Cash Management and Affiliate Payout Systems

Now that you are beginning to sell your own products, it is time to start inviting affiliates, or those really close-ally affiliates known as JV Partners, to promote on your behalf, for a  commission. This is the opposite of course of when you were promoting other people's products and getting a commission yourself.

There are three basic ways to pay affiliates, they are all tricky for different reasons.

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1. Direct pay
Direct pay, is a system that allows the buyer to pay your affiliate directly. It works primarily when using Paypal. The payments alternate depending on the commission, for instance, a 50% direct-pay plan would alternate payments 1 to you, then 1 to the affiliate, then 1 to you and one to the affiliate again.

The advantage of this type of system  is that you never have any of the affiliate's money in your hands, so you are not responsible to have to pay him or her later.

The disadvantage is it gets extremely confusing for the buyer since they may buy from you but pay to someone else. It can be difficult to track refunds.

2. Future pay (Mass pay)
When you collect all the money yourself and then pay affiliates later, as you would do when signing up to Paydotcom.com as an example, the burden is on your to make sure your affiliates get paid. The advantage of this is that you can take care of all refunds yourself, and then pay your affiliates after refunds are processed. The disadvantage is that your affiliates have to wait to be paid, and you have to remember to pay them. There are also income tax considerations with this method.

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3. 3rd Party Pay
The most notable 3rd party system is of course Clickbank. In this case, your affiliates have to wait to get paid, but they know they can trust Clickbank to make those payments. Clickbank holds the money for both parties for several weeks or more, and handles all refunds. The advantages of this are obvious, the disadvantage is the waiting period.

There are several payment processor and affiliate payment systems you can purchase for yourself if you arentí using Paydotcom.com or Clickbank.com including Rapid Action Profits, Surefire Profit System, and JV Manager.