Why Can’t I Just Run my Affiliate Program on Auto-pilot?


Many who start an affiliate program for the goal of growing their customer base or expanding their revenue channels have an assumption that: “once they set up the program, shouldn’t It be able to operate on it’s own?”

While you CAN do this, many in the affiliate marketing industry would strongly advise against it. Why? Below, I discuss the many oversights to running your affiliate program on auto-pilot.

No Crowd control.

UpFoundry_Autopilot proggram

Imagine you own a popular night club. You have hundreds waiting to get into your establishment each night- the line is practically out the door. Now say you decide to have your nightclub run on auto-pilot. You remove the staff, and ditch the security guards out front. What do you think will happen?

When you run your program on auto-pilot you fail to filter out:

  • affiliates who join your program that might not be a good fit for your brand and target market.
  • affiliates who engage in fraudulent behavior to win commissions.
  • affiliates who don’t read your affiliate terms and decide to use marketing channels that you clearly state not to use (PPC, Social, etc.).

No Activity Monitoring

Continuing with the bar example I mentioned above, now let’s zero in on people buying drinks at their own discretion. Since you have no staff, you require all customers to take a drink and deposit cash in the register – without any staff watching. What will you think will happen?

With affiliates, it can be quite the same. While you could argue – “well, we check before we pay them, that the sale they made was¬†legitimate. Isn’t that enough?”¬†

Unfortunately, No. If you awarded a golf player $100 for each time he made a hole in one, but you were not allowed or covered your eyes when he/she hit the ball – would that be enough information to pay them the $100 when you see the ball in the hole?¬†I don’t think so.¬†

When you run your program on auto-pilot you miss:

  • What content/banners/links affiliates are promoting and how they are promoting.
  • Where your affiliates are promoting to bring you sales.

No growth and relationship building.

It’s the classic notion in business: Doing the same things or nothing at all, and expecting better results.¬†When you run your program on auto-pilot you are aiming for the lowest common denominator: How can I get the most activity and sales, without the work?

When you run your program on auto-pilot you miss out on:

  • Building long-lasting relationships with affiliates that could truly propel your brand.
  • Understanding what successful¬†affiliates are doing that brings you sales.
  • Proactively finding new affiliates that could be strong advocates for your products or services.

Do you currently have an affiliate program that is on auto-pilot? What issues are you facing? I’d love to know either by email or the comments below.

Affiliate Commission Rates & Structure 101

In this article, I will walk you through all the different factors and considerations for setting a commission rate for your affiliates. Read from to top to bottom as it is important you follow the process in order.

So you have come to the point where you need to draft out how you are going to compensate your affiliates for referring customers your way. You have looked at your competitor’s affiliate programs and asked advice from others but your stuck with no clear path on what you should do.

My plan with this article is after you read you will be left with enough guidelines that creating your commission structure for your program will be a lot more approachable.


Before you start: Fundamentals.

I highly advise that as you put together your commission structure you keep an important factor in mind: Cost.  Mainly, these two questions:

  • Margins: What are the margins on my products or services?
  • ¬†Budget: What is the budget I have set aside to pay affiliates?

Why are these important? Without knowing reasonable margins – how can you truly see how much you can afford to commission an affiliate per product or service? ¬†As for your budget: Your affiliate program shouldn’t be an after thought; it should have a line item on the accounting spreadsheet.

The LAST thing you want to have happen is see major success with your affiliates and then not be able to pay them.

Working with affiliates is all about trust so losing it by not coming through on your promise can be very detrimental. If you have to bug your CEO/CFO or fight your accounting department to work out a budget for the affiliate channel Рby all means do so. It will save you trouble later on.

What you want out of your commission structure: 

Now that you have a strong understanding of your cost – let’s look at what you really want out of your commission structure. Your commission structure should be:

  • Simple: Affiliates signing up for your program need to be able to decipher how much money they can make — I would say, within 5 seconds of landing on your affiliate signup page.
  • Competitive:¬†it’s important to stay competitive with other affiliate program’s in your industry but¬†not¬†at the risk of your costs. which leads me to my next point…
  • Above Costs:¬†It goes without saying: your commission should always be within your margins and above costs of your product or services you are selling.

