Are you a writer, artist or freelancer that’s currently selling services? Are you thinking about running an affiliate program to boost sales and leads? If so, this article was made for you. In it, I discuss the various options available to freelancers for setting up affiliate programs to pay salespeople a commission on sales.
Are You Offering Dynamic or Fixed Prices?
This is the single most important question. Are you planning on offering fixed or dynamic prices?
In other words, will you charge the same flat fee over and over again for pre-listed services? (ie 500 Word Press Releases for $79, Minisites for $169, etc.) Or will your prices be dynamic? If prices are dynamic, you’ll need a way to “build” your product links on-the-fly with the affiliate ID embedded.
The only solution I’m aware of that can accomplish this is InfusionSoft. In the InfusionSoft CRM, affiliate ID’s are stored inside your lead’s contact details. This allows you to “collect sales” from the backend and credit your affiliates accordingly. However, InfusionSoft requires you to manually disperse the mass payments to affiliates. You’ll also need to collect 1099’s at year end for any affiliate that earned more than $600 in the calendar year. That’s a real headache for a small-scale freelancer.
If prices are fixed, then you can use something like Rapid Action Profits or DigiResults to sell your services (without the 1099 headaches). With these solutions, commissions are paid instantly via Paypal to your affiliate’s Paypal accounts. The only drawback is that the affiliate’s info will be visible to the buyer. As a designer, that can raise confusion when they reply to the payment email with transactional concerns.
One-Time or Lifetime Commissions
Here’s the next big question. Do you want to pay affiliates for repeat future sales? Or only one time for the lead?
InfusionSoft can handle lifetime commissions since affiliate details are stored with the customer. Rapid Action Profits will store a 365 day cookie on your customer’s PC to ensure future sales are credited accordingly. Unfortunately, as of this date, I’m uncertain about DigiResults or Payspree’s cookie duration.
Do You Want 1099 Headaches?
Here’s something important to consider. As a vendor, if you pay affiliates directly, you’ll be responsible for collecting 1099’s on any affiliate that earns more than $600 per calendar year. If you don’t want to bother with this additional accounting headache, then use Clickbank** or a Paypal instant commission payment system like Rapid Action Profits or DigiResults.
What’s the Easiest and Fastest?
Payspree and Digiresults will get you up and running the fastest. This is a great way to “test the waters” with no up-front money or investment. If you’re strapped for cash, use either of these solutions.
RapidActionProfits will require a script purchase and probably some help from John (aka GlobalPro) to install if you’re not a techie. But it’s really extendable and puts everything under your control.
Final important disclaimers:
I’m not a lawyer or CPA. You should consult with one about 1099’s and tax implications.
Buyer beware. Do your research!
**Clickbank isn’t recommended for services because they are extremely liberal with their refund policy and some buyers will purchase your services with their own affiliate link. This makes Clickbank a risky choice. Customers get a no-questions asked refund…you lose hours of work. However, I still include it as an option since they handle refunds and 1099s for you.
Good luck selling those services!
To Your Success,
1 thought on “How To Setup An Affiliate Program for Services”
Thanks for recommending DigiResults, we really appreciate it 🙂
In answer to your question, we drop lifetime cookies, not just 1 year cookies like RAP.