What is in-house affiliate program software?

In-house affiliate program software is the tool an ecommerce store uses to run its own affiliate program, with no affiliate network in the middle. It tracks the sales each affiliate refers, calculates their commission, gives affiliates a place to sign in, and pays them. The store recruits its own affiliates, sets its own terms, and keeps the relationships.

What you will learn

• How an in-house program differs from an affiliate network or an agency
• The jobs that in-house affiliate software does
• What to check before you choose software for your store

In-house program or affiliate network?

An affiliate network is a third-party marketplace that connects stores with a large pool of publishers, the websites and creators who promote products for commission. A network typically charges fees on referred sales for access to that pool, and affiliates work on the network's own site, not yours.

An in-house program skips the network. You recruit affiliates yourself, often from people who already know your store: customers, creators, and business partners. Affiliates sign up with you, and the program terms, commissions, and payout policies are yours to decide. A network is the better choice when you mainly need its publisher marketplace or its recruitment tools.

What about affiliate agencies?

An affiliate agency is a company that runs a program for you: it recruits affiliates, manages them, and reports results, for a fee. An agency is a team, not software. An agency can run an in-house program on your own software, and a store can start in-house and hire an agency later, when it wants more help with recruitment.

What in-house affiliate software does

Referral tracking

Each affiliate gets a referral link, a link with a tracking code that identifies them, or a unique discount code. When a customer buys through that link or uses that code, the software credits the sale to the affiliate. This is called attribution, the rule that decides which affiliate gets credit for a sale. To compare the two methods, read Referral links vs discount codes.

Commission rules

A commission is the share of a sale that the store pays the affiliate. The software applies your rules to each referred order. For example, a 10% commission on a $50 order pays $5. Many tools also let you set different rates for some products, collections, or groups of affiliates.

An affiliate dashboard

Affiliates need a place to get their links and codes and to see their referrals and earnings. Some tools host this dashboard on a separate website. Others put it on your store, so affiliates sign in with the same account they use as customers.

Payouts

A payout is the payment that sends an affiliate the commission they earned. Software with automated payouts pays affiliates on a schedule, for example once a month, after their balance reaches a minimum amount called a payout threshold. Other tools only record what you owe, and you send each payment yourself. Learn more in How do affiliate payouts work?

Tax forms

Commission is income for the affiliate. In the United States, payments to an affiliate may need to be reported to the IRS, the U.S. tax agency, on a Form 1099, a tax form for payments other than wages, when they pass IRS reporting thresholds. Some tools help with these forms, and some leave them to you. Read Do affiliates get 1099 forms? for the basics.

How to choose software for an ecommerce store

Before you choose, check these points:

• Your store platform: software built for your platform reads orders directly, so you do not import sales by hand.
• Where affiliates sign in: on your store's domain, or on a separate website that the software runs.
• How you pay for the software: some tools charge a flat monthly fee, and others take a percentage of affiliate sales. For example, a 2% fee on $10,000 of referred sales costs $200 a month, and that cost grows as the program grows.
• Payout methods and fees: how affiliates get paid (bank, PayPal, or store credit), and whether the processing fee comes out of the affiliate's commission or is paid by the store.
• Moving an existing program: whether you can import your current affiliates, or must invite each one again.
• Tax forms: whether the software helps with forms such as 1099s, if you pay U.S. affiliates.

For tracking methods and a longer checklist, read What is affiliate software for ecommerce?

In-house affiliate software on Shopify

Shopify stores add in-house affiliate software as an app from the Shopify App Store. Shopify also has Shopify Collabs, its own tool for working with creators, which pays creators through Shopify. Simple Affiliate is one in-house option: it runs the program inside your Shopify store, affiliates sign in with your store's Shopify customer accounts, and they share referral links or discount codes. It can pay affiliates automatically through Autopay, its automatic payout option, and there is no network referral fee. The Simple Affiliate pricing page lists the plans and fees.

To compare an in-house program with a network in more detail, read Why use Simple Affiliate instead of a network?