

In contrast, affiliates drive traffic to your site and get paid a commission on sales from traffic they send your way. You handle the sales (including client service) and pay the affiliates.

When running an affiliate program, it’s important to prescreen your affiliates with a questionnaire to ensure they’re a good fit plus perform due diligence. It typically takes less than 10 minutes to check out an affiliate application before making a decision on whether or not to approve the applicant. When in doubt, decline an application. Trust your gut if you sense something wrong.

Here’s an example of why prescreening affiliate applicants is important. One of my companies had a person apply to become an affiliate who had been banned by the U.S. Federal Trade Commission (FTC) from marketing activities both online and offline. A simple Google search of the applicant’s name with the word “fraud” revealed the two FTC lawsuits and bans.

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Mike Young, Esq.

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994 and is an angel investor in startups. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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