Generating income online is my number one source of passive income. And within that income stream, affiliate earnings are my largest income source.
Affiliate earnings result from selling products and services that I do not own, but maintain a relationship with the owner of the offering who pays me a percentage of each sale I generate on their behalf. Many companies maintain their own in-house affiliate programs, while others join networks such as Commission Junction.
If your online business model relies heavily on affiliate earnings, you will want to read this post in its entirety.
Most of us blindly trust companies, big and small when it comes to joining affiliate programs and promoting their products and services in terms of receiving the correct amount of payment we are due. We do this because because we don’t know how to track affiliate earnings, or don’t want to because it takes time and effort.
Many of us simply give the vendor the benefit of the doubt. The rationale goes something like this: “if they have an affiliate program, they must have the sophisticated systems in place to track and remit commissions accurately and timely”.
If you are nodding your head to that, stop nodding because I just found out that one of my sources of affiliate earnings did not pay me over $3,000 in affiliate commissions over a 3 month span.
These results are preliminary and my VA is currently working through the past 18 months to determine whether a larger issue exists here. What’s worse is that this company is a well known company, certainly not one that I’d expect to encounter hiccups in its affiliate earning tracking, accounting and distribution process.
I first realized there may be something going on a couple months back when my payment was significantly delayed. Each month, my VA sends me a spreadsheet detailing all my online earnings broken down by website and earning source. When I received the spreadsheet last month, I noticed a familiar number was missing.
When I looked into it further, I realized that I wasn’t being paid timely the last several months. I dug further and found several discrepancies in what my analytics were showing as sales conversions compared to what this company’s affiliate reports were showing as earned affiliate earnings. Very strange. I never would have thought. The company is currently looking into my account in detail to determine what exactly happened, how and why.
Tracking affiliate income can be a difficult task if we attempt to do it manually. In order to track conversions on our end as internet entrepreneurs, we need some sort of script or code that the company we are promoting puts on their sales confirmation page.
We then input the same script or code in our analytics software so that our systems can “talk” to theirs. Even a free solution like Google Analytics enables you to track sales conversions if you can provide a mechanism by which the analytics system can identify whether a sale has been made.
While smaller companies may not have the sophistication in the systems to manage large volumes of affiliate activity, I’ve realized that even big shops are no different in this case. You can find a discrepancy in your affiliate earnings just as likely with a big name as you are with a smaller business.
So what’s the moral of the story? Be careful. Similar to how retail organizations factor in a shrink percentage (due to product breakage, theft, etc) in their income projections, you can also factor in a loss percentage in your income projection and accept the fact that glitches will happen (especially undetected ones as you grow larger), or make a commitment to be on top of it periodically by engaging in spot checks and monthly reconciliations. This can be a big commitment.
How? You can do it yourself, which will take valuable time away from building your business, or you can hire a virtual assistant to help you with the chore. I have done the latter. But even if you engage a VA to help you out with reconciling affiliate earnings, you will have to work with the vendor you are promoting to obtain and set up sales conversion scripts in your analytics tool.
The issue you will likely run into is that not all vendors are willing to provide such script. Many simply don’t have the time or the willingness to create one for you. Others are even worse in that they won’t even take a script that you have developed and simply paste it on their product sale confirmation page. I have run into this quite a bit. If you have any suggestions for me, I am all ears?
If you are doing business online, affiliate relationships are something you are likely already in, or will be either as an affiliate or as a vendor that manages an affiliate program. Affiliate relationships are a critical part of online business. As we have seen however, the accounting and payment remittance aspect of it can be a bit dicey.
What’s my advice for what its worth? If your online business model solely reliant on affiliate earnings, start thinking about how you can diversify. Affiliate commissions, although a lucrative income stream, should not be your only income stream.
Has this happened to you? If not, are you concerned at all? Why or why not? How do we get comfortable that we are getting paid what we have earned?
Business Idea: For all the programmers out there, how about a software that tracks affiliate earnings and makes the accounting easier for internet business owners? Is there already such a tool out there?Previous: 10 Easy Tips For Cutting Household Bills & Expedite Wealth Building
As for me, there is no such type of software that I’ve seen anywhere, maybe you could hire someone to create that and sell it.
