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An affiliate program looks after the affiliate side of the business – tracking who refers the visitor, whether a sale is made and the commission payable.  Good affiliate programs also provide the ability to deliver marketing materials to the affiliates, different links for different promotions, sub affiliate referral tracking and a bit more.

Selecting the right affiliate program for your business depends on several things including how much control you want over the program and how you want to deliver resources to your affiliates to use.

Done For You Solutions – are solutions that are run and managed by a third party.  These solution providers will manage the referral software and systems, handle the affiliate signups and affiliate payouts.

The business owner will set up the links to the products and services pages, provide marketing resources and marketing guidance to the affiliates.

Organizations like Commission Junction, Share A Sale, Clixgalore and LinkShare are ‘done for you’ solutions.  A business owner becomes a publisher with the affiliate manager and affiliates sign up with them to promote your product.  When a sale is made – it’s made through the businesses shopping cart solution and through techie magic, the affiliate program is ‘told’ that a sale was made, and which affiliate made it.

At the end of the month (or whatever period), the affiliate program will pay your affiliates.

Generally, these solutions require the business to maintain a financial balance with the affiliate manager.  This provides a guarantee to the affiliates that they will receive their payments.

The affiliate manager will charge a fee (either as a flat fee or a percentage of sale) for the provision of this service.

A variation on this solution is Clickbank. Clickbank provides all the affiliate management functions and the payment processing as well.  When a sale is made Clickbank will take the payment and, after a certain period of time, will pay the affiliates and the business.  Clickbank will retain a percentage of the sale price as the fee for providing the service.

Clickbank does not provide the ability for the business to deliver marketing materials to the affiliates.  A separate system is required to support the affiliates.

Hosted Solutions – A hosted affiliate solution, is a system that is managed and maintained by a third party provider.  When using a hosted solution, the business will set up their own affiliate system, provide marketing creatives and take payments through their own shopping cart.

The difference between a hosted solution and a ‘done for you’ solution is that the business owner manages their own affiliates directly including the regular payment of commissions.

Most hosted solutions will charge a monthly fee for service.

AutoWebBusiness (1SC) is an example of a hosted affiliate program.

Self Hosted / Self Managed –With a self hosted / self managed affiliate program, a business owner will install and configure affiliate management software on their own web server and manage their own service.

With a self hosted solution a business owner has full control over how the program operates.  With the right solution, a business can offer varying levels of commission for different types of affiliates and provide excellent support to their affiliates.

The drawback, is that the business owner is responsible for the maintenance of the software.

Examples of self hosted affiliate management software include iDevAffiliate and WP-Affiliate.

Conclusion

There is no one right answer.  Each solution has its benefits and drawbacks which need to be considered in light of the businesses requirements.

Whichever affiliate solution, and then program, is chosen, a business needs to make sure it ‘integrates’ with the shopping cart (or payment processing) solution.

In addition to being one of the 100 Women in Ecommerce for 2012, Charly Leetham is a Online Business Implementation Expert who helps businesses harness the Internet as a sales channel. Charly provides services to solopreneurs and small business who wish to sell or promote their products and services online. For more information on creating an online community, visit http://askcharlyleetham.com/category/services/affiliate-management-programs for more information