Establishing your own affiliate system can be either simple 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 offer.

In terms of your affiliate systems, there are two options for your business: outsource the entire system or manage your own affiliate system through your own web host. Each one is noted its own advantages as well as disadvantages.

If you have a small network of affiliates, then you can run your own affiliate software. If you decide to recruit a large number of affiliates, then you will probably need an external business to help you manage your network. The reason for this need is because you'll find it easer to deal with a large number of sign ups, track payments, monitor clicks, and so on if outsiders help you sort it out.

Kinds of affiliates

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

The other type is the pay per lead option, where you pay only for traffic. With this type, the affiliate is paid only if a visitor is generated from the affiliate's link. It's attractive to affiliates although costly to website owners, due to the likelihood of non-sale visits.

Things to keep in mind

When setting up an affiliate network, something to consider is whether you'll approve affiliates automatically or manually. It's generally recommended to start affiliate programs with your established customer sites then progress to new ones.

If you opt for the pay per clicks program, you may have to control the affiliates because 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 evaluate 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 compensate affiliates with a percentage of what you receive from customers. To do this, you can rely on software such as Affiliate shop to assist you in tracking and managing commissions.