Affiliate Program

What is an Affiliate Program?

An affiliate program pays outside people a commission for every sale they send you. Affiliates are creators, bloggers, consultants, newsletter writers and partner businesses who recommend your product to their audience with a tracked link or code. You pay only when a sale happens, which makes it one of the few marketing channels with no upfront cost.

It differs from a referral program in who sells and how they are paid. Referral rewards your own customers, mostly with product credit. Affiliates are professionals who recommend products for money, so they compare your offer with every other program they could join. Your commission, your sales page and your payout reliability all compete for their attention.

When should you use it?

Use it when:

• You have a clear margin: digital products, software subscriptions, courses, templates, premium physical goods with healthy markups.
• People already buy from your sales page without you on a call. Affiliates send traffic; your page has to close it.
• Creators or consultants in your niche already recommend tools to their audience.

Skip it when:

• Your margin is thin (low-priced physical goods, marketplaces taking big cuts). A 20% commission on a 15% margin loses money on every sale.
• You sell through long sales calls. Affiliates can’t control what happens on your call, and attribution gets messy. Use partner introductions with a finder’s fee instead.
• You haven’t sold 20 copies yourself. No affiliate can sell what you can’t.

How do you do it, step by step?

1. Work out the commission your margin can carry. Take what a customer brings in during their first year, subtract delivery costs, and decide what share you’d happily pay to win that customer. Our rule of thumb: for digital products and software, 20% to 40% of the first payment or first year is the range creators take seriously. Check the math with unit economics: CAC (customer acquisition cost) through affiliates must stay below LTV (lifetime value, the profit a customer brings over their whole time with you).

2. Pick the simplest tracking. On Gumroad, affiliates are a built-in feature: you add affiliates, set their commission and Gumroad tracks their sales. For a software product on Stripe, start with one promotion code per affiliate (SOFIA15) that also gives the buyer a small discount, and log sales in Google Sheets. Dedicated affiliate tools (Rewardful, FirstPromoter, PartnerStack and others) are paid, so add one once you have 15 or more active affiliates.

3. Write one page of terms. Cover: commission rate and whether it repeats on renewals, how long a click counts (30 days is a fair default), payout date and method, minimum payout, and when commissions are cancelled (refunds, chargebacks). Set the payout date after your refund window: with a 14-day refund promise, pay commissions 30 days after the sale. Also list banned tactics: bidding on your brand name in search ads, coupon sites, spam, fake reviews, buying through their own link.

4. Require disclosure. The FTC’s Endorsement Guides FAQ says affiliates should disclose their relationship clearly, with wording like “I get commissions for purchases made through links in this post.” It also advises advertisers to instruct their network on disclosure and check what they say. Put this in your terms and give affiliates a ready-made sentence.

5. Recruit 10 affiliates by hand. Look for people who already create content about your customer’s problem: YouTubers with tutorials, newsletter writers, Instagram creators, consultants who advise your buyers. A 2,000-follower creator whose audience matches beats a 200,000-follower generalist. Message them personally:

   Hi Lina, your sourdough series is how half my customers found baking. I sell a course on opening a home bakery (€79), and I’d love to offer you 30% on every sale through your link, paid monthly. I can send you free access first so you only recommend it if you like it.

6. Give affiliates everything they need. A one-page brief: who the product is for, three customer results, a short demo video, sample posts, your logo and their personal link or code. The easier the post, the faster it goes live.

7. Pay on time, every time. Pay on the date in your terms, with a note listing their sales. Late payment is the fastest way to lose good affiliates, who talk to each other.

8. Review monthly and prune. Check sales per affiliate, refund rates and where traffic comes from. Thank the top performers with a higher rate. Remove anyone with suspicious patterns.

What does a worked example look like?

Say Sofia sells a €79 online course with templates for opening a licensed home bakery. Her cost per sale is almost zero, and buyers rarely buy anything else, so she can afford 30% (€23.70) per sale.

She sets up affiliates on Gumroad, writes one page of terms (30-day refund window, payouts on the 15th for sales older than 30 days, no brand-name ads), and messages 25 baking creators with 2,000 to 40,000 followers. Fourteen reply, 9 accept free access, and 6 post within a month.

After 8 weeks: 61 sales through affiliates, 4 refunds, €1,350 paid in commissions. Two creators bring 70% of the sales, both with smaller but highly focused audiences of home bakers. Sofia raises their rate to 35% and starts looking for more creators like them.

Which free tools help?

What mistakes should you avoid?

• Paying before refunds clear. Pay commission on a sale that gets refunded and you lose twice. Pay after the refund window.
• No ban on brand-name ads. An affiliate bidding on your brand name takes commission on customers who were already searching for you.
• Recruiting by follower count. Audience match matters far more than size. Check comments to see who actually listens.
• Vague terms. “Recurring commission” without an end date becomes a dispute in year two. Write the length down.
• Ignoring fraud signals. Watch for many sales from one card, sales right after a click with no browsing, sudden spikes from unknown sites, and refunds right after payout.

How do you know it worked?

Our rule of thumb after 6 to 8 weeks: at least 3 of your first 10 affiliates make a sale, affiliate sales reach 10% or more of your total, and refund rates from affiliate sales match your normal rate.

Go: a few affiliates sell steadily and your cost per customer stays inside your margin. No-go: affiliates post but nothing sells. Then check your sales page with fresh eyes or run a payment link test on the offer itself, since the problem sits there.

What should you do next?

Find more creators through micro-influencer outreach, and for partners with an audience who don’t want commission, try cross-promotion. Keep an eye on commission against unit economics every month. If you want to practise the whole path from offer to first sales with feedback, the F/MS startup game walks you through it with an AI co-founder.

FAQ

What commission should a startup offer affiliates?

For digital products and software, our rule of thumb is 20% to 40% of the first payment or first year. Physical products need lower rates because margins are thinner. Pick a number you’d still be happy with if every single sale came through an affiliate.

What is the difference between an affiliate program and a referral program?

A referral program rewards your existing customers for inviting friends, mostly with product credit. An affiliate program pays outside partners in cash for sales from their audience. Many startups start with referral and add affiliates once they know their margins.

Do affiliates have to disclose that they earn a commission?

In the US, the FTC’s Endorsement Guides say affiliates should clearly disclose the relationship, and other countries have similar advertising rules. Require disclosure in your terms and give affiliates a sentence they can paste.

Updated 26 October 2026 · Written by the Fe/male Switch team

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