Before I get into range or exactly how much your commission should be within you margins – let’s get a more general understanding of the different commission types there are…

Different Commission Types:

You can choose to compensate affiliates on whatever action you’d like them to take. What I mean by this is: Buying your product or service, filling out a form, receiving a phone call are just some actions. To get a jist, here is the most common lingo for basis of commission types (below). I am sure as you have seen looking around on the web, you might come across this abbreviations:

  • CPA (Cost per Action) – This is most commonly compensation to an affiliate for referring a paying customer.
  • CPL (Cost Per Lead) – This can be compensation to an affiliate for someone he sends filling out a contact or online form.
  • CPM (Cost per Impression) – Compensation for a banner “view” or loaded page or ad an affiliate gets someone to do.
  • CPC or PPC (Cost Per Click or Pay Per Click) – compensation for an affiliate who gets someone to click on a link/image/etc.
  • Pay Per Call ¬†– Just as it sounds:)

So what is the best most effective? It really comes down to your business, however a Cost Per Action is most common as it compensates the affiliate for actual money to product exchanging hands.

Various Commission Structure models:

Now that we have a primer on the various commission types – let’s see how companies/merchants/advertisers set their commission rates based on their products and services…

commission identifier:

  • Percentage of sale:¬†A percentage of the price of whatever the customer who he/she referred bought. Example: 25% commission on a product that a referred customer paid $10 for. $2 would go to the affiliate.
  • Flat Fee:¬†Just as it sounds.¬†Example: $25 commission on each product or service a customer buys that you refer.¬†


  • One-time: Commission is paid out one-time per referred customer.
  • Reoccurring: Commission is paid out on a weekly/monthly/annual basis to the affiliate (usually based on the lifetime of that account that he/she refers).


  • Product or Service based: ¬†If you have a wide range of products or services that range in price, you might denote different commission structures for each.¬†Tip:¬†Keeping with the “Simple” suggestion earlier, do it by product category vs. individual commissions for every product; you will be less confused and so will your affiliates.¬†
  • Unit Based:¬†Some companies/merchants/advertisers will have increasing commission rates for affiliates based on how many referrals they make each month.¬†For Example: 1-5 referral sales: $50 flat rate on each referral. 6-10 $75 flat rate on each referral (and so on…).

So what combination of these factors is the best? It really depends on your business but what I have seen the most of is: One-time, percentage or flat rate based.

So really: Is that it?

Most people get to this point and just want a simple answer:¬†What % of my margin should my commission rate be? or¬†Just tell me what is the best commission structure…and while I can give you some general guidelines – it’s a classic case of analyzing risk. Some companies might offer more commission because they keep customer’s longer (think of insurance- the switching and hassle is high for policy holders to switch so they stay longer – thus, the average payment value for that customer is high) while other’s offer quite low commissions because their margins are leaner. It really is up to you to know your business!

Did I cover everything? 

While I covered the nuts and bolts there is still several aspects you might be wondering about such as: How to change your current commission structure without pissing off affiliates or other methods that are involved in commissions/payments (pending periods, minimum commission balances, etc.).


How to recover an old, dormant affiliate program

Just the other day, I was hearing something all too familiar …

Yeah, we have an affiliate program – have had one for years.¬†The problem is: it’s such a low part of our sales. We set it up 4.5 years ago and it never really took off. I guess it just doesn’t work for our business.

You would be surprised at how many of new clients come to me with a similar response – nearly 80%.

While there are a lot of industries and business structures whereas their business model doesn’t really allow for a good fit to use an affiliate program, many SaaS based businesses that cater to small to medium sized businesses ¬†– can create an extremely powerful affiliate program…even if it’s been dormant for years.

Here is some good steps to take to assess your dormant program and provide a foundation for getting it back on it’s feet.

1)  Pull the Data.

Hopefully, you have an affiliate program that you can, at the very least, see: How many sales were referred, by what affiliate, and when. By tallying up who is your top affiliates, you can pinpoint who to reach out to gather feedback like, “What are some struggles you face with promoting our product or service through the affiliate program?”¬†If you have the referring URL’s (the URL links of the affiliate’s pages for which a prospective customer first clicked to come over to your website), you can analyze and see how your product/service is being marketed.

