With The Minimum Of Effort And Expense
It’s so frustrating.
We all know that affiliate programs are a powerful marketing tool – but what they don’t tell you is the problems you can encounter if you’re outside the USA.
The majority of your affiliates, and indeed your customers, will most likely be US based and expect to pay and be paid in $US. Except if you’re not in the US yourself you have a problem, don’t you?
What is an e-business owner to do?
If the currency conversion factor weren’t trouble enough how are you actually going to pay your affiliates? In the UK for example, I can write checks in $US from funds in my British business account but each one has to be individually ordered from the bank – at my expense – and can take a week or more to be ready. If you have a decent number of affiliates you could spend your whole life sorting out these checks (or cheques – as we spell it in the UK) – and going bust through the bank fees in the process!
Here, therefore, are a range of solutions that are being used by other business owners at the present to give you some food for thought…
The solutions available to you at the moment can be broadly arranged into three categories – either you send out checks to your affiliates, you get someone else to do it for you, or you transfer money digitally from your account to theirs.
Sending checks is the age-old method that has been used ever since affiliate programs first came about, and is far and away still the most common method used on the Internet.
However it has a major downfall, especially if you’re sending out checks in a currency different to that in which the affiliate would like to spend it.
Your affiliates work hard all month promoting your affiliate program, testing out adverts in ezines, submitting pages to the search engines, getting involved with forums etc. to earn a nice juicy commission by the end of the month.
Merchants often takes 7-14 days to send out affiliate checks. Checks take 7-14 days to arrive at the affiliates office as they have to travel by airmail. Then the check itself takes 7-28 days to cash, with a large commission taken by the bank to convert it from your currency to whatever is the affiliate’s native currency.
And all that’s if the check doesn’t get lost in the post first.
Result – lost money and anything up to 2 months (!) before the commissions earned are actually "spendable" by your affiliates.
Trust me – there are a lot of affiliates out there looking for another way to do business. Also appreciate that there are a *lot* of affiliates out there, and quite a few who know what they’re doing. If your affiliate program can stand out from the crowd you’re half way there to "stealing" affiliates off your competitors.
So yes, affiliates can be paid by check. Some of the biggest names in the business still do it this way, but can be inconvenient for both you and your affiliates. You can send out checks in your native currency from your standard bank account and let your affiliates cash them and get charged the fees.
However, with $US being the international currency of business, and as most of your affiliates will be from there, you’re best to get a $US bank account in your own country from which you can send out $US checks. Oh, and don’t forget that check printing software is available these days for those sending out large numbers of checks each month.
Remember in this instance you also have to individually stuff all the envelopes, which you’ve already addressed, with the correct affiliate check, get the postage right on each one, and post them out.
As I’m sure you’ll agree, this doesn’t really fit with our "minimum effort and expense" model. One way to reduce all this is to set minimum payout levels.
By refusing to send out checks to affiliates until you owe them at least, say, $100 (which is a typical value), the number of checks you need send out each month will be greatly reduced, as will your costs. $100 is not an excessive sum of earnings either for the experienced affiliate.
But how can we make our lives, and that of our affiliates, run even smoother?
Our second category of possibilities is letting another company send out our affiliate checks.
This definitely makes our life easier – the company we outsource to keeps records of what each affiliate is owed, then sends out checks to them when they reach the designated minimum payout threshold.
One such company is Clickbank, who have quite a good reputation and we ourselves use them regularly. They will allow you to process credit cards for digital goods like ebooks and downloadable software. They essentially have two "levels" of accounts. You sign up for the full version so you can process credit cards, and when you sign up affiliates, they get everything you do, without the ability to accept credit cards, for free.
So it costs them nothing to sign up. When a sale is made from your site as a result of traffic sent by that affiliate, the profit is split between the two of you (you specify the percentage the affiliate will get) and your respective takings are placed into your respective Clickbank accounts.
Clickbank pays every two weeks, and you need to deal with nothing to ensure your affiliates are paid correctly and on time. This really is the most hassle-free and cost-effective way of doing it.
