Looking to expand your business reach and drive sales? An affiliate agreement may be just what you need. Partnering with influencers can be a great way to increase your reach and brand exposure—but both parties need a strong contract that protects their interests.
Gordon Law has helped affiliate marketers, brands, and affiliate networks craft strong agreements for more than 10 years. In this article, we’ll cover the basics of an affiliate agreement, common payment structures, and what should be included.
What Is an Affiliate Agreement?
An affiliate agreement is a contract between two parties, where the affiliate promotes the company’s products or services in exchange for a commission or other forms of compensation.
Affiliate marketing contracts are important legal documents that define the relationship between an affiliate marketer and the brand they’re promoting.
There may be two parts to the agreement: An affiliate marketing Master Service Agreement (MSA) details the standard terms and conditions for a company to work with an affiliate marketer. The Statement of Work (SOW) contains more specific terms related to a campaign or project.
It is essential to carefully review and understand the terms of the agreement before signing to ensure that you are comfortable with the requirements and expectations.
Our team of affiliate marketing lawyers is capable of developing a personalized Master Service Agreement (the blueprint for all your contracts) and negotiating specific affiliate marketing agreements tailored to your needs.
With our help, you can confidently navigate the complex world of contracts and ensure that your best interests are protected. Let our contract lawyers help guide you through the process and take the stress out of securing a contract that’s tailored to your needs.
What are the Benefits of an Affiliate Agreement?
There are several benefits to having an affiliate agreement for businesses. These are some key advantages:
- Increased sales
- Expanded reach
- Cost-effective marketing
- Boosted credibility
- Flexibility
Who Needs An Affiliate Agreement?
An affiliate agreement is typically necessary for businesses that engage in affiliate marketing, which involves partnering with affiliates who promote their products or services in exchange for a commission on sales.
Companies looking to boost their business and increase profits can benefit from an affiliate agreement. Here are a few examples:
- Ecommerce businesses that sell products or services online
- Software companies that offer digital products or courses
- Subscription-based services, such as meal delivery or streaming platforms
- Influencer marketing agencies that work with social media influencers
- Online marketplaces that connect buyers and sellers
Additionally, affiliate marketers who promote products or services for companies may also want an agreement to protect their interests and ensure that they receive compensation for their effort.
What Should Be Included in an Affiliate Agreement?
Affiliate agreements should be clear, concise, and comprehensive, outlining all of the key terms and conditions of the partnership to ensure that both parties understand their obligations and responsibilities.
While you can find free affiliate agreement templates online for creating agreements, we highly recommend seeking the assistance of an experienced affiliate contract lawyer.
This will help ensure that your agreement is legally sound and covers all necessary details.
What are Sub-Affiliate Agreements?
Sub-affiliate agreements allow an influencer to outsource some of their work to others and split the payment.
The sub-affiliate typically promotes the product or service through its website, blog, or social media channels, using a unique affiliate link provided by the primary affiliate. Any sales generated through the sub-affiliate link will result in a commission being paid to both the sub-affiliate and the primary affiliate, according to the terms outlined in the sub-affiliate agreement.
For example, let’s say ACME Inc signs an affiliate marketing agreement with Affiliate A.
- Affiliate A receives a 15% commission on sales made through their affiliate link.
- Affiliate A hires Affiliate B to help promote their affiliate link through SEO, social media, or other marketing channels.
- Affiliate A and Affiliate B split the 15% commission; Affiliate A keeps 10%, while Affiliate B gets 5%.
Sub-affiliate agreements may include details such as commission rates, payment terms, restrictions on advertising methods, and termination clauses.
They can benefit both parties, as they allow the primary affiliate to expand its reach and increase sales while providing the sub-affiliate with an opportunity to earn money without having to source new clients.
Which Affiliate Payment Structure Should I Use?
The affiliate payment structure refers to the way in which an affiliate is compensated for its promotional activities.
This can vary depending on the agreement between the parties, but it typically involves a commission-based model where the affiliate earns a percentage of the sale price of a product or service they help sell.
Here are some common affiliate payment structures in more detail:
- Pay-per-sale (PPS): Affiliates are paid a percentage of each sale they generate for the company. This is the most common payment structure in affiliate marketing.
- Pay-per-click (PPC): Affiliates are paid for each click on their affiliate link, regardless of whether a sale is made. PPC is less common than PPS but may be used for companies with high website traffic or low-profit margins.
- Pay-per-lead (PPL): Affiliates are paid for each lead they generate, such as when a customer fills out a form or signs up for a free trial. PPL is often used in industries where lead generation is important, such as finance or real estate.
- Revenue share: Affiliates are paid a percentage of the total revenue generated by the customers they refer. This may be a one-time commission or recurring commission for ongoing purchases or subscriptions.
The specific payment structure used will depend on the goals and preferences of the company and the affiliate.
It’s important to choose a payment structure that aligns with the company’s business model and profit margins while being attractive to potential affiliates.
What is the Role of an Affiliate Agreement Lawyer?
An affiliate agreement lawyer can play an important role in developing and negotiating an affiliate agreement.
They can help to ensure that the agreement is legally sound, protects the interests of both parties, and complies with relevant laws and regulations.
Some of the specific roles of an affiliate agreement lawyer include:
- Drafting affiliate agreements
- Reviewing existing agreements
- Regulatory compliance
- Dispute resolution
An affiliate agreement lawyer can provide essential legal support and guidance to clients engaged in affiliate marketing to ensure compliance, mitigate risks, and protect their interests.
Affiliate Marketing Lawyers You Can Trust!
At Gordon Law, we are committed to offering our clients thorough and exceptional service.
Our team of experienced affiliate marketing lawyers can assist you in taking your business to the next level by guiding you in the right direction.
Don’t hesitate to contact us today and get started on the path to success!
