When you monetize your website, it is key to diversify and have multiple streams of income. One of my favorite resources on diversifying is a podcast from Food Blogger Pro where Bjork describes the egg carton method. To paraphase this idea – think of your website as an empty egg carton and each empty space is a different income stream. Affiliate marketing is a great source of income that many websites use to fill a space in their egg carton.
As an affiliate, you will promote someone else's products or services for a commission. Sometimes this is a flat fee and others use a percentage of the sale. Many people start with the Amazon affiliate program, but with recent changes to their terms (and decrease in commissions), people are searching for other programs that align with their content.
Most affiliate programs will have affiliate terms and conditions that govern the program. As always, the terms are chock full o' legalese.
In this post, we'll review some of the most common aspects of affiliate program terms and conditions so you know what to look for as you sign up for new affiliate programs.
Understanding the Terms and Conditions for Affiliate Programs
Often, when you join an affiliate program, you will submit an application. There, you'll usually check a box that states you agree to the terms and conditions. Of course, they will vary from program to program, but there is often overlap in the type of clauses you'll see.
The affiliate obligations describe what you, as an affiliate will be obligated to as an affiliate for the company. The obligations may vary by program, but they will often state that you may not be an active affiliate if you post certain types of content on your site (think of negative types of content like violence, promotion of illegal activities, etc.)
Additionally, the company may state that you are obligated to make changes to the site, as it relates to your promotion of their products and services, if they make a request for a change.
The programs will almost always ask you to abide by all applicable laws, including intellectual property. They may also include a requirement to follow FTC guidelines regarding disclosures.
Remember: when you are reading this section, it is what you are agreeing to as your obligations when you become an affiliate for the company.
Company's Rights and Obligations
In this section, the Company will reserve certain rights and outline any obligations. Similar to the section on the affiliate's obligations, it may state that the company has certain obligations.
Frequently, this section will have a reservation of rights. These are rights that the company is explicitly stating that they will have, such as the right to ask you to make changes or the right to terminate the agreement if they learn of any fraudulent behavior by the affiliate.
The termination section describes how the parties can end the relationship. This is an important provision because it should indicate if any notice is required to terminate the agreement and if there needs to be a reason. Often, either party can terminate the agreement at any time, without cause.
The company may also state that they will not be responsible for paying for any pending commissions if they have to terminate because of fraudulent or prohibited activities.
Typically, the terms will outline how an affiliate will qualify for commissions. The most important thing for the affiliate to know from this section is how the company will track commissions. This can be done a number of ways:
- Assignment of a customized link that is used to add a cookie to the browser when a potential purchaser clicks on the affiliate's link
- Company provides a field where the purchaser lists who referred them for the sale
- Confirmation of the affiliate who referred the sale during a sales call handled by someone on the company's team
In the event that the company tracks through cookies, this section may also list how long the cookie will last on the browser.
It's important to review this section carefully since this will directly impact your earnings. Make sure you know how your referred sales will be tracked so you can maximize your earnings.
The payment section typically outlines the amount you will be paid for the commissions (such as flat fee or percentage of sale). Some companies modify their commissions, so the location for this may vary. It might be stored in your affiliate dashboard rather than in the terms and it could vary for different types of sales.
Additionally, this section will usually dictate how and when you will be paid. Many companies find that they receive considerable questions on when payments will be made on affiliate referrals. One common payment time frame is to pay by the end of the month after the sale. For example, if you referred a sale in January, you'll receive payment by the end of February.
When you are reviewing the terms, make sure it is clear when and how you will be paid.
Modification to Terms
Most companies will reserve the right to modify their terms and conditions. Some will give a notice period and others will not. Usually, the company will notify its affiliates of substantive changes via email.
Be sure you periodically check to ensure whether or not there have been any changes.
Most affiliate programs will have some type of promotion restrictions in place. Pay careful attention to this section because they may place limitations on how you can promote your affiliate links. Common examples of promotions that may be restricted in some way are:
- Pay-per-click (PPC) advertising campaigns;
- Email (explicitly stating that spam is not allowed); and,
- Software that could manipulate tracking to increase your commissions.
Grant of Licenses
As an affiliate, you will be marketing the products or services of the company. Since you are helping them with sales, they will likely give you tools to be successful. This may include creative assets or the ability to use their intellectual property (such as trademarks) in your marketing.
To do this, the company will grant you a license to use their content. Typically, it will only last for the duration of your participation in the affiliate program.
When reviewing the terms, be sure that you know what you have access to and how you are permitted to use it. This is often especially important when it comes to logos or the brand's images.
Affiliate Representations and Warranties
Some companies may require you to make representations and warranties, which are statements that are true at the time you agree to the terms and conditions. Please review these carefully.
The terms and conditions may include a provision regarding confidentiality which states that certain information must be kept confidential. Be sure to review this provision and keep any applicable information in confidence.
The Legal Stuff
Like all terms and conditions, there will be some general legal provisions in the terms. These are some of the most common:
- Company's disclaimer of warranties
- Limitations on liability for certain types of damages
- You will agree to indemnify or hold harmless the company against claims from third parties in certain circumstances
- Independent contractor status
- Jursidiction – which state's law applies
- Survival of terms if a portion of the agreement is deemed unenforceable
- Rules regarding assigning rights
- Prohibition on affiliate modifying rights without written approval from company
We wish you great success in your new affiliate relationships! And, if you need Affiliate Terms and Conditions for an Affiliate Program that you host, check out our template.