If you don’t have any top performing affiliates (meaning your affiliate program is pretty stagnant) the¬†next best area to focus in on is:¬†Your customers.¬†Survey your customer’s on how they found your product/service and what they like most about it. (This later can be used to pitch new affiliates on the top attributes to keep in mind when marketing to their audiences about your products).

2) Force a moment of clarity: what is working and what is not?

Are your commissions competitive? Are you really dedicating enough time to not only proactively recruiting affiliates but also policing current activity for compliance and fraud? Are you on the right platform to track affiliate sales, collect tax forms,pay affiliates Рand does that platform work For your affiliates?

If this is a lot to process at one time: I am with you; scaling and managing an affiliate program can be complex. I find the easiest assessment is finding the most obvious pain point your program might be struggling with, tackling it, and moving to the next.

3) Reach out for advice.

Sometimes the best course of action is to find an affiliate program, perhaps not in your direct competitive space but similar size and target, reach out to their affiliate manager or CEO and see how they solved similar problems or arrived at comparable solution. Or you can reach out to me and the UpFoundry for advice: through a call or email. Happy to help.

Thanks for reading.


All about Affiliate Tracking Platforms: Self-hosted vs. SaaS vs. Network

A Network is the way to go – I hear they have all the affiliates and handle EVERYTHING.”

You Should use Hosted Software (SaaS) as it gives you more control.”

If you are at the stage of looking around for the best technology platform – chances are you might have run into other people mentioning the above in reviews, forums, or by general recommendation. I too remember a time when researching the BEST platform for one of the first programs I managed and just felt lost at all the mixed advice.


Know what? You are in good company…many if not all business owners or CMO’s I work with ask me what they think is the best platform that trumps others and the truth is…

There is no one-size-fits all platform
to run an affiliate program on.

The truth hurts sometimes but don’t be discouraged. It’s best to learn the attributes of each type of platform so you can make an educated decision based on what works best for your company.

Below, I discuss the various options:¬†Networks, SaaS providers, and Self-Hosted Solutions and the pro’s and cons of each.

Affiliate Networks

An affiliate network is a “middle man/woman” between Advertisers (You & and Your Company who has offers) and Publishers (affiliates) who promote these offers. They provide a platform to equally handle Advertiser and Publisher Needs.

Why would you go with a network?

TL;DR: For convenience.
  • They handle final payments, Tax implications (collecting W9’s or other required forms from affiliates), and any issues with payments between Advertiser & Publisher.
  • They have a lot of affiliates registered which for an affiliate is some times an advantage; They use one platform to manage all their relationships with Advertisers (i.e. your company and other affiliate programs they are a part of. ).

Why would you NOT want to go with a Network? 

  • They are expensive:¬†¬†Not only are you paying commissions to affiliates but you are paying a percentage (%) to the network¬†for each sale. On top of that, many networks have extraneous¬†fees like access to their Network (Network fees) and other small “gotchas” for how your affiliate program is found by affiliates in their system
  • Communication:¬†You don’t have access to contacting affiliates directly; you have to work through their platform which often makes it hard to connect with valuable prospects.
  • While the network makes final payments, it’s still up to you to: make sure there is enough funds in the account to pay affiliates, ensure that you are not paying affiliates for orders that are fraud or no longer active. If you don’t have the resources to a) have someone pull this each month or b) using a technical solution (like API integration) to check orders referred by your affiliates.
  • Lower control:¬†you have to work with limitations of the functionality and reporting of these networks.

SaaS (Software as a Service):

The Software as a Service option is provided by a third-party company: They host the platform/application and then you pay a monthly fee (as the Merchant) to utilize their application.

The Pro’s of using Software as a Service option?

TL;DR: For less dependence on Technical know-how.
  • Work 1-on-1 Affiliates:¬†You have direct access to working with the affiliates that are in your program. You can collect the information from affiliates when they sign up
  • Technology Reliance:¬†Your company is not on the hook for uptime of your affiliate platform or any tracking issues.¬†
  • Feature rich:¬†Most providers offer significant amount of features- reports, advanced affiliate tools, and other options that can really boos your program.
  • Support:¬†Many if not most of the SaaS providers offer some level of support to you (the Advertiser) and some of them offer some limited support to your affiliates.

