July 31st, 2010 | 
Author: Affiliates are the real moneymakers of businesses. You share a portion of the profit to certain individuals in exchange for the leads they send in. The first thing to do is to set up your affiliate system. There are a few important things to consider during setup.
Pricing
If you’re going to split the profits with your affiliates, you need to go over the prices of your products. Does the current price of your products allow for an affiliate commission?. If you are selling digital (information) products this is likely not an issue. If you are selling physical products you will need to determine how much you can affordably offer in commission without cutting too much into your own profits.
Affiliate Incentives
You must make sure the incentive you’re offering will attract the most aggressive affiliates. Your goal must be to run a program attractive enough that affiliates will be happy and proud to work for you. If your incentives are not exciting enough, affiliates will go to your competitors.
Affiliates will work hard for you if they know they are being rewarded fairly for doing so. Affiliates will be working for free for your in exchange for a percentage of the profit. The most aggressive ones pour thousands into advertising just so they can sell your product. Research the exact amount your competitors are giving your affiliates.
Compute the amount you spent on product development, and include this factor when setting a percentage for your incentives and commissions. For downloadables, you can give as low as 40% and as high as 75%. If your product is a downloadable software, 20% is generous because you may have to pay a full time technician to deal with customer complaints and tech support. For products that have to be delivered, 10% is generous.
Cookies or Tracking Systems
Affiliate programs work through the use of cookies. A cookie acts as a tracking system that automatically reports which affiliate landed a sale. One more reason why your affiliates will join your program is cookie duration.
Cookies are useful for when a potential customer referred by an affiliate visits the sales page but doesn’t buy anything. A non-buying customer may decide to buy only after 20 days. If the cookie duration is for a month, the affiliate gets paid as long as the customer buys within 30 days.
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