There are two sides to affiliate marketing.

One is being an affiliate, which was discussed in Affiliate Marketing.

The other side is being the Merchant: the one who designs, recruits and rewards affiliates for selling his products or services. This is sometimes referred to as Affiliate Management.

Affiliate Management was pioneered by Amazon.com, although there probably were earlier models that we are not aware of. 

Affiliate Marketing became popular because it allows merchants to promote their site, products and services through an unlimited number of partners/affiliates and pay only when their is a sale, lead or click.

Affiliates promote your site through the marketing materials that you provide. They put banners, text links or do email or autoresponder campaigns to promote your product. They do this with the objective of earning commissions when a visitor they refer to your site makes a purchase. This is referred to as conversion.

As an affiliate merchant/manager, your goal is to recruit affiliates, preferably super affiliates who will do the selling for you. As you learned in Affiliate Marketing, affiliates don't need to pay anything to be an affiliate. It's because no one will sign up to promote other people's site if you need to pay anything to do this.  To recruit affiliates, you need a well-designed program that will encourage people to sign up.

With so many affiliate programs around, affiliates are spoilt for choice. Here are some of their more important considerations.

Commission level - a commission of 5 to 15% is not attractive to most affiliates,

   especially if the base amount is small.

Cookie tracking - for how long will you be credited for a sale from the date of the first

   visit. The longer the tracking, the better. Thre are some Affiliate managers that offer up

   to three years or even lifetime. But there are some that only gives you credit for 7

   days. Personally, I would not sign up for anything below 30 days.

Easy sign up - If a program requires too much information and the sign-up procedure is

   too complicated, it can turn off some affiliates.

Payment Schedule - how is the commission going to be paid? How often? Monthly is the most

   desired. Every quarter is not so palatable, at least, for me.

Reputation - Who is offering the program?  If it is a pretty established company, affiliates

   will have greater trust signing up. For newcomers, it will be harder to convince people

   unless you sign up with a reputable third party affiliate management company.

Creatives - What kind of marketing support do you provide?  What is the quality

   of your banners?

Customer support - Will the affiliate be able to reach you if he has questions or concerns?

Easy Online Monitoring -  If an affiliate is actively promoting your product, he would like an

   easy way to track how much he is earning.

Conversion potential - Aside from commission, this I would say is the most important.

   Seasoned affiliates have an eye for high-converting products. If your product is not

   attractive and you do not have a compelling offer, affiliates will likewise be lukewarm

   to represent you.

Website quality - Most affiliates will check out your website or landing page first before deciding to sign up. A website that looks hastily put together will not attract super affiliates.

Follow-up -  Some affiliate managers are more diligent in follow-up; providing regular updates, new products to promote, new incentives, new creatives. Obviously these types of affiliate managers get higher priority with affiliates.

Should you decide to run an affiliate program, you need to have an affiliate management software. You have 2 options:

1. Run your own affiliate tracking software.

In this option, you buy your own software and administer the affiliate program yourself. Most programs basically do a good job at tracking but you still have to issue and send the payments by yourself. The advantage is that you don't have to pay a fee for every sale that your affiliate makes. If you would like to consider this option, I suggest you take a look at AssocTrac, a powerful yet simple to use affiliate management software. You can get a free 90-day trial copy here.

2. Use a third party affiliate management company

This is the option favored by most marketers as you do not have to worry about the administration side of things. Of course, this convenience comes with a fee. Here are the more notable third-party affiliate managers:

Clickbank -  Clickbank is the leading retailer of digital products in the Internet. If you have an e-book, software, members-only website, Clickbank is the affiliate manager for you. There is a one-time activation fee of $49.00

ClickBank purchases product from publishers at a wholesale price equal to 92.5% of retail, less a $1 stocking fee. Thus the typical markup is only $1 + 7.5% of the total purchase price, but when a customer is referred by an affiliate the markup costs you only a fraction of this amount.

When you pay a 33% commission, the markup costs you $0.67 + 5.0%.

When you pay a 66% commission, the markup costs you $0.34 + 2.5%.

There is a FREE built-in affiliate program includes over 100,000 active affiliates.

ShareaSale - One of the most user-friendly affiliate managers. You can choose to set up

   your   program to pay on a percentage per sale, per lead or per click. There is a one

   time of $350 and a deposit amount of $100. This is the most affordable of the

   third-party affiliate  managers.

Commission Junction - This site is known for having bigger companies as merchants.

LinkShare - LinkShare also prides itself for having big companies such as Dell,

   OfficeDepot,  American Express, etc.  Fees are not shown in the website.

PartnerCentric - Also one of the more reputable affiliate managers, offering a broad range of

   support services for merchants.  Fees are not disclosed in the site. Interested merchants

   need to contact them directly. 

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