Is Affiliate Marketing Legal – Complete Guide For Beginners
Thirteen years ago when I was first getting started with online marketing I came across this thing called affiliate marketing where you can sell other people’s products on your blog. However, at the time my first thought was is affiliate marketing legal?
Yes, affiliate marketing is legal. However, you are required to disclose that you are an affiliate and must have a written policy located in a conspicuous place on your website to let visitors know that you are promoting products that may earn you an income.
Now that you know it’s legal this doesn’t automatically mean you can just start posting affiliate links all over. There are some rules you need to follow to stay compliant and keep you from getting in trouble.
Important: I am not a lawyer and I am not giving out legal advice here. It is up to you to consult an attorney for legal advice.
Is Affiliate Marketing Legal or is it a Scam
When it comes down to it affiliate marketing is legal and is not a scam. Top companies from Amazon to small boutique shops have affiliate programs these days.
However, years ago these programs were not so widespread. Back in 2005 when I was first getting started with online marketing these programs were far and few between.
I remember reading about people having success with affiliate marketing and thinking is this actually something that you can make money with?
I really wanted to give it a shot but I had no idea if it was something that would work or even legal to do.
Then all of a sudden I started to find programs like Capital One and Amazon. In fact, the very first affiliate program I started selling was the Capital One 360 savings program.
If companies like that were promoting affiliate programs then I knew this was legit and a real way to earn an income.
However, just because affiliate marketing is legitimate doesn’t mean you can do whatever you want. You still need to follow the rules when it comes to promoting affiliate products.
Who Regulates Affiliate Marketing
There are 3 levels of regulation when it comes to affiliate marketing or internet marketing in general.
1. The Federal Government
The FTC regulates the affiliate marketing industry in the United States however each country has its own regulations.
For example, European Union has its own set of rules called GDPR when it comes to affiliate marketing and rules that websites should follow.
I’ll cover more of these rules and requirement later in this article.
2. The Affiliates Companies Themselves
Second, companies that offer these programs are responsible for regulating and overseeing these programs as well. A good example of this is Amazon.
Amazon has a very stringent affiliate program. However what I’ve found is that each company runs their programs differently, while Amazon is very strict on who they let in, other programs don’t really have very tough qualifications and don’t really say too much unless a clear federal regulation is being broken.
In fact, in order to stay in Amazon’s affiliate program, you need to generate at least one sale every 180 days. However, I’ve found Amazon to carry very little breathing room if you’re breaking the rules.
In fact, I seen people making thousands of dollars per month get kicked out for not following the rules and this is perfectly within the rights of company who has the program.
3. Affiliate Management Companies
Third and finally, if a program is hosted by affiliate management companies such as ShareASale or Commission Junction they have rules regulations that must be followed as wells.
In order to get approved with any program an affiliate manager with review your site to make sure you meet certain requirements. If you don’t meet these requirements you’ll get denied from joining the program.
So what are the legal requirements you should follow?
4 Affiliate Marketing Legal Requirements
If you’re new to being an affiliate there are a few things you’re going to have to follow in order to be compliant with with the FTC and the companies themselves.
Breaking these rules could result in a cease and desist, removal of the program, or in extreme cases fines from the FTC or EU for shady practices. Unless you are doing something severely wrong I can’t see you getting a fine.
So whether you’re are new or been doing affiliate marketing for a while it’s good that you consider these rules. As I mentioned earlier I am not a lawyer so make you consult with a lawyer first.
1. People Must Know Your an Affiliate
To start people must know that you are an affiliate in advance of them clicking on your link. Some people like to hide this from people but I’ve found its better to just get this out in the open.
You can do this in a few different ways.
First, you can just write the words affiliate link right after the link. For example, if I were promoting Teachable I would put the link Teachable (affiliate link).
I don’t personally do it this way but this is probably the most obvious way to do it.
Second, you can put a disclosure on the page itself. This can be done in a lot of different ways from putting a small line at the top of every page, sidebar, or footer.
If you look at my side bar you can see my affiliate notice. The key is to make sure its some place conspicuous. To be honest most people don’t go out of their way to find this but it is still good to have this.
2. You Must Have the Proper Disclosers
Having a small written notice on your page is only the first step. You will also need the proper disclosers on your website.
These documents are a necessary part of every website. Later in this article, I will share where you can get these documents for your site.
These documents would include…
- Privacy Policy
- Cookie Policy
- Terms and Conditions Policy
- ELUA Policy
- Return and Refund Policy
- Disclaimer
- Cookie Consent
3. Follow the Rules of the Affiliate Company
Next you need to follow the rules of the affiliate company itself. Each company has its own rules that you need to follow.
For example, Amazons affiliate program has some very specific rules that you you need to follow. Here are just a few.
- Income. You need to earn at least one sale to stay active with the program.
- Images. You can only use Amazon images through their API.
- Reviews. You can’t use people’s specific reviews from Amazon on your site.
Each company has their own rules when it comes to this so make sure you learn them so to avoid getting removed from the program.
4. EU Compliance
With the recent compliance rules created by the European Union called GDPR, they have extra rules you must follow especially if you live in the EU. However, these can apply even if you get traffic from EU countries.
One specific rule is the cookie policy. This rule basically states that people who come to your website should know that you have tracking cookies on your website.
To get around this you may want to consider adding a simple WordPress plugin that will allow people to confirm that you have cookies on your site.
Where to Get Affiliate Marketing Legal Agreement Templates
Now that you have a basic understanding of some of the legal requirements that come with affiliate marketing you will need to have some basic legal pages set up on your website.
To do this I use Free Privacy Policy Generator. (I am not an affiliate of this product.)
1. Privacy Policy
The first thing every website needs is a privacy policy. A privacy policy lets people know that you won’t share their information and if you do to who you will share it.
It also will limit your liability and comply with all the major rules from GDPR to California Online Privacy Protection Act.
You can get your free privacy policy here.
2. Cookie Consent
Next, all affiliates should have a cookie policy. This will inform visitors that you have tracking cookies and allows them to click a box to let them know what is going on.
I like this sites tool for this because it lets you create the code and put it directly on your site without having to use a plugin.
You can get your free cookie consent template here.
3. Terms and Conditions Policy
The terms and conditions policy lets your visitors know what your policies are for your website or if you are selling your product, app, or even your intellectual property.
You can get your free terms and conditions policy here.
4. ELUA Policy
This policy is for those that have an app, mobile, or desktop application that needs to meet the GDPR policies and guidelines. So if you have a mobile app or web application then you will need this.
You can get your free ELUA policy here.
5. Return and Refund Policy
You’ll also need a return and refund policy if you have an ecommerce or drop shipping store. People need to know how long you have to return a product and what kind of refund you could expect.
If you’re doing affiliate marketing then the company they are buying it from will be responsible for this policy, not you.
You can get your free return and refund policy here.
6. Disclaimer
Next, you’ll also need a disclaimer policy. There are many types of disclaimer policies from an affiliate, to medical disclaimers. Your disclaimer will be determined by the type of site you have.
So if you have a fitness site and your an affiliate for a product your disclaimer will have to cover both of these.
You can get your free disclaimer policy here.
7. Cookie Policy
Finally, you’ll need a cookie policy. The cookie consent is a policy that pops up on your site and lets visitors know that you have cookies. However, the cookie policy is a page that explains all of the policies on your site.
So whether you’re complying with ePrivacy or GDPR this policy will cover all aspects.