As per affiliate, I’d rather go with a company that has good history rather than go for one with good payout but no/bad history.
that’s exactly we all try to do Sheyi – but man I tell ya, you just never know. tech is very dynamic, so much so that no individual or organization can keep up with even a small percentage of it
The best thing is to play smart either by learning how to track your commisions yourself or by hiring a VA as you adviced. But the fact remains that you can no longer trust anyone now be it a company with good history, large payout etc because often times in life, the people you know becomes the people you knew although mistakes do occur sometimes but it all depends on how diligently we avoid those mistakes because $3,000 is not a small change to play with. Please if anyone finally discovers a script that can solve this please don’t hesitate to share.
Thanks Sunil for this revelation though haven’t registard with any affiliate network for now but this post will help me to be more careful when I’m ready.
Keep it up, lets succeed together
as the common sentiment has been so far, stick with larger, reputable names as much as you can. thanks Theodore
While reading your post I was thinking exactly what you suggest at the end. I bet that a lot of affiliate marketers would pay good money for a piece of software that can help track earnings. One can go crazy checking everywhere how many clicks you got, how much money you earn, etc.
Let us know what the company says after investigating.
yup! I know I would. our space is only growing so it might be a pretty lucrative project. the company resolved the research in my favor. however, it has left a skeptical taste in my mouth you know?
Hey Sunil, I’ve noticed on more than one occassion that an affiliate I’ve worked with has had a bug and my transactions went to zero for a week or so (it’s easy to notice when it’s all or none). Not so easy to miss a couple lost transactions though.
What I do in those cases where it is noticeable is to take the average transactions over the past month, divide by 30, and ask for a bonus according to the daily rate to cover the downtime. Since most affiliate managers do want to see you succeed (since they make money off you), I’ve never gotten any pushback from this approach. In fact, I’ve often gotten more than I’ve asked for and a big apology.
As far as tracking every single lead, you’re right, that can be difficult if they do not provide you a script or allow you to do something like add a pixel to their thank you page.
I am glad that approach works for you Geoff. for me, multiple affiliates on multiple platforms across multiple sites becomes a bit tough to manage. I just focus on some of the larger relationships and always factor in a loss percentage similar to retailers do for inventory shrink
what brilliant advice!!!! Never thought of puting in a loss percentage in my income projection to cover glitches etc i must admit im really lazy about doing spot checks etc maybe i could as you advised, employ a virtual assistant….cheers mate, youve got me thinking!
that’s good to hear…keep those wheels turning. let me know if you think of a better approach Diego
I always wondered about this matter and had no idea how to track the earnings. Very enlightening. I wouldn’t know where to begin to install code to track responses. Very informative article.
oh trust me Barb, I too am at a loss. hopefully someone takes that business idea seriously enough to develop a solution
Thanks for sharing your experience as an affiliate. This could be useful since I am planning to promote a few affiliate products on my blog beginning this month.
I also appreciate you dropping by my site Sunil.
Good luck with your projects.
thanks Philos and all the best. let me know if I can help in any way
My question is this…how do you know that your own affiliate tracking is accurate? As you have mentioned, with scripts and technology there are always going to be glitches. A large company’s tracking software could miss sales, but at the same time if you track things yourself, who’s to say that your own tracking software doesn’t also have glitches and inaccuracies. Seems almost impossible to me to really know for sure if you’re getting credit for everything unless you manually handle every transaction which of course is impossible as an affiliate.
sure Derek, there is always that risk whenever relying on anything outside your own manual intervention. but think about it, when you have an independent script running, at least you will have some way to reconcile with the results your vendor is showing you. we can only hope that overtime tracking systems become more glitch proof and accurate.
I’m a much smaller operation, but I continuously get notes from people who tell me they’ve used me links for such and such, but I don’t seem to always get the requisite credit. Something clearly isn’t adding up…
I learned a lot from this post.It takes me almost half an hour to read the whole post and to understand. Definitely this one is the informative and useful post to me.
Thanks for the share.
welcome to the blog Adi. glad you liked it
I like it ….