Why you wouldn’t want to use a Software as a Service solution?

  • Can be Costly:¬†Many SaaS providers charged based on your affiliate clicks, impressions and/or how many payments you issue to your affiliates each month. If one of your affiliates pumps up their traffic (despite if it is legitimate) or has a spike in sales – it can cost you $$$.
  • Ability to Migrate:¬†If you ever decide to move away from a SaaS platform it often can be hard as many providers don’t have good export tools or just plain don’t allow them.

Self-Hosted Platforms

A self-hosted platform is exactly what it sounds – you download software, and then upload and run it on your own server.

Why would you go with a self-hosted solution?

TL;DR: For the budget-friendly and the ability for full control and customization.
  • Lower Costs:¬†Since Self-Hosted Solution are typically one-time, fixed costs to buy the software license, it makes it easy on the wallet.
  • Complete Access:¬†Since you run the software on your servers, you have full control of all the data, tracking, as well as the ability to tie in any other technology you use within your organization (Google Analytics or other tracking platforms).
  • Program Customization:¬†You can setup your affiliate program guidelines how you want them completely up to you. If you’d like to control how affiliates sign up for your program, send them emails a certain way, collect data a certain way – all is a possible with a self-hosted solution.

Why would you reconsider a self-hosted solution?

  • ¬†Technical Infrastructure required:¬†It’s very important to have your affiliate program up and running all the time so you can track all sales when they happen. ¬†If you don’t have the technical team or infrastructure to support it – it can be quite tough.¬†
  • Maintenance:¬†You will need to upgrade the software whenever there is a new version. If you don’t, there could be serious security concerns.


As you can see, there are a lot of points to consider when picking the right platform and remember: no matter what platform you choose you still need to be responsible for recruiting affiliates, optimizing their performance, as well as reviewing activity for compliance and potential fraud.


3 Questions to Ask Before Considering an Affiliate Program.

I’ll admit, the first affiliate program I ever launched and grew was not my idea. It came from a customer/affiliate that suggested we (the company I worked for at the time) start one.

Did I have any knowledge on how affiliate programs worked? A little.

Would I say I knew enough to start one from scratch? Not so much.

And when I did some searching around online about the right time to start an affiliate program nothing rang through.  Would it work? Is it the right time? I had questions that no one really touched on.

Luckily through starting and managing several affiliate programs, I boiled down some central questions that helped clients before they started their affiliate programs.


Do my current customer’s talk about my product?

This might sound like a strange question and you might be wondering why it has anything to do with starting an affiliate program.  I tend to boil down products and services into two categories:

High WOM Products/Services Low WOM Products/Services

These are products or services that have distinctive qualities or experiences that causes others to share via word-of-mouth


These are products or services that could be useful, but are less talked about via standard word-of-mouth.


While your company might¬†think¬†everyone wants to talk about dryer sheets, ¬†it’s just a product that very little people talk about and therefore an affiliate program might not be your best bet. On the other hand, a software company like Buffer, might solve a core issue that many people have and might talk about: scheduling and posting information to their social media accounts.


What incentive is there for my affiliates to promote?

We often think of affiliate programs under one generic model: They refer a customer your way, and then you pay them for that customer. Affiliate programs under this model is known as a CPA model (Cost-per-acquisition).

But affiliate programs can be more dynamic than that: You can pay affiliates for qualified leads, phone calls, or specific actions within your application.

So how do you come up with an appropriate model?

  • Boil down what is at the crux of your business – is it new accounts? new leads? etc.
  • Ask your customers. Create a survey to see what options they might find attractive and what matters most to them in terms of incentive (money, credit, prizes, etc.).

And lastly…

What are my resources to get an affiliate program started?

Affiliate programs take a lot of work to get started and even more work to manage correctly. It is very important that you have a clear mindset on the various aspects, mainly: money, time, and expertise that goes into it.

Is your commission rate right so that it doesn’t eat into your margins?

Do you or your staff have the time to manage the program?

Is there anyone qualified on the team that could manage the program alone?

These are all very important questions to consider and ones that The Up Foundry can help you answer if your considering a new affiliate program


What has you hung up on starting an affiliate program? Is there any questions you have toiled with or anything that has prevented you from making the jump? I’d love to hear from you in the comments section.