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Affiliate programs explained
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Affiliate Programs Explained
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Commission structures

The agreements between merchant web sites and the Webmaster running the affiliate program change according to the needs of the site. There are a few basic kinds of agreements that define what the action by the customer needs to be in order for the Webmaster to be paid the commission.

Each of the different agreements has advantages and disadvantages. A disadvantage can turn into a positive thing for different sites depending on the needs and goals.

Pay per click
in this agreement the merchant web site will pay the Webmaster if the customer clicked into their site. There is no importance in this agreement to what the customer will do after he entered the merchant site. Once he clicked, the condition was filled and the Webmaster will be paid the sum of money that was agreed on.

Pay per lead
In this case the payment is conditioned by another action the customer needs to do once he entered the site. This action - a lead is signing up and leaving details for the use of the merchant web site. Once a customer performed this action and left his details the merchant web site will pay the Webmaster as agreed.

Pay per sale
This is literally an agreement based on the sales that are made. If a customer referred by an affiliate program buys the product the merchant web site will pay the Webmaster either a percentage of the sale or a predetermined sum of money, depending on the agreement.

 These are the basic agreements that exist. Based on them, a merchant site can decide on different variations and actions that he would like the customer to do and that he will benefit from in order to create a new kind of agreement.

Two of the popular variations are the following:

Two tier program
This is a program that works in a similar way to MLM programs (multi level marketing) in this agreement the affiliate program webmaster gets paid not only for traffic that he refers to the merchant site but also on new webmasters he recruits to the certain affiliate program. Even more, he is paid for the traffic they bring and so on. The agreement will specify what the payment is on each generation and what the limits are.

Residual program
In these agreements the affiliate program webmaster can continue making money even after the first sale was made by getting a percentage of all the payments the customer will pay the merchant site in the future, such as a monthly payment for a continual service or new purchases made by the customer.

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