Here is how it works. A vendor or business owner sets up a form on the shopping cart of the web site where you can sign up to become an affiliate. From the information on the form, a unique affiliate link for you is generated that allows you to send people to the page. In turn, when you promote that person’s business, and send traffic to their site, the link logs the fact that you were the one who sent them there. This means that if a person buys something immediately or even in the future,¹⁰⁹ you get credit for the sale. You then make a commission that is preset by the vendor—from 5 percent up to 95 percent, depending on the industry. Digital products like e-books or online courses can offer a higher affiliate percentage because they have no cost of delivery or hard cost of goods.

The transparency issue here is that most of the time an affiliate link is masked. This means that you can’t tell that the person who gave you the link is making a percentage of the potential sale. So should you? The FTC says that you have to disclose on a blog if a link you display is an affiliate link. So it opens up the question—do you need to reveal this?

If you are using affiliates to promote your products or services are you going to insist that they disclose that relationship upfront as well? One of the hesitations from business owners to use affiliates is the potential lack of promotional control. Whatever your affiliates say and do is a reflection of your company and many companies choose not to do it at all. I like using affiliates. Where else can you hire an unpaid sales force that only makes money when you do?