There are a handful of issues to contend with when paying affiliates.
Items to be addressed include the payment frequency (how often you’ll be paying affiliates), minimum payment or payment threshold (amount an affiliate must earn to generate a commission payment), levels (increased commission based on performance), and payment structure (sale, revenue share, lead, click, or hybrid).
Also, you’ll need to decide whether you will have two tiers in your affiliate program. This is an arrangement where you will enable affiliates to recruit affiliates below them and earn a percent of the transactions generated by those referred affiliates.
And you will have to work out if you will pay residual earnings to the affiliates – paying for the lifetime of the customer versus paying the affiliate only on the specific transactions referred.
Then there is the matter of actually paying your affiliates. If you are working with an affiliate network, this is typically an included service.
Otherwise, you can outsource to a third party. In the past, I’ve done this through a payroll company, such as Paychex. You could also process the checks internally via your payroll or accounting department.
Finally, there are the different ways you can pay your affiliates.
Payment by check is probably the most common method for issuing affiliate commissions, and those affiliates earning larger amounts frequently prefer to be paid by direct deposit.
More recently, affiliates have the option with some affiliate programs to receive their commissions through PayPal and similar electronic payment services.
In some cases, the merchant will enable affiliates to accept payment in store credit. Amazon.com is one example that comes to mind, and since I’m a frequent customer there, I take my commissions in store credit.
Affiliates will appreciate having as many options as possible to receive their commissions, so don’t hesitate to ask if there is a method they would prefer that isn’t currently available.
Go back to the Successful Affiliate Marketing for Merchants Video Book.