Affiliate programs are extremely useful for any e-commerce venture and should always be considered.  They not only offer you sales potential, but may give you a lot of exposure as well.   Considering that they are always based on pay for performance, they take very little overhead, and if well planned, very minimal time to manage.  Please note that managing an affiliate program is key to its success.   If you do not support your affiliate and help him make money off your site, he will abandon you in favor of greener pastures. 

It is important to have enough resources to manage your affiliate program.  Let demand drive supply so don't hire someone to be a full time affiliate coordinator unless you do have enough resources for that.  On the other hand, as you promote and nurture your program, make sure that you are giving it enough time and resources, and make sure that you increase such resources as your affiliate base grows.  Affiliates are in essence unpaid sales people so make sure that they are getting compensated by helping them perform. 

Look at your marketing mix, if it is incoherent, your offerings  will not make sense to your customers or to your affiliates' website visitors.  There are two factors that are critical to your affiliate: Your business, and his returns. 

Your Business

Your affiliate wants to offer his website visitors a business that is useful to them.  The more attractive your website and your products are, the easier it is for your affiliate to "sell" you to his customers.   An affiliate to IBM or Microsoft will find it a lot easier to send his visitors to patron such businesses than would an affiliate to a small T-shirt business in Albuquerque, New Mexico.  The least you can do to make your small business more attractive to your affiliate's website visitors, is to have a clean site, easy to navigate, and easy to place an order. (more on this in our design tutorial).  The first interaction between your business and your affiliates' website visitors is your advertisement (banner or text).   Invest time and money to make sure that the ad is a proper representative to your business and portrays you in an appropriate image.

Your Affiliate's Returns

You affiliate is also interested in his returns for sending you traffic.  Not only should the commission be adequate, but you need to make sure that your affiliate is rewarded for sending you "good customers" that come back.   While most programs do not reward affiliates for repeat purchases, consider a bonus system that will account for that.  The more money the affiliate makes, the more resources he will allocate for your business.