Affiliate Marketing: How It Works, Payouts, Disclosures

Affiliate marketing lets you earn money by recommending products and services you believe in — but it only pays reliably if you understand how tracking works, how and when you actually get paid, and the disclosure rules that keep you on the right side of regulators and major platforms. Instead of thinking of it as “passive income,” it’s more accurate to treat affiliate marketing as a small performance-based business: you drive qualified clicks, some of those clicks convert to sales or leads, and commissions show up 30–60 days later if you followed the rules.

This guide walks you through the essentials: how a click becomes a commission, the most common payout models and timelines, what the FTC and programs like Amazon expect from your disclosures, and a simple step-by-step plan to launch or clean up your affiliate setup over the next 30 days.

Affiliate marketing fundamentals: what it is and how it actually earns money

Affiliate marketing is a performance-based partnership between three main players. The merchant (or advertiser) sells a product or service. The affiliate (or publisher) promotes that offer to an audience. An affiliate network or in-house tracking platform sits in the middle and records which affiliates drove which sales or leads. When a reader you referred completes a defined action — such as a purchase, account opening, trial sign-up, or qualified phone call — the system attributes that conversion to you and calculates a commission based on the program’s rules.

Most programs pay on a “cost per action” basis rather than per impression. Traditional display ads might pay you based on views (CPM) or clicks (CPC), even if nobody buys. Affiliate programs typically pay only when something concrete happens. Common models include cost per sale/acquisition (CPA/CPS), where you earn a cut of each sale; cost per lead (CPL), where a qualified sign-up or application triggers a fixed bounty; and pay-per-call, where tracked calls that hit a minimum duration and quality threshold earn commission. This is why affiliates care so much about intent — review and comparison content tends to convert far better than generic listicles.

Tracking depends on unique links, cookies, and sometimes server-side IDs. When you generate an affiliate link, it usually contains your publisher ID and campaign parameters. When a reader clicks, the network or merchant places a cookie in the browser or stores a server-side token that identifies you as the source. If the reader completes the required action within the allowed time window, the system credits the conversion to your account. If they wait too long, buy through another affiliate’s link, or use a coupon tied to a different partner, your click may lose credit.

Payouts do not arrive instantly, even when tracking works perfectly. Most networks close out a month of activity, give advertisers time to review and “lock” commissions (including reversals for returns or fraud), send invoices, and then pay affiliates only after those invoices are paid. On top of that, many networks have payout thresholds — for example, you might need at least $50 in cleared commissions before they cut a payment. The result is that an affiliate sale in January might not show up in your bank account until March or April.

Affiliate income is business income, not “found money.” In the U.S., commissions are generally treated as self-employment income. That means you’re responsible for reporting all earnings, tracking expenses, and paying both income and self-employment taxes where applicable. Even if you never receive a 1099 from a network or merchant, you still have to report the income. Treating affiliate activity like a real business from the start — with basic bookkeeping and a simple cash-reserve plan — can keep tax time from becoming an unpleasant surprise.

From click to commission: cookies, attribution windows, and real-world examples

Every affiliate program defines an “attribution window” — how long after a click you can earn commission. A 30-day cookie, for example, means that if someone clicks your link today and buys within 30 days (without another eligible affiliate overwriting your cookie), you should receive commission. Shorter windows, such as 24 hours or 7 days, are common in highly competitive programs or on marketplaces that want to favor direct and paid traffic over affiliates.

Amazon Associates is a good illustration of a short window with a cart twist. In Amazon’s program, a click typically starts a session that lasts up to 24 hours. Qualifying purchases made during that 24-hour period can generate commissions, and if the shopper adds items to their cart within that window, those items can remain eligible when the cart is purchased later — often up to around 90 days, assuming no other affiliate link takes over and the cart does not expire. This makes the first 24 hours critical for driving “add to cart” behavior, especially for higher-consideration items.

Attribution model decides which channel or affiliate wins when multiple touchpoints exist. Many programs use last-click attribution by default: the last eligible affiliate link before the purchase gets credit, even if earlier affiliates introduced the product. Some merchants give priority to coupons or paid search campaigns, while others favor internal marketing channels. A few programs use more complex models that factor in multiple touches, but they are the exception rather than the rule. Understanding how your main programs attribute credit helps you design content and calls-to-action that maximize your chances of being the last meaningful click.

Networks and merchants also define what “counts” as a valid conversion. Terms and conditions typically include exclusions (such as certain SKUs, promotional items, or gift cards), specific rules for subscription renewals, and criteria for qualified leads or calls. Many programs reserve the right to reverse transactions when orders are returned, canceled, flagged for fraud, or do not meet quality thresholds. Looking at your reversal rate over time can show you whether a particular merchant, offer type, or traffic source is causing problems.

Payment thresholds and net terms control when cash actually hits your account. For example, ShareASale’s documentation notes a minimum payout threshold of $50 by default, which you can sometimes adjust higher. Rakuten Advertising typically operates on a net-60 schedule, meaning you may receive commissions roughly 60 days after the end of the month in which sales occurred, assuming advertisers pay on time. CJ pays out once commissions move from “new” to “closed” status and the advertiser has enough funds deposited to cover your earnings, and those payments also depend on clearing minimum thresholds. Understanding these policies lets you forecast when revenue will arrive instead of guessing.

