Learn how using Affiliate Programs will help you promote your business effectively.

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But you should understand the different types of programs and how the different commission structures work before you launch one of your own.

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, you have two basic choices: Outsource by joining an affiliate network or go the independent route. If you have a sufficient budget, an affiliate network, such as BeFree.com, LinkShare.com, or Commission Junction, can handle the basic development and implementation of a program. They handle all of the day to day functions and data gathering, and you just make sure you have enough money in their account to pay your affiliates. Almost painless. Let them handle your affiliates and you concentrate on your business. There are many affiliate networks out there, but all are not created equal - go with a company that is established, such as those noted above.

Another affiliate network is ClickBank. A good option, if you don't have the capacity to accept credit card payments. They are a third party credit card processor and have a built-in affiliate program that you receive as a perk.

More third party programs that will manage your program:

AdReporting  :  Share a Sale   :  My Coupons

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If you go the independent route, you'll need to develop the entire program yourself, from deciding which of your product offerings will be included in the program and choosing a program model, to drafting legal agreements and determining evaluation criteria for membership. But before you begin, it's best to do your homework. This includes conducting research to see what affiliate programs already exist in your space, as well as what your target market is looking for.

Create a user-friendly registration area on your site for potential affiliates that includes instructions, benefits, terms, disclaimers, and contact information.

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Specifically, examine the following points of interest:

Commissions paid to affiliate members typically fall into one of the following two forms:

Straight commission
Also called standard programs, under this most common of all affiliate varieties, you pay a straight commission (typically 5 percent to 20 percent monthly or quarterly) for all sales referred by affiliates.

Two-tier programs
This commission structure is similar to multilevel marketing. You pay affiliates a high commission on sales referred from their own site, as well as a smaller percentage on referrals from all sites that they recruit for the affiliate network.

It is always necessary to present your affiliate members with legal agreements that will protect both parties. Common elements of an affiliate agreement include:

• An overview of enrollment terms of the program, linking, and graphic identification procedures

• Order-processing procedures

• An explanation of referral fees and referral fee schedules

• Pricing policies

• Licensing guidelines

• Specific responsibilities of the affiliate site

• Terms of agreement, modification, relationship, and liability disclaimers

• An independent investigation clause, which states that the affiliate understands
  all the terms of the agreement

Software & Resources For Developing Your Own Affiliate Program

AffiliateShop

Affiliate Tracking

MyAffiliateProgram

Mal's eCommerce
Free shopping cart system with a built in affiliate tracker.

SimpleScript
Extra easy script to set up your own affiliate program.  It handles the registration and tracking process. This is a definite one to look at.