How to run an affiliate program for your startup

Pay partners a commission per customer they refer, with clear terms and disclosure.

Impact
High
Effort
Low
Filed under
Referral, Acquisition
Updated

An affiliate program pays other people a commission when someone they refer becomes your customer. You only pay when a sale happens, so it suits a startup with a product that has a clear price and a few creators, bloggers or customers who already talk about the problem. To run an affiliate program well, you set clear commission terms, track referrals with software, and check what partners say about you.

How to do it

  1. Decide what counts as a sale. Pick one event: a paid plan, a first payment that clears, or a trial that converts. Shopify, for example, pays only when a referred merchant is on a full-priced paid plan, and tracks free-trial referrals for up to 400 days after the click.
  2. Choose a commission shape. A one-time bounty is simple. A percentage of each payment ties your cost to revenue. HubSpot offers 30% recurring commission for up to one year with a 180-day cookie window. Shopify pays up to $150 per qualified referral, with amounts that vary by location and a 30-day cookie.
  3. Pick the software. Rewardful is an affiliate and referral platform built around Stripe. FirstPromoter targets subscription businesses and works with Stripe, Paddle, Recurly, Chargebee and Braintree. Check which billing system you already use before choosing.
  4. Write the rules in plain language. Cover the cookie length, payout day, minimum payout, refund handling, and what is not allowed, such as bidding on your brand name in paid search or posting fake reviews.
  5. Recruit by hand first. Start with customers, newsletter writers and people who already compare tools in your category. Give each a link and a sample of what they can say.
  6. Require disclosure and check it. Review a partner's first post or video before you pay.
  7. Pay on time and ask partners what is blocking them. Slow payouts kill programs quickly.

What it looks like in practice

Say you run a $29 per month invoicing tool built on Stripe. You write a one-page program: 30% of every payment for 12 months, a 60-day cookie, payouts on the 15th, no brand-name ads. You email your 40 best customers and three newsletter writers who cover freelancing, each with a link. After a month you look at which links produced paid customers, not clicks, and decide whether the percentage and cookie window need changing. This is a walkthrough of one possible setup, not a result.

When it backfires

  • Undisclosed affiliate links. The FTC says "affiliate link" alone may not tell readers the poster is paid, and that "paid link" next to the link should be adequate. It also says delegating promotion to an outside company does not relieve you of responsibility under the FTC Act. Require disclosure in your terms and check partners' content.
  • Low-quality referrals. Pay on paid conversions after your refund window, not on signups, or partners will chase volume.
  • Coupon sites and brand bidders. Without rules, partners can take credit for customers who were already buying. Write the exclusions into the program terms.
  • Two-tier programs add complexity. A two-tier program pays affiliates an extra commission on conversions from affiliates they recruit. Start with one tier and add this later if you need it.
  • Margin. A 30% recurring commission is a real cost. Work out what you keep per customer before you promise it.

Customers can also refer others through milestone referral rewards, which suits product-led referral more than outside creators.

Questions people ask

What are good affiliate programs for startups? Look at how established SaaS programs structure theirs, like HubSpot's 30% recurring for up to a year, then size yours to your own margins.

What commission structures are common? A flat bounty per qualified referral (Shopify) and a recurring percentage for a limited time (HubSpot) are two real examples.

What is a two-tier affiliate program? It lets affiliates earn an extra commission on the conversions of new affiliates they refer.

Sources

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