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Affiliate Programs: The Good, the Bad, and the
Lifeless
You may be familiar with affiliate programs, in which merchants cooperate with
partners to bring in more traffic and sales, rewarding affiliates with a cut of the
earnings. Although a few other businesses had experimented with this model
earlier, Amazon.com started the first mainstream “associates” partnership back
in 1996, inviting its customers to join as revenue-sharing partners.
Since then, almost every major retailer has come up with some kind of
affiliate program, as have many small businesses of all kinds. You can start your
own affiliate program very easily (a four-step startup guide is available for free
at 100startup.com), and this can be an easy way to franchise yourself. Do it right,
and hundreds of eager affiliates will line up to promote your work. Do it better,
though, and you’ll create a true partnership that will bring you steady income
over time no matter what else is happening in your business or the general
economy.
It works like this:
There are two big problems with most affiliate programs. First, the merchants
tend to pay very small commissions, leaving little for the affiliate who sent them
the referral in the first place, and second, the affiliates tend to do no more than
blindly pass over referrals. Big problems create big opportunities, so a good
merchant can offer a better program by paying much higher commissions to start