How Affiliate Programs Work

If you are just considering joining affiliate programs but not sure how affiliate programs work then this article is for you. Keep reading to learn how to get start in web hosting affiliate programs, what to expect, and how to track your affiliate sales and payments.

If you were going to construct an organizational flow chart for an affiliate program you would have a triangular model with three principal players – the merchant, the affiliate, the customer.  This symbiotic relationship involves the customer visiting the affiliate's website, the affiliate sparks an interest in the customer for the merchant's services or product through advertising or recommendation, and then the affiliate directs traffic to the merchant.  Lastly, if the referral results in a sale or other agreed upon action by the customer, the merchant pays the affiliate a commission.

No where has this form of customer recruitment become more popular and profitable for affiliates than the area of web hosting.  It's well deserved reputation for high payout returns also has made web hosting referral programs one of the most competitive and well marketed areas.  To that end it's imperative to have a grasp of the basic ins and outs of how web hosting affiliate programs work, and be aware of what it entails before trading the family cow for a handful of magic beans.

The Initial Step
The initial set up of an affiliate program with a web host, must start on the side of the web host.  Once a web host has set-up an operational affiliate program, and a tracking and payment system, then they are basically open for business.  A web host can establish a relationship with an affiliate in a variation of one of two ways.  First, they can offer pre-designed banners, pop-up ads, info boxes, and the like, that affiliates tack on to an existing website or website written and designed to act as an affiliate.  Logically the most successful existing websites to use as web host affiliates are those which already fall within the perimeters of similar services, content, or products.  So, a website that has tutorials for web design is more like to benefit as an affiliate web host than a children's clothing website which is much less likely to find interested customers.

Option two falls within the range of creating new websites specifically for promotion of the merchant.  Almost always these are not overt attempts to sign up customers or make a sale, but rather focus on educating the customer about the merchant.  These can take the form of blogs, reviews or ratings of the merchant company or a comparison to a list of other web hosts.  Obviously in these scenarios affiliates and merchants work closely together to present a comprehensive message.  In these types of more advanced marketing and content websites there is a necessary level of experience and technical background to be a more viable affiliate.

Under Contract
Once you've decided on an approach you're competent and comfortable managing, it's time to shop merchants and find a reasonable and reliable program. Once both parties are in agreement that a business relationship is mutually beneficial, then affiliates are put under contract.  These contracts should always include payment terms, but just as important are details regarding returns (customers that sign up and then cancel), tracking capabilities, and delayed sign ups.  In the case where someone who was referred by your affiliation signs up a month or two after your initial lead, will you still receive the commission?  Make sure you know how long your cookies will last under the contract agreement.

Payment Options
Let it be noted that the best advice is to contract with a merchant in league with an affiliate network and a reputable tracking system which you can access.  Affiliate payment options vary to each host.  Some pay a straight commission or a sliding scale commission based on your returns.  Others pay per sale or per other agreed upon action.  Some give you the option to choose which type of payment option you prefer where others are set in stone.  There is not necessarily one payment option better than the other, but it's more a factor of figuring out what will work best with your situation.  If you are gangbusters about making this a booming business and are well versed in the tactics necessary to land a high volume of customers, than go for the hosts who pays higher commissions based on how many customers you bring to the table.  If this is a first attempt or merely a little revenue generator then go with a host who pays a nice straight price per sign up.

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