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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
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