Affiliate programs make a large portion of online revenue today and their ROI can be extremely high compared to other online marketing solutions. Merchants pay a commission to websites and bloggers for referring new business to the merchant’s website. Publishers are paid when the referral results in a transaction. Because merchants only pay when there’s a transaction there is a better ROI by not paying for clicks that don’t produce conversions. When a reader clicks an affiliate link this will place a cookie on the reader’s browser that identifies the advertiser, publisher and commission.
The Federal Trade Commission has rules and regulations on how affiliate links are shared which can be read in 16 CFR 2555.5: Guides Concerning the Use of Endorsements and Testimonials in Advertising. It is required that when websites publish affiliate links they disclose to their readers when they endorse a product or service that they have a “material connection” to the seller.
CJ Affiliate is one of the largest affiliate programs online, they work with over three thousand advertising partners. Bloggers and websites share links generated by CJ Affiliate. Each merchant with CJ Affiliate offers different terms but payments are always timely each month. While CJ Affiliate is used by many people because of the ability to work with so many vendors in one place it is hard to use their system and the customer support is very limited.
Amazon has the largest affiliate marketing program with products from more than 1.5 million vendors. Their system is easy to use which makes it easy to set up. Amazon commissions start low at 4% for small affiliates and go up to 9% for higher traffic affiliates. Another drawback to using Amazon is that their payment terms mean it takes more than 60 days to receive your payment.
Affiliate programs have become an excellent way for publishers to create a source of revenue on their website. It is important to research the company you are interested in some of the things to look out for are merchants that don’t give credit for the clicks that publishers think they deserve, or occasionally publishers get terminated from their contract unexpectedly.