Paying only when it works: hard to make it more appealing for a small operation. That is the promise of affiliate marketing, and in principle it holds.
What holds less well is the part nobody examines before starting: deciding who gets credit for a sale when several channels contributed.
Definition
Affiliate marketing is a mechanism where a partner recommends your offer and earns a commission on the sales they generate, tracked through a link or code unique to them.
Three parties, one flow: the advertiser who sells, the affiliate who recommends, the customer who buys. Tracking works through an identifier carried in the link and remembered for a defined period.
The question that decides everything: attribution
A visitor clicks an affiliate link on Monday, does nothing, returns on Thursday through a search, and buys. Who gets the commission?
| Rule | Consequence |
|---|---|
| Last click | Favours deal and coupon sites |
| First click | Favours those who create discovery |
| Short window (7 days) | Cuts commissions on sales already won |
| Long window (90 days) | Pays for sales you would have made anyway |
There is no universally right answer, but there is a common error: a long window on last click makes you pay commission on customers who came from your own Organic traffic. Check that before anything else.
A commission is not free: it belongs in your Gross margin as a variable cost, and it must count in your CAC (customer acquisition cost). A 30 percent commission programme on a 40 percent margin product leaves almost nothing.
What makes a programme work
- Few affiliates, well chosen. Three partners whose audience is exactly yours beat two hundred inactive signups.
- A commission worth the effort. Too low and nobody bothers writing anything sincere.
- Ready-made material. Copy, visuals, arguments: whatever you do not supply will be invented, often badly.
- Visible tracking. An affiliate who cannot see their results stops after three weeks.
Frequently asked questions
What commission rate should I offer?
On a digital product, 20 to 40 percent is common, margin permitting. On a subscription, a recurring commission over twelve months motivates more than a one-off payment, and it aligns the affiliate with your Retention.
Do I need a dedicated tool?
Not before about ten active affiliates. Below that, one promo code per partner and a spreadsheet will do, and you avoid a monthly subscription weighing on your Break-even point.
How do I prevent abuse?
Explicitly forbid bidding on your brand name in ads, promises of results, and posting codes on deal sites if you do not want to pay for those. Whatever is not written into the terms will be done.
Does affiliate marketing replace an acquisition channel?
No, it complements one. It only produces volume if the affiliates have an audience themselves, which makes it dependent on their work. Excellent as a supplement, fragile as a sole source.