Avoid Affiliate Marketing Pitfalls

knowing what affiliate marketing pitfalls exist will arm you against the problems that can hurt your business!

While being an Affiliate can be very lucrative, providing many with the opportunity to work for themselves with little risk, there are still precautions to consider. I know of many affiliates who have made much money off the products of others due to their good marketing skills and hard work. However, that doesn't mean that everyone will have the same experience.

Affiliate marketing sounds easy but knowing a few important facts can keep your business from decline and even ruin.  This is why it's important to learn as much about affiliate marketing as you can before you begin.  I know the excitement of beginning a new business venture,  I enjoy creating income streams and each one is a new adventure for me, but I have learned over time to find about as much as I can about something before I begin.  Here are some important points to know before you begin as an affiliate.

Affiliate Marketing Pitfall No. 1

• Read your affiliate agreement carefully!

Many times a new affiliate or anyone new to having their own business will miss key things in their agreement. It should be noted that whenever you sign up for an affiliate marketing program, you will be expected to sign an agreement. You've probably been told never to sign anything unless you read the contract first! Well that old adage applies to becoming an affiliate online as well.

So no matter whether you're signing an agreement for a product with a local company or for an online affiliate, the the terms and conditions of the agreement for both sides should be outlined. However, if a company is going to hide hidden regulations, they will do it in a specific place on the contract. It will either be in the small print, or they will baffle you with legal language. Either way, you need to read and understand your agreement thoroughly to avoid disappointment and lost earnings.

However it's been my experience that if you deal with companies online that already have a good reputation, they do not try to trick anyone. All they want is to offer a legitimate business where they can make money as well as their business partners or affiliates.

Affiliate Marketing Pitfall No. 2

• Signing with a company that has a bad reputation

Once you sign a contract it's too late to back out! So it's important to know as much about a company before signing with them. Here's where the Internet can become a valuable tool to help you before signing any contracts. When people have been burned by a company they are happy to give bad reviews about it. So check online first before aligning yourself with a company that has a bad reputation.  Google the business name of the affiliate program you're interested in to see if they have multiple complaints and read what they are about. 

Affiliate Marketing Pitfalls No. 3

• Understand how a company defines the term "revenue"

If you are signing up for a commission based affiliate marketing program then you need to understand how the term revenue is defined. This is one of the biggest pitfalls of the contracts. They may advertise 5-10% commissions but they actually depend upon their definition of revenue.

Most affiliate marketing programs will calculate commission on the gross value of the sale. In other words, the amount of money the site will get at the completion of the sale. You may think that this sounds great. However, you need to read this part of the agreement very carefully. The amount of the sale almost always excludes credit card or debit card payment surcharges. They also are likely to exclude payment and delivery charges as well as any gift wrapping or other surcharges. What can sound like a nice commission can become very small.

However there is nothing you can do about the size of your commission other than to have a realistic idea of what type of commission you'll be getting so that you will know if this will be a venture that is worth your time.  So with a company that sells a physical product, such as a juicer for instance, ask how they figure their revenue so that you will have a better understanding of your commission.  

Also, please note that some affiliate programs are even stricter in their definition of revenue. Your commission may be based on the profit margin of the sold product. For example, if you help sell a juicer for 100 dollars but the company only makes 60 dollars profit, you'll receive a percentage of 60 dollars and not the 100. This can make a substantial difference in your earnings that you need to know about.  Put this question on your list that you will want to have addressed before signing a contract.  This is one of the affiliate marketing pitfalls that can be a great disappointment.

Affiliate Marketing Pitfalls Tip No. 4

• Understand a potential affiliate's return policy

Be aware that your commission will be delayed for a sufficient time to insure that there were not any returns for the products you received a commission for.  Normally the affiliate company will pay 45 to 60 days after a sale to give time for any returns.  This way you will not receive an affiliate check and then owe money for any returns.  A good affiliate company will normally pay out according to their return policy.  Wile you cannot expect a company to pay you a commission on an item that is returned, make sure you understand their return policy. Find out your rights in this situation.
 

Affiliate Marketing Pitfall No. 5

• Bad Customer Service

Make sure that the company you become an affiliate with has good customer service.  Check out a company first before you join their program.   Again, Google the company for any complaints about their customer service policies.  If the company doesn't respond well to their customer's complaints, this may discredit your reputation because your are representing them.  Years ago I checked an affiliate for their customer service policy and they looked great.  I aligned one of my websites with them, then later I found complaints.  So check very carefully before joining any affiliate program because you want to give yourself the best opportunity for success and having a good reputation is vital!


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