Marketing a business is hard work, and can be very costly. Many businesses wish they could just get people to do it for them. Affiliate marketing seems to make that possible, and even better, spends advertising dollars where they do the most good - on actual results, not on window shoppers. But the whole thing is a bit more complex than it seems. It can work, and does work, for many businesses. Here is what you need to know to get started with your own affiliate program.

Any business with a salable product which customers pay for can use an affiliate program to increase sales. An affiliate program consists of recruiting people who like your product, or who have a venue for advertising your product. You pay them a commission on any sales they generate - sometimes payment is made by "click-through" which means that payment is made if the visitor clicks on your ad link to visit your site. This is the most simple description.

On the web, it means that someone with a website places a coded link to your store on their website. When someone uses that link to come to your store and makes a purchase, you pay the website owner a percentage of the sale. Links and purchases are tracked with software. Affiliate programs have proven very lucrative for several large businesses, Amazon.com being the most impressive example. Nearly ever professional and aspiring professional website has a link to Amazon.

Staring an Affiliate Program of Your Own

You have two general choices for starting an affiliate program. The first step is the same, whether you run your own, or hire it out.

Decide your compensation. How much are you going to pay your affiliates per sale?

If you have a product that sells for a known amount, you can say, "$1" per sale, or something like that. Affiliate programs pay anything from $.25 per sale to $10 per sale (or up), depending on the product and the value. Only use this if people are likely to purchase just a single item.

If you have a store where the value of purchases always varies, then you can set the payment at a percentage of sale. Affiliate programs pay between 1% and 10%. Usually they hit somewhere between 2-5%. Consider how much you can afford, and consider how valuable this resource will be to you. Since you only have to pay this on actual sales generated from links, these are 100% effective advertising dollars.

Choose the method of establishing an affiliate program. There are basically two methods: Hire it out, or do it yourself.

Hire it out

There used to be many companies that offered affiliate program management. They have basically boiled down to one industry leader - Commission Junction. When you sign up with Commission Junction, they manage your affilate program for you. They will track leads, market your program (along with tons of others...you don't get special attention, they just maintain a marketplace of affiliate programs), and they will distribute your payments to the affiliates. You don't have to do anything but cut them the check each month for the affiliate commissions and CJ's own fees that they charge you. Again, because the dollars are spent on 100% effective advertising, many businesses feel that it is worth it to pay Commission Junction for the service.

Do it yourself

If you choose to do it yourself, you soon get lost in a mire of details. Let's see if we can simplify that! Here is a step by step list.

1. Affiliate Tracking software. You must have this. You must have a means of tracking when an order comes from someone else's site. If you use Mal's shopping cart, you can add on mTracker which will do this. You just put a link to his affiliate page onto your site, tell his site what your instructions are to your affiliates, and his site issues them a unique ID and code to track their click-throughs.

2. Set up your Affiliate page. You must have a link to a page on your own site, and set up that page with instructions for your affiliates. It needs to contain details about what you are offering, what your requirements for affiliates are, and any other perks you offer (like instructional pages for affiliates, etc). Be detailed, nobody likes to sign up unless they know fully what they are signing up for.

3. Set up your Affiliate Resources pages. After an affiliate joins, you want to offer them some kind of information on how to sell successfully. Even if that page just lists links to someone else's info pages about working an affiliate site. When they succeed, you succeed, so you want to make sure you give them information if you can.

4. Make your affiliate links. Create several links that you can either rotate through, or that you can let affiliates choose from. Generally you need a small image, a large image, and a text link. The images need to be uploaded to your webspace so that the affiliates can link to them.

5. Market your affiliate program. Do this the same way you market anything else, by letting the web world know that you have an affiliate program. Get onto the web and find sites that relate to your product, that would compliment it, and either offer them the chance to put an affiliate link on your site, or ask if they will link to your site. Find directories of affiliate programs and list there. If you have an email database of existing customers, whose permission you have to email them company updates, then send out a general announcement. Satisfied customers make the best affiliates because they genuinely believe in your product.

6. Manage your program. Mal's will track payments due, you just have to write out the checks. You will want to track which links make you the most profit also. You can do this by sending them to different pages.

7. Go back periodically and make sure that your website is an effective store. It does not matter how many customers come to your site if your site is not well enough designed to inspire them to actually make a purchase. More customers do not equal more purchases if the site design or sales system contains fatal flaws. If your customers fail to purchase, then your affiliates will eventually drop you from their sites. After all, they need to be successful too.

Affiliate programs have really grown on the web because when they are done right they do make money. They are not a magical recipe for instant success though, like everything else online, they take time to gain momentum, and many of your affiliates will be just starting out themselves, so you will become more successful as they do.

You can setup a separate affiliate program with a separate compensation level if you want to also. You might want to do this if you offer one level of compensation for fundraisers, and another for standard affiliates. Since you can set up your program to require approval before anyone can go active, you can screen the applicants and limit the causes to ones you believe in. A great way to benefit your business with more sales, and worthy causes with needed funds!

Setting up a program is not hard, though it does take some thought and planning. It is so little work though for the potential return, if you have a store that it could help, you really have little to lose by trying.

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