One downside to this method is that Clickbank’s affiliate software itself isn’t the most powerful software on the face of the planet. Affiliates can only see their sales – they can’t view the number of click-throughs or direct traffic to any more than one individual product or web page.
In addition, as affiliates sign up at Clickbank, rather than at your site, you don’t have their details so you can’t email them later with information on new product releases or advice on improving sales, and some would argue that it simply looks unprofessional to send potential affiliates off to another site to sign up.
Lastly, don’t forget that as I said, Clickbank will only process orders for digital goods. If you’re going to sell real-world products – CD’s, jewellery, clothes etc. you’re going to need to look elsewhere.
Having said that, many major businesses still use Clickbank, despite the few weaknesses simply because it is so hassle free – and I know of a few people who take literally tens of thousands of dollars each month through their account.
Another option for you, at the other end of the scale, though this may well prove too expensive to be worthwhile unless you’re a large business, is one of the affiliate management companies such as Commission Junction.
Commission Junction will run your whole affiliate program for you – tracking all visitors and sales etc. then send out checks to your affiliates. They work with a vast number of different merchant accounts so you are almost certain to be able to integrate it with your site.
As Commission Junction is such a well-known brand online you would also be benefiting from the extra trust you would naturally attract from affiliates when they know they’re dealing with such a reliable third party intermediary.
However, the reason I say it may prove too expensive for you is that at the time of writing they charge a $2250 set-up fee, they take a percentage of each commission paid out to affiliates, and require a $250 annual fee. On top of this, you have to set up a $3000 initial deposit for Commission Junction to use to pay your affiliates, with a minimum balance maintained at all times of $500.
Expense aside though, if you can afford it, I think you could do a lot worse than deal with Commission Junction. Another real benefit of the service is that they already have thousands of affiliates promoting other advertisers who use their services.
When you sign up, CJ actively promote your site, by ensuring it is placed on the main login page for all affiliates for a period of a month, and including you in it’s regular email bulletins of new merchants.
This way, your program can be off to a flying start with affiliates being attracted fast and with little effort from you, meaning you should see a rapid increase in sales when you launch.
Possibly the best option of all though in this category is to take the middle road – an option in between the other two – both much more powerful than using Clickbank, but also much less costly than using Commission Junction.
This method involves using the company Affiliate Tracking.
First and foremost, Affiliate Tracking is, no prizes for guessing, a powerful piece of affiliate tracking software. It does pretty much everything you could ever want a piece of affiliate software to do – but has two important gems built into it.
Firstly, it works with a massive range of different merchant accounts and third party processors, including Paysystems, Clickbank, Cybercash and 2CheckOut. For those starting out, who may decide to go for the third party option so they’re not liable for monthly fees if things don’t work out, you can therefore be set up very easily, with a powerful piece of affiliate software, and at a very reasonable cost, by using this software.
The pricing depends very much on how many visitors you’re expecting to receive, but a basic set-up will set you back the very reasonable cost of $39.95 a month at the time of writing. Add the $50 for a decent third party account (such as 2CheckOut) and you’re looking at less than $100 to get set up, which the average web site can easily make back in it’s first 4 weeks of trading.
Secondly is the way in which Affiliate Tracking will track all your affiliates sales, and when commissions reach a minimum payout threshold (which you specify) of, say $50-$100 in commissions, which is pretty average, they send out the check to your affiliate. They charge a fee of $2.50 to do this, but I think this is still quite a good deal as they make your life so easy.
One other benefit of a service like this is for non-US business owners, for whom sending out commission checks in $US could prove to be both very expensive and very time consuming.
Doing it this way makes life a lot simpler – you wait to be emailed once a month with an invoice for the total amount due to your affiliates, plus their small fee, and wire that one amount through simply and easily to them. They then do all the magic.
Our third and final category for consideration is directly transferring money to your affiliate’s accounts.
Whilst I am personally not a fan of using Paypal to accept credit cards for numerous reasons, it can be a very useful way to pay your affiliates.
