Affiliate Agreement: Definition & Template

Getting the facts on an affiliate agreement before jumping into this potential business is necessary. This is because it can help you protect your rights and your commission after affiliate campaigns. Find out its definition, easy-to-use template, and benefits in the article that Dynu In Media gives you below. So, let’s dive in and learn all about this important document!

What Is An Affiliate Agreement?

To kick off, we find out the definition of an affiliate agreement. In simple terms, an affiliate agreement is a contract between two or more parties who will work together to generate sales, conversions, or other transactions. An affiliate and an affiliate network work together to generate business. An affiliate network grants its affiliates access to its clientele while the affiliate generates interest among potential buyers.

Most affiliate agreements are made between unrelated businesses with no say in the operations of the other. By this definition, a customer who wants to share links to my online clothing store on social media would not qualify as an affiliate, even if he bought the clothes from me using the Shopify platform. We don’t have an affiliate agreement because I don’t pay him for referrals.

What Should Be Included In An Affiliate Agreement?

The next thing we want to give is affiliate agreement components. Okay, an affiliate agreement includes these main elements: 

• Pay-Per-Action: Pay-per-action (PPA) is a model of compensation popularized by affiliate marketing that has since spread to the advertising industry. PPA means that you only pay your affiliate if they bring in money to you. A referral source’s payment depends on the number of leads or sales they bring in, so you won’t have to fork over any cash just because they sent some people your way.
• Pay-Per-Click: Most affiliates use this model, which is the most common affiliate payment structure. When a user interacts with an ad, the advertiser forks over money to the affiliate network. Depending on the type of advertising campaign, you can expect to pay anywhere from $0.50 to $2 per click. Cost-per-click (CPC) and cost-per-acquisition (CPA) models predominate in PPC campaigns.
• Two-Tier Affiliate: There are two tiers in a two-tier affiliate program, and they are the first level and the second level. Referring new customers to a merchant’s website earns first-level affiliates a commission. When customers referred by second-level affiliates make a purchase immediately or later after creating an account on the merchant’s site, the second-level affiliate receives a commission.
• Pay-Per-Impression: Affiliate marketers often choose this as their preferred payment option. Here, you receive payment whenever your ads appear on a website. Your website’s advertising value and the volume of visitors will determine your per-impression earnings.

What Are The Benefits of An Affiliate Agreement?

Of course, an affiliate agreement brings affiliates many massive benefits, so they use it as the main insurance for their rights. Here are some advantages of this agreement you should not miss to ensure to be faired in the business relationship with your partner:

• advertisement is free, and payment is made only for success.
• marketing to a large number of people in order to raise awareness of a product and boost the reputation of the associated brand.
• straightforward advertising approach to targeted people.

Affiliate Agreement Sample

We’ve provided an easy-to-use affiliate agreement template. Feel free to grab a copy for your usage below:

Source: LegalTemplates

Why Use An Affiliate Agreement?

No one uses an affiliate agreement if it does nothing for them, right? Let’s check out some reasons that convince you should use an affiliate agreement:

• Payment terms: The timing and method of payment to the affiliate can be outlined in this agreement. The affiliate’s commission or a flat rate per sale, as well as the payment method, may be outlined in the agreement.
• Rights and responsibilities: The agreement will spell out in detail the respective roles of each party and their respective obligations and commitments.
• Customizable: The contract terms can be altered to accommodate the interests of both parties. For instance, the contract can be modified by considering factors like the promoted products and services and the affiliate’s compensation plan.

After understanding an affiliate agreement, if you want to get into this field, let’s read this article again to ensure you get all the points. This document outlines all the rights and responsibilities of both parties involved; therefore, it helps you protect your achievement and what you deserve to receive when completing one campaign. Furthermore, remember to download and use the template we’ve included above. Finally, Dynu In Media wishes you success!