About 2 years ago, I started my first affiliate scheme. I've read 2 or 3 e-books on affiliate marketing, joined several forums and finally, I was on my way to "boost my business". Did I have enough knowledge to start? Yes, I did. But what I was missing was experience, which resulted in bad priorities.

Here comes first advice: don't overdo the theory, learn by practice. Literally - be your first affiliate.

We all know that - nothing's for free. You may need much smaller budget for your affiliate program than for PPC campaign, but it takes what it takes. And you won't succeed if you are not ready to do what's necessary.

Before you start, make sure your website actually sells at reasonable conversion ratio. Without it, don't start affiliate program at all, it's a waste of time and money. This is the very first priority.

Back then, I had wonderful opportunity to manage affiliate program for e-book-selling website owned by friend of mine, and it already had average conversion. Well, here's the first mistake - we didn't even try to improve conversion, we were dreaming about affiliate success instead. Anyway website wasn't bad, so we had some real chance..

So we bought tracking software, put the offer on our website, submitted to about 15 affiliate program directories, and invited a few friends to join. And we waited. Nothing big happened; we received about 50 unique visitors after first month. I tried to contact potential partners directly and was disappointed by the fact almost no one replied my emails.

My advice is: Make sure every your customer gets your affiliate offer. Submit to ALL affiliate program directories you can find, it's the best you can do to start. You are more likely to get affiliates this way, then by contacting website owners directly. When contacting directly, learn to evaluate website. Design is less important than content. Be real, don't waste your time contacting websites much more successful than yours - they'll have no motivation to join and they will use their ad space for more attractive offers. Use tools to research websites, e.g. Alexa toolbar (traffic estimation for website) or Google toolbar (importance of website by Google page rank).

We gave our affiliates banners, text links. Give them also customizable product reviews to include on their sites. Their task is to pre-sell, make visitors curious about product. Product review is better than banners for this purpose.

Be active in forums and social networking websites. Be where other people from your niche market are. Ask, discuss - it will give you ideas, opportunity to learn and share knowledge. You may also meet potential affiliates this way.

Make own affiliate website with content related to your e-commerce site, or start a blog on your site. Thus try yourself how hard it is to promote your products.

Be ready for fraudulent purchases with stolen credit cards - set up reasonable payout minimum. Owners of stolen credit cards contacted us usually within 2 months from fraudulent purchases. Check suspicious affiliate's website; ask him what he/she does to be so successful, do not accept websites from free hosting services.

Conclusion: After 5 months, affiliate program finally generated positive ROI. I took a regular job, quit managing affiliate program due to lack of time. At the time I quit, we made about $150 of profit :-). As far as I know, it still works as one of advertising channels for the website, however never managed to outperform PPC campaigns. After all, it was worth the effort :-)