You see, they have a feature known as "Mass Pay". Using this feature you can upload a spreadsheet of account holders and how much you owe them, click the button and the money is in their Paypal account within 24 hours.
They can then choose either to use this money to buy from other Paypal enabled merchants, or arrange easily to have it deposited into their nominated bank account. And this happens with very little expense to either party, very quickly, and Paypal takes care of all currency conversion. No more lost checks either.
And that’s why I think this is probably the most powerful category of all – as it benefits everyone. The only drawback is the requirement for this method is that it requires your affiliates to sign up for a Paypal account if they don’t yet have one, then sign up for your affiliate program too.
One notable piece of software which integrates both with the PayPal Mass Pay system, and a wide variety of merchant account providers such as 2CheckOut and PaySystems is QuickPayPro.
It really is an amazingly simple, yet effective piece of software. It is server-side, which means you don’t have to actually go downloading a load of software, opening it up, modifying it so it’ll work on your website, then uploading it to your hosting account, which can be time-consuming and, depending on the scripts involved, can require quite a bit of technical know-how (the first time I installed one of these scripts I was reliably informed how easy it was to install, but it took me, a total newbie, a day and a half of frustration, irritation and annoyance before I had it installed and working correctly).
QuickPayPro, is server-side. This means, you sign up to their very reasonably-priced service, and they provide you with a user-name and password to their site. You type these in, enter a few basic details about your website and products, and you’re home and dry. No programming necessary.
But QuickPayPro isn’t just tempting because it’s just *so* easy to set up your affiliate software, it also has quite an impressive range of advanced features that you don’t often see in products priced this competitively, which can really help take your business forward.
One feature I thought could really boost your profits is that QuickPayProQuickPayPro has the ability to offer special commissions for individual affiliates. Therefore, you could be offering, say, a 25% commission to all your "standard" affiliates, but you also have the ability to have a "top 10" affiliate chart. Whoever are your top 10 affiliates over the course of a month can be given a 35% commission for example as a reward. With the higher commission level, you really are noticing and rewarding your top performing affiliates, but it also acts as an extra bonus that will spur on your other, less successful affiliates, to try and reach this "upper limit".
Furthermore, imagine if you’re trying to attract a few super affiliates to *really* make your sales grow rapidly. If you could offer them a special 50% commission if they’re willing to promote your website, don’t you think they’d be more inclined to consider your offer?
This software also allows you to run a 2-tier affiliate program, so your affiliates can go out and recruit other affiliates for your site, and earn a small commission when these affiliates they themselves introduced make a sale. So your affiliate force grows much, much faster.
QuickPayProQuickPayPro allows you to do this by solving the "2 months till you get paid" scenario that we discussed earlier. When it comes to the end of the month and pay-day, the software will instantly upload details of how much every affiliate is owed to your Paypal account. From there you can use Paypals "Mass-Pay" function to pay all your affiliates on the same day. Even overseas affiliates can get their commission on the first of the month like those affiliates in your country of origin.
Don’t underestimate how powerful this can be for attracting affiliates and keeping them happy. Would you rather wait 2 months or 2 days for the money you worked hard to earn?!
We have fully reviewed QuickPayPro elsewhere on this site and you can visit the article here.
So what is the best method for your affiliate program?
It’s a difficult question as each method has it’s strengths and weaknesses. Up till now it may be that it appears that the third method described is the best by far.
However, consider the fact that as I have said it is necessary for affiliates without a Paypal account to sign up for one before you can pay them. There have been cases of difficulties in setting up a Paypal account, and also stories of Paypal "freezing" accounts for reasons best known to itself. Lastly, Paypal won’t accept residents of certain countries due to perceived fraud problems. This may, therefore, cut down on the number of affiliates that are able and willing to sign up to your program if this is your only payment method.
My personal suggestion would therefore to be to make Paypal an *option*, maybe your "suggested" or "preferred" option but also set up a $US bank account at your local bank and be willing to send out checks to those who would prefer them.
Then you’ve got all bases covered.