What is an Affiliate Program?

TL;DR: An affiliate program is a marketing arrangement where businesses pay commissions to partners who refer customers. Unlike general affiliate marketing, an affiliate program is the specific system and structure a company creates to manage these partnerships.

Quick Answer

An affiliate program is a formal system set up by a business to recruit, track, and compensate partners (affiliates) who promote their products or services. It includes commission structures, tracking technology, promotional materials, and payment systems—all managed through a platform like LinkJolt.

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How Affiliate Programs Work

The Core Components

1. Program Structure

   • Commission rates (percentage or fixed)
   • Cookie duration (tracking window)
   • Payment terms and thresholds
   • Terms and conditions

2. Tracking System

   • Unique affiliate links
   • Coupon code tracking
   • Conversion attribution
   • Real-time reporting

3. Affiliate Management

   • Recruitment and approval
   • Communication tools
   • Marketing materials
   • Performance monitoring

4. Payment Processing

   • Commission calculations
   • Payout schedules
   • Payment methods (Stripe Connect, PayPal)
   • Tax documentation

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Affiliate Program vs Affiliate Marketing

Affiliate Program	Affiliate Marketing
The system created by merchants	The strategy used by affiliates
Company-side setup	Promotion-side activity
Includes tracking, payments, terms	Includes content, promotion, traffic
One program, many affiliates	One affiliate, many programs

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Types of Affiliate Programs

By Commission Model

• Pay-per-sale (PPS): Commission on completed purchases
• Pay-per-lead (PPL): Payment for qualified leads
• Pay-per-click (PPC): Compensation for traffic
• Recurring commissions: Ongoing payments for subscriptions

By Industry

• SaaS affiliate programs: Software subscriptions (20-40% typical)
• E-commerce programs: Physical products (5-15% typical)
• Financial services: Credit cards, loans (high fixed payouts)
• Online courses: Education products (30-50% typical)

By Structure

• In-house programs: Managed internally by the company
• Affiliate networks: Third-party platforms (ShareASale, CJ)
• Hybrid models: Combination of both approaches

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Key Metrics for Affiliate Programs

Metric	What It Measures	Good Benchmark
Conversion Rate	Clicks to sales	1-5%
Average Order Value	Revenue per sale	Varies by product
Commission Rate	Affiliate payout	15-30% for SaaS
Cookie Duration	Tracking window	30-90 days
Active Affiliates	Engaged partners	10-20% of total

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How to Start an Affiliate Program

Step 1: Define Your Structure

• Set commission rates based on margins and LTV
• Determine cookie duration
• Create terms and conditions
• Plan payment schedules

Step 2: Choose Your Platform

• LinkJolt: Best for SaaS with Stripe (0% fees)
• Rewardful: Good for subscription businesses
• FirstPromoter: Feature-rich option
• PartnerStack: Enterprise-focused

Step 3: Recruit Affiliates

• Reach out to existing customers
• Partner with industry influencers
• List on affiliate directories
• Create an affiliate landing page

Step 4: Provide Resources

• Marketing materials and creatives
• Product information and demos
• Promotional guidelines
• Regular performance updates

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Benefits of Running an Affiliate Program

For Businesses

• Performance-based costs: Only pay for results
• Extended reach: Access new audiences
• Social proof: Third-party endorsements
• Scalable growth: No upfront marketing spend

For Affiliates

• Passive income: Earn from referrals
• Monetize audience: Turn traffic into revenue
• Flexible work: Promote from anywhere
• Multiple income streams: Join many programs

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Common Affiliate Program Mistakes

❌ Setting commissions too low - Top affiliates won't promote ❌ Long payment delays - Affiliates prefer fast payouts ❌ Poor tracking - Leads to disputes and distrust ❌ No marketing materials - Affiliates need resources ❌ Ignoring fraud - Can destroy program profitability

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FAQ

How much does it cost to start an affiliate program?

With LinkJolt, you can start for free with our Starter plan. Most platforms charge $50-$500/month, plus transaction fees. LinkJolt charges 0% transaction fees on all plans.

What commission rate should I offer?

For SaaS products, 20-30% is standard. Consider your customer lifetime value—if LTV is high, you can afford higher commissions to acquire customers.

How long should my cookie duration be?

30 days is standard, but 60-90 days is more attractive to affiliates. Longer cookies mean more attributed sales.

Do I need a lawyer to create affiliate terms?

It's recommended for enterprise programs. For startups, template terms work. LinkJolt provides agreement templates in our Affiliate Agreement Generator.

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Start Your Affiliate Program with LinkJolt

LinkJolt makes launching an affiliate program simple:

• ✅ 5-minute setup - No coding required
• ✅ 0% transaction fees - Keep more revenue
• ✅ Stripe integration - Automated tracking and payouts
• ✅ Real-time analytics - Track performance instantly
• ✅ Fraud protection - Built-in security

Launch Your Affiliate Program →