Affiliate program management is the most important and most misunderstood aspect of running a successful affiliate program. Even though management is a critical part of business, many internet marketers never take the time to learn what it is they need to know and do. Unfortunately, this can mean a loss of sales and paying too much in taxes.

The Very Least You Need to Know
If you learn nothing else about affiliate marketing management, then you need to know the very basic tax laws. The United States requires every working individual to file taxes to the IRS.

Internet marketers are no exception. They are required to file taxes on all income earned. Additionally, if they pay independent contractors (affiliates and associates), then they are required to send the independent contractors documents on wages paid. This will be true for any independent contractor that earned more than $600.

W9 & 1099: Required IRS Documents
To meet this requirement, internet marketers need to require all contractors, affiliates, and associates to fill out a W9 before receiving payment. This will give the marketer all the information needed in case the contractor earns more than $600 in a given year.

If any contractor does make more than $600, the marketer is required to send out a 1099. The 1099 is a document that goes both to the IRS and the affiliate as wages earned.

Without these documents, the internet marketer will be held liable for all income earned and will not be able to deduct payments made to independent contractors, associates or affiliates. This could cost the marketer thousands of dollars in tax deductions.

Tracking Sales to Increase Profit
After learning the ins and outs of the required tax documents, all marketers should learn the importance of tracking affiliates. While many people will track website hits, conversion ratios, and keywords, many fail to track the affiliates. Tracking affiliates is helpful in three ways.

Increase Traffic – At the very least, affiliates should increase traffic to the website. Tracking how each affiliate program is doing is vital to duplicating your efforts.
Increase Sales – With more traffic coming to the site, you can expect an increase in sales. If the increase in sales is not matching the increase in traffic, then you need to determine where the error lies. Is it a misunderstanding with the affiliates? Are the affiliates making false promises? Or is a particular affiliate making misleading statements? Whatever the cause, you need to figure out why your conversion rate decreased.
Increase in SEO – With each affiliate, your inbound links should increase. Additionally, your SEO and page ranking should increase. If you take a sudden hit in the rankings, you will need to figure what went wrong.

Affiliate program management requires an attention to detail and an ability to keep accurate and current records. If you cannot do this yourself, then you can either get software to help you or outsource to a professional company. Either way, you must keep accurate records.

Would you like have a service for your online business that tracks all W9 and 1099 information for your tax records on files?  Try this free service for online business owners that requires payees to fill out a tax profile.  Visit https://paypeopleonline.com/ to keep your business away from tax nightmares and raising flags with the IRS.

Tagged with: about • Affiliate • know • Management • Need • Program

Filed under: Affiliate Program Management

Like this post? Subscribe to my RSS feed and get loads more!