The Test Your Affiliate Contract Must Pass Before You Sign It
I’m fairly certain that in the creative world, nearly every creative entrepreneur is a member of some sort of affiliate program, which I think can be such a great opportunity for both the business and the affiliate. Participating in affiliate programs has been a great opportunity for my business, and I credit much of the Creative Law Shop’s launch success to our brand-new affiliate program. That being said, affiliate programs done wrong can just be an unnecessary invitation of liability for your business, and an alarming number of affiliate contracts that come across my desk contain terms that I tell my clients to watch out for.
So what exactly do I look for before I tell my clients to sign up for an affiliate program? There are 4 main points to note.
As a note- if your affiliate invitation doesn’t contain a contract at all, run away!
Money. If you’re willing to associate yourself and your business with another business, you absolutely must be clear on what you’re getting in return! You need to know what you’re getting paid, when you’re getting paid, and how you’re getting paid, and you need to be really clear with the company about whether or not there’s any sort of threshold that has to be met before you get your first payout. A lot of programs will stipulate that you have to hit a certain monetary figure before you get paid at all; but some don’t, of course. Make sure, even if it’s not an actual requirement, it’s specifically stated that it’s not a requirement and that you’ll start getting your kickbacks right off the bat.
Sales requirement. The second thing I would want you to look for is any language that specifies how many sales you have to make. We’re all busy, especially this time of year. An affiliate program can become a burden if you have any sort of requirement on how many sales need to be made.
Frequency of publication. Hand in hand with that is our third point: any language talking about how often you actually have to broadcast or publicize for the affiliation. And of course, publicizing that you’re an affiliate of the program, or talking about the product or that company, isn’t that big of a deal but it’s just one more thing that you don’t want added to your plate that could become an added stress later on.
Intellectual Property. Many programs will send you elements of your intellectual property to use in advertising. That being said, stay aware of exactly how the company is telling you that you can use their intellectual property because that’s what it is – intellectual property. You don’t want to accidentally overstep those boundaries and get yourself into trouble by using them improperly.
And last but not least, a bonus point: make sure you comply with the FTC as an affiliate. So that leads to the obvious question – what does it take to stay compliant with the FTC? The answer is actually much more simple than you would think, and considering it is a federal entity, the FTC has actually done a really great job at laying out exactly what’s required of the affiliate programs on their website.
So that being said, the FTC is very clear about what you can and cannot do as a member of an affiliate program. It all boils down to three words: clear and conspicuous. You have to be very clear and very conspicuous that you are a member of an affiliate program, which is always judged from the perspective of the potential consumer. Any time the FTC is looking into anyone for an affiliate program, they are automatically going to look through the lens of the consumer, and are going to determine if:
the consumer knew that that person was an affiliate
the affiliate made it abundantly clear that they were an affiliate
the affiliate used clear language stating that they were a member of an affiliate program
If you are starting an affiliate program for your business, check out The Affiliate Agreement in The Shop to get started.
