Affiliate programs will enable a business to generate
a lot of traffic and therefore boost sales through
promotion by third party sales or sites. It's also
a cost effective way to advertise your products and
services as you pay only for the efforts that
actually turn into sales.

Setting up your own affiliate system can be either
easy or overwhelming, all depending on how many
affiliates you want to recruit, as well as your
payment policy and the type of product that you are
offering.

As for your affiliate systems, there are two options
for your business - outsource the entire system or
run your own affiliate system through your own
web host. Each one boasts its own advantages as
well as disadvantages.

If you have a small amount of affiliates, then you
can run your own affiliate software. If you plan
to recruit a large number of affiliates, then you
will probably need to outsource. The reason for
this, is because you'll find it easy to deal with
a large number of sign ups, track payments, monitor
clicks, etc.

Types of affiliates
There are numerous types of affiliates out there
to choose from. There's the pay per sale, there
an individual is paid only if a sale is generated
from the affiliate's link. It's the least attractive
to people, unless the product is in high demand
and the most profitable for business.

Another type is the pay per lead, where you pay
only for traffic. With this type, the affiliate
is paid only if a visitor is generated from the
site of the affiliate. It's attractive to affiliates
although costly to web site owners due to the
possibility of non sale visits.

Considerations
When setting up an affiliate, something to consider
is whether or not you'll approve affiliates manually
or automatically. It's normally recommended to
start affiliate programs with your established
customer sites then progress to new ones.

If you are dealing with pay per clicks, you may
have to control the affiliates as the quality of
visitors will be a huge factor when it comes to the
generation of sales. By manually reviewing, you'll
also be able to judge the website or individual
affiliates to see if it's in the best interest of
your company.

If you decide to use your own affiliate system, one
of your biggest challenges will be how to pay
affiliates a percentage of what you end up receiving
from customers. To do this, you can rely on software
such as Affiliate shop to help you track and manage
commissions.