Chapter 8. Step Five—Creating Your Affiliate Agreement

Chapter Summary

Unlike a simple advertising contract that merchants sign when placing ads, the binding agreement between you and your affiliates is much more complicated. It should be written in everyday language and detail the legal and monetary responsibilities that you have to your affiliates and those your affiliates have to you.

Unfortunately, most affiliate agreements miss important points, including what, how, and when the affiliate is paid; how their performance is tracked and reported; issues of copyright and trademark protection; and any marketing and promotion assistance you plan to offer the affiliate. Because of the popularity of affiliate programs, many in the industry are trying to make them more credible and professional. To this end, you should consider participating in the Affiliate Union, which is organized by affiliates hoping to establish minimum acceptable standards for merchant agreements and to devise a certification program for merchants.

One of the most important elements of your affiliate program—and one often overlooked—is the affiliate agreement. Although agreements exist for every credible affiliate program, many of them miss covering important points. Affiliates are quite aware of the benefits of your program. After all, those benefits are portrayed in your marketing materials and promoted on your Web site. But they also know that it’s the affiliate agreement that reflects the elements of your program that both you and the affiliate agree upon.

What’s an Affiliate Agreement?

An affiliate agreement is the terms between a merchant and an affiliate that govern the relationship.


Thought must be put into such things as revenue percentages, tracking and reporting procedures, payment schedules, and the boilerplate issues of copyright and trademark protection. The agreement must also cover any marketing and promotion assistance you plan to offer the affiliate, any exclusivity clauses (such as the right of rejection for unsuitable sites) or non-compete clauses, and how and where your banner and text links will be placed on the affiliate’s site.

Remember that the agreement has the final say as to how your relationship with your affiliates will operate. So, a lot of thought has to be put into drafting your agreement so that it not only reflects your program and how it operates but also creates a long-term and mutually beneficial relationship between you and your affiliate partners.

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