# Operating an Affiliate Program

Load this for recruiting and managing commission-based partners, rather than a customer refer-a-friend loop. Keep tracking and tool selection in `affiliate-programs.md`; creator sponsorship and audience/content vetting belong to influencer-marketing. Recruit suitable partners through prospecting, then use this playbook for economics, activation, terms, and reconciliation.

## 1. Check Economics Before Offering a Rate

Use collected eligible revenue and the business's actual variable costs, refund/churn history, partner support, tooling, recruitment, and payout fees. Define whether taxes, discounts, refunds, renewals, upgrades, and existing customers belong in the commission base. A headline percentage without its base and duration is not a program offer.

```text
cohort contribution = collected eligible revenue after refunds
                    - product/service variable costs
                    - affiliate commissions
                    - partner support and program operations
                    - payout fees
```

Illustrative cohort, not an industry benchmark: $12,000 collected minus $2,000 refunds leaves $10,000 eligible revenue. At 20%, commission is $2,000. With $3,000 variable costs, $800 partner support, $1,200 program operations, and $100 payout fees, contribution is $2,900. State the period and avoid counting support in both variable costs and operations. Deferred or clawed-back commissions need their own ledger entries, not a second subtraction of the same refund.

For recurring programs, model actual retention and commission duration by cohort. For lead/demo bounties, define an accepted action and duplicates, cancellations, and qualification criteria before quoting a rate. Compare with the same acquisition/payback period used for other channels; attributed revenue alone does not prove incremental revenue.

## 2. Recruit for an Audience and Activation Plan

Build a small prospect shortlist with audience/ICP evidence, relevant content, acquisition channel, and a realistic first placement. Distinguish editorial publishers, consultants/agencies, complementary products, creators, and coupon partners: they may introduce demand or intercept an existing purchase differently.

Use a funnel with denominators: qualified candidates → contacted → accepted → activated → first accepted conversion → retained productive partner. Count distinct partners: several placements can belong to one partner. An accepted application or generated link is not an activated partner. Define activation as a real, approved placement or campaign, and follow up with useful enablement rather than more generic recruitment messages.

Prepare an offer with audience fit, commission base/rate/duration, eligibility, allowed channels, payment timing, support contact, and the proposed first activity. Draft outreach without claiming familiarity with work you have not reviewed. Apply existing user authorization before sending.

## 3. Make the Rules Executable

Return a terms decision table for review, not invented legal boilerplate:

| Decision | Specify |
|---|---|
| Attribution | Link/code priority, window, repeat purchases, cross-device gaps, and competing partners |
| Eligible conversion | New/existing customer treatment, accepted lead/order, refunds and cancellations |
| Channel policy | Brand bidding, coupon publishing, email outreach, paid ads, self-referrals, and sub-affiliates |
| Commission | Base, rate, duration, tier transitions, currency and rounding |
| Payout | Hold period, threshold, schedule, verification, disputes and chargeback handling |
| Changes/exit | Effective date, treatment of accrued commissions, notice and dispute contact |

Use the user's agreed policy and the platform's capabilities; do not promise a tracking rule the tool cannot implement. Legitimate coupon partners are not automatically fraud. Shared IPs or devices can be a signal for review, not proof of abuse. Apply rules consistently and retain the evidence for decisions.

For US-facing endorsements, consult the [FTC's current affiliate disclosure guidance](https://www.ftc.gov/business-guidance/resources/ftcs-endorsement-guides-what-people-are-asking). Partners should explain the material connection clearly near the recommendation/link, rather than relying on a hidden terms page or an ambiguous label. Example draft: “I earn a commission if you buy through this link.” Match the actual relationship and language; do not fabricate personal use or authorize unsupported product claims. Other markets and channels need their applicable guidance.

## 4. Activate, Reconcile, and Support

Give the partner a tested link/code, truthful positioning, approved assets, disclosure guidance, a first-placement plan, and a support contact. Test the customer journey and attribution with authorized test data before inviting a broad cohort.

Reconcile the underlying eligible conversion to pending, approved/due, paid, refunded/adjusted, or disputed commission using the platform's actual states. Preserve stable order/customer/partner identifiers and effective policy version. Replayed webhooks and exports must not count a conversion or payment twice.

Choose the hold period from actual refund/cancellation exposure and agreed terms. Verify whether the tool only calculates commissions or also sends payouts; marking a commission paid is not necessarily a money transfer. For example, Rewardful documents its [commission payment workflow](https://help.rewardful.com/en/articles/2773351-how-do-i-pay-commissions) and [refund handling](https://www.rewardful.com/automated-refund-handling). Those capabilities do not establish every other platform's behavior.

Review a partner cohort regularly: inactive partners may need an asset or clearer audience fit; productive ones may need better landing pages or support. Handle a disputed sale with the actual attribution record, policy and refund state. Do not silently retroactively change earned commissions to make a report look better.

## 5. Measure Growth Separately from Attribution

Report active placements, accepted conversions, collected eligible revenue, refund/churn by cohort, commissions pending/due/paid, total program cost, and contribution. Keep new customers separate from existing-customer upgrades and late coupon touches. Trace acquisition quality through retention instead of optimizing raw affiliate clicks.

Where feasible, compare a bounded partner rollout or holdout with an equivalent untreated cohort. Label observational comparisons and attribution limitations honestly. Cookie/code attribution assigns credit; it cannot establish what would have happened without the affiliate.

### Deliverable

Return a cohort economics worksheet with explicit assumptions, partner shortlist and activation funnel, reviewed terms decisions, enablement checklist, reconciliation sample, and a small launch plan. Define success/stop criteria from the business's measured margins and coverage. Keep recruitment, policy edits, and payouts within the user's authorized scope.