Why brands run affiliate programs
Affiliate marketing is pure performance: you set a commission, partners send traffic, and you pay only on a confirmed sale or lead. There's no upfront ad spend and the risk sits with the affiliate, not you. For most ecommerce and SaaS brands it becomes one of the highest-ROI channels precisely because the cost is variable and tied to revenue.
The catch: a program only works if affiliates choose to promote you over the thousands of other offers competing for their traffic. Everything below is in service of that.
The three models: in-house, network, or SaaS
- In-house on SaaS software — you run the program on a tool like Rewardful, FirstPromoter, Tapfiliate, or Refersion. You keep the relationship and the data, pay a flat monthly fee, and recruit affiliates yourself. Best for most startups and DTC brands.
- Network — you launch inside Impact, ShareASale, CJ, or Awin and tap their existing affiliate base. Faster reach, but higher cost (setup fee + override on commissions) and less direct control.
- Hybrid — many brands run SaaS software for their core partners and a network for reach. Start with one.
The full trade-off — pricing, control, and which tool fits which business model — is in the affiliate management software guide.
What it costs to start
- SaaS software — roughly $50–$300/month to start, scaling with affiliate count or tracked revenue.
- Networks — a setup fee (often $500–$5,000) plus a 20–30% override on top of the commissions you pay.
- Commissions — your real cost, paid only on results. Budget by your margins, not a fixed number (see commission rates).
The decisions that make or break it
- Commission — competitive enough that affiliates choose you, affordable against your margin and LTV.
- Cookie window — 30–90 days is standard; too short and affiliates won't bother.
- Terms — spell out brand bidding, coupon rules, and what counts as a valid sale up front. Vague terms cause disputes and fraud.
- Tracking — accurate last-click attribution and reliable postbacks. Affiliates leave programs that don't track their sales.
Assets and launch
Before you recruit, give affiliates what they need to promote: tracked links and deep links, a few creative sizes, a product/data feed if you have a catalog, and a one-page program summary (commission, cookie window, terms). Then start recruiting — your own customers first, covered in how to recruit affiliates.
Common first-program mistakes
- Setting commissions too low to compete, then wondering why no one promotes.
- A cookie window so short affiliates can't earn on a normal buying cycle.
- Launching with no creatives or unclear terms, so good affiliates pass.
- No plan to recruit — a program with no affiliates is just software you're paying for.