Putting it together, a realistic affiliate timeline looks like this: a reader clicks today, buys tomorrow, the sale sits in “pending” status for several weeks while the merchant validates and the network runs its cycle, and then — once the invoice is paid and your balance crosses the payout threshold — your commission shows up one or two months later. This lag is normal, so affiliates often treat their dashboards as a “pipeline” rather than spendable cash.

Staying compliant: FTC rules, disclosures, and program policies

Affiliate marketing sits under the FTC’s endorsement and advertising rules. In the United States, regulators treat affiliate links as a form of endorsement: you are recommending a product and have a financial incentive if someone buys. The FTC’s Endorsement Guides, updated in 2023, spell out that you must disclose any “material connection” — anything that might affect how people evaluate your recommendation, including commissions, flat fees, free products, or other benefits.

Disclosures must be “clear and conspicuous,” not just technically present. In plain terms, that means your disclosure should be hard to miss and easy to understand. It should use straightforward language (“I may earn a commission if you buy through links on this page”) and appear where people will see it in context — at the top of monetized pages and near affiliate links or endorsements — not hidden in a footer, buried in a legal page, or placed only after a “read more” break. Navigation-only links to a disclosure or vague labels like “partner” are not enough on their own.

Every format needs its own disclosure strategy. On blogs and long-form guides, a short disclosure near the start of the content plus repeated reminders above major link sections usually works best. On social media, you should put “Ad,” “Sponsored,” or a similar phrase, plus a note that you earn a commission, near the beginning of the caption or in an overlay where it is clearly visible. In video or audio content, the FTC expects both audible and visual disclosures where possible, not just a note in the description box.

Program-specific requirements layer on top of FTC expectations. Some programs require particular wording or placements in addition to general disclosures. Amazon Associates, for example, requires you to use a specific statement indicating that you earn from qualifying purchases, and prohibits certain ways of sharing links (such as in most offline materials or some types of email). You must follow both the law and each program’s policies; complying with one does not automatically mean you satisfy the other.

Honesty, evidence, and moderation matter for reviews and comparisons. The FTC also pays attention to whether endorsements are truthful and whether you have a reasonable basis for claims about performance, savings, or earnings. That means you should not promise or imply results you cannot back up, should not use fake or purchased reviews, and should avoid selectively hiding negative feedback. Clear pros and cons and realistic descriptions build more durable trust than hype.

Documentation makes compliance easier to prove if you are ever questioned. Saving screenshots of pages and posts showing your disclosures, keeping copies of scripts and sponsorship agreements, and retaining old versions of terms and policies can help if a merchant audits your site or if a regulator asks how you handle affiliate relationships. Treating disclosures as a normal, consistent part of your publishing workflow reduces the odds of a problem and makes any necessary proof easier to provide.

Step-by-step: building a simple, compliant affiliate setup in 30 days

Days 1–5: Clarify your audience and choose a small set of programs. Start by listing the problems your audience actually wants to solve — for example, lowering monthly bills, finding better budgeting tools, or choosing specific products. Then select one or two large networks (such as ShareASale, CJ, Rakuten, or impact.com) and a handful of merchants that fit those needs. Double-check that your planned traffic sources (SEO, email, social, maybe light paid promotion) and content types (reviews, comparisons, tutorials) are allowed.

Days 6–10: Create or refresh three “money pages.” Focus on high-intent formats that genuinely help readers decide: a “best for X” guide that explains how to choose and compares options, an in-depth review of a product or service you can evaluate fairly, and a side-by-side comparison of two or three close alternatives. Make sure each page includes clear explanations, non-affiliate links to credible references, and calls-to-action that make sense for the reader’s stage in the decision process.

Days 11–15: Implement disclosures and technical basics. Add a short, plain-language disclosure near the top of each monetized page and above major link clusters. Build this as a reusable block in your CMS so you can apply it consistently. Test affiliate links on mobile and desktop for broken redirects or blocked scripts. If you use price widgets or ratings, confirm you are following program rules for data freshness and display.

Days 16–20: Set up tracking, naming, and basic analytics. Inside each network, organize links by merchant and campaign so it’s clear which pages and placements they belong to. Where allowed, add UTM parameters so you can see performance in your analytics platform. Track EPC (earnings per click), conversion rate, and average order value over time; even a simple spreadsheet is enough at the beginning. This helps you see which content deserves more promotion and which offers may not be worth the effort.

Days 21–25: Adjust content for intent and user experience. Look for places where readers might be confused or feel pushed. Add short “who this is for / who this is not for” sections, clarify trade-offs, and include alternatives when a product or service is not a good fit for everyone. Check that your disclosures are visible without scrolling on mobile and that affiliate links are clearly labeled as such, especially in comparison tables.

Days 26–30: Plan for cash flow, taxes, and ongoing maintenance. For each program, note the cookie window, payout threshold, and typical payment timeline. Use those notes to set realistic expectations about when revenue will arrive. Decide how much of each payout you will reserve for taxes and business expenses. Finally, create a simple change log where you record major commission changes, policy updates, or new disclosure requirements so you can quickly update affected pages instead of relying on memory.