Affiliates are the real moneymakers of businesses. You’re willingness to share a portion of the profit in exchange for new leads and more sales will improve your business a hundred fold. Setting up your affiliate system with a good company is just the start. The following are the things you must take note of when you’re managing your own affiliate program.

Product Prices

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?. Price becomes a non-issue only if you’re selling virtual (downloadable) items. However, for physical products, you must make sure that your price covers inventory costs and taxes before you think of setting up a generous affiliate program.

Commission rates

Of course you want to keep as much of that hard-earned money as you can, but you have to remember the target with an affiliate program. The thing is, these affiliates are not employees. They get paid only after they make a sale. If the affiliate commission is too small, they will look for other products to promote for free .

Affiliates will work hard for you if they know they are being rewarded fairly for doing so. Affiliates will be working for you for free until they create sales. The best affiliates set up websites to promote your products, and those things cost money. 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%. Software commissions are slightly lower because you may have to pay for technical support. For physical products, you can give out 10% .

Tracking Systems and Cookies

If you’re running an affiliate program, you should be familiar with 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.

A cookie with an affiliate’s referral code gets uploaded in a potential customer’s browser and stays there for the duration that you set up. A customer who visited the site once could return in a week or so with the intention of buying something. 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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