running your own affiliate program?

[dank]

This forum isn't reserved for just FutureQuest reselling/affiliate topics, correct? That's what I recall being said, but the forum description doesn't specifically spell it out... Anyway, if I'm wrong, feel free to move it over to Open Discussions or E-Commerce or something.

I know FQ recently went to their own in-house affiliate program after experimenting with Commission Junction for a while. I also know affiliate topics have sprung up from time to time and it hasn't looked terribly promising as far accurate tracking and billing is concerned. However, I'm desparately in need of some new promotional tactic and am thinking setting up an affiliate program for my products might be worth trying. Word of mouth alone isn't getting it done...

I would be using the osCommerce Affiliates add-in. I just installed the admin side of it and confirmed that it at least installs bug-free. Haven't tried incorporating the catalog side of things yet, so I can only guess at how well that will work. (I don't want to add it to a live installation until I'm sure I'll use it. Might be wise setting up a secondary test installation for that purpose...)

Before putting too much time and effort into this, I've got two major questions that hopefully people who have gone this route can help answer:

1) Tax implications. Do you need to take into account the locale of the affiliate when it comes to payments? I hope not, because that could become a billing nightmare.

2) How to automate/streamline billing? The osCommerce add-in has options for check, PayPal, and Bank (presumably transfer) payment methods. I can't really think of any ways to automate those, other than maybe with some 3rd party software set up for that purpose. Any suggestions?

I'm sure there will be other questions, but that's a start. :)

Dan

[Brian]

Hello Dan,

You would in fact be responsible for filing paperwork for those that do fall under certain taxing requirements. I would advise you speak with an accountant for more specific advise. You might also do a search on google for “affiliate program tax forms”

In regards to automating payments, you might find your volume is manageable if you implement payment thresholds. These allow you to reduce the overhead of sending small checks under a determined limit.

Hope that helps :)

-Brian

[dank]

Thanks for the tax info. Looks like more research is definitely necessary before proceeding.

The payment threshold I figured is a given. I suppose I won't know until I get there if that alone is enough to make things manageable... Of course, for it to become unmanageable would probably mean a successful enough affiliate program that I'd be able to afford other billing solutions.

Dan

[dank]

Just got the following reply from my accountant (didn't expect her to be working at 8pm), which may be useful to others, as well:

Good thing to check on things like that. Are you talking about direct payments that might be made to individuals or companies as kind of a commission? If so, then you don't have too much to worry about, except that if you pay an individual over $600 in one calendar year, you will need to send a Form 1099 to that individual and the IRS showing the total amount of payments. It would be a good idea to get personal information up front such as social security number and address before you send out any money.

Form 1099 is required to be filed by January 31 for the preceding tax year and you can have prospective recipients fill out a Form W-9 for all the necessary information you'll need.
If I have someone account for $600 in affiliate commissions in one year, I won't just be sending them 1099's, I'll be sending them gift baskets. :)
Dan