Affiliate Programs
Information Center

Affiliate programs (also known as referral programs or partnership programs) offer a way to harness the traffic coming to your website to generate revenue, without the complication and expense of selling anything yourself. Instead, you earn a commission for producing a transaction. What constitutes a "transaction" and how much it's worth will vary with each affiliate program. Affiliate programs are generally offered by sites selling goods or services, although some affiliate programs reward other types of transaction such as getting a visitor to sign up for a free newsletter, or download a screensaver.

Commission-based Affiliate Programs
Commission-based programs are by far the most common type of affiliate program. They are nearly always pay per sale programs, i.e. they pay a predetermined % commission on the revenue generated by the sale of products or services to a visitor who came from your site.
Some programs offer incentives to more productive webmasters in the form of an increased commission share on a sliding scale, or by offering their best-performing webmasters cash bonuses or prizes. Many programs operate on a flat commission rate, irrespective of the volume of sales. A few curious programs "penalize success" by capping or reducing commissions once affiliates go over a certain monthly revenue level (e.g. an affiliate program may pay out a maximum of $500 monthly commission per affiliate). Always read the fine print of the Affiliate Agreement carefully to avoid affiliate programs that tie your hands in this way.

Flat-fee Affiliate Programs (per-lead and per-sale)
Although somewhat less popular than commission-based programs, many affiliate programs operate on a flat-fee basis. Essentially, a flat-fee referral program will pay you a predetermined amount for every visitor who carries out at least one purchase or other transaction at the merchant's site, irrespective of the ticket value of that transaction. Flat-fee programs can be as simple as "US$10 per new customer" or "US$5 per order", or they can have more complex fee structures depending on what mix of products or services was sold and how many leads or sales the affiliate closed that month.
Some flat-fee programs operate on a per-sale basis. In other words, visitors have to actually purchase and pay for a product or service in order for you to qualify for the referral commission. Other flat-fee programs, such as those for loans and mortgages, insurance policies and so on, generally operate on a per-lead basis. Each qualifying lead earns you the referral fee. The criteria for qualification can range anywhere from "visitor supplies their name and address" to "visitor completes a multi-page survey and responds to an initial follow-up telephone inquiry." The exact criteria vary with each affiliate program.

Pay per click programs
Pay-per-Click affiliate programs (also known as click-through programs) pay a small amount for every visitor sent to the target site. Typical payments range from $0.01 to $0.20 or more per visitor. Some pay-per-click programs pay on a second-page-click basis: you will only get paid if a visitor from your site clicks on one of the links on the page they get to after reaching the affiliate site. Always read the details of each program carefully to find out whether you're going to be paid on a first-page or second-page-click basis as this will have a huge impact on your potential earnings. Typically, requiring a second-page click can cut earnings by 75%-90% compared to a straight click though program.

Single-tier Affiliate Programs
Single-tier affiliate programs offer the most straightforward tiered structure. Essentially, they are a flat program that rewards only direct transactions i.e. transactions that the affiliate has generated. There is no reward on offer for signing up other affiliates. Single-tier affiliate programs are suitable for any site; your earnings will depend entirely on how well you are able to "pre-sell" the product or service on offer, how many visitors you can send to the target merchant, and how well they are able to work to monetise your traffic.

Two-tier Affiliate Programs
Two-tier affiliate programs reward affiliates in two ways: they reward transactions generated by affiliates, but they also have a system in place to reward affiliates for bringing new affiliates into the program. This is the "second tier" part of two-tier affiliate programs.
Second-tier payments can be made on a commission or flat-fee basis. For example, an affiliate program might pay affiliates 20% commission on the transactions they generate, plus 5% of the total earnings of the affiliates that sign up directly under them (that's 5% of 20%, of course). Alternatively, they may pay a flat affiliate referral fee, for example "US$10 bonus for each new affiliate you refer that produces at least US$25 in sales."
Two-tier affiliate programs are good for affiliates who believe they can recruit other productive affiliates. 

Multi-tier Affiliate Programs
Multi-tier affiliate programs reward affiliates who sign up other affiliates several levels "deep". In other words, you sign up Bob and Bob signs up Sarah and Sarah signs up John, and you get a percentage of Bob's earnings, Sarah's earnings and John's earnings. The distinction between multi-tier affiliate programs and pyramid schemes is wafer-thin, and one which this site declines to pursue further. You will not find any coverage of multi-tier affiliate programs on SiteCash.com.