As with my previous article, the inspiration for this article came via a conversation I had with someone, not a client this time, one of my affiliate marketing lawyer. For those who do not know what this is, I will attempt a brief description and then an illustration.
So, my friend’s suggestion was that he would to become an affiliate marketer in the evenings and on the weekends. For example, in order to run an online sports betting website in Lagos, Nigeria, the company needs to be licensed by the Lagos State Lotteries Board. Any company carrying out the business of online sports betting without a licence is committing a crime. If you therefore assist in the commission of this crime, by actively engaging customers on behalf of an unlicensed company, you could be held liable for being an accessory to the crime. Granted, there is no case law in Nigeria to support this, however, it is a theory of criminal liability, which definitely holds up to academic scrutiny. Therefore, before you sign any affiliate agreement, ensure the company is validly registered to carry on that business, ask for proof, do your research etc.
Compensation Determination You need to understand exactly what you are being paid for, it varies by website, and varies by industry. It is imperative you know this, so you can gear your marketing towards achieving those metrics. Volume Cap Sometimes the business sets a volume cap for each affiliate. This might be done so that the business can better manage its cash flow and work within its budget. It is your duty therefore when reviewing the affiliate marketing contract to ensure that no such cap exists, and where it does, then you should use it as a barometer to manage your lead flow into that business.
What you do not want to be doing is passing on customers to the business after exceeding your volume cap, because doing that would just mean that you are giving the business free leads. Also linked to this is the fact that some of these agreements may stipulate that if you terminate the agreement within a certain time frame, or at a certain time of the month, you forfeit your right to certain payments due. Dispute Resolution So, the crux of this business model is that you are sending customers from your website to Mr. An issue may arise where you check your analytics and reporting and see that in Month X you sent 35 customers to Mr Lagbaja, however, Mr Lagbaja’s analytics and reporting tell him that you only sent 28 customers in Month X. What happens in such a situation? The operation of a clause, using the example given earlier above, would be to the effect that in a scenario where an online betting website operated without a licence, and you obtained customers for this website as an affiliate marketer. Also, the contract might have a disclaimer, which disclaimed any express or implied representations or warranties regarding the products or services offered, and any implied warranties of ability or fitness for a particular purpose.
5 years’, and a customer was to click on the link to go to the seller’s website, went ahead to buy it, and after using it for two months it breaks. The above is not an exhaustive list, it is just a cursory look at some things you need to think about from a legal perspective before you sign up to an affiliate marketing program. It is highly unlikely that one affiliate marketer can get a website to change its terms of agreement, however you should be aware of what you are signing before you sign up. Get a lawyer to review the agreement, or read it yourself very thoroughly!