If you're considering implementing an affiliate program through your business' web site, you'll need an effective way to track leads and sales generated by your affiliates. While writing a program is definitely an option for some, it's not an option for those that are not quite as PHP savvy. In this instance, it becomes necessary to consider an affiliate tracking software package.

Purchasing affiliate tracking software can be very complex process. Choosing the right affiliate tracking software is tedious as well. The software needs to offer a variety of information and reports to the business and its affiliates, and usually includes several features:

- Affiliate link generation
- Cookie setting
- Commission calculation
- Banner and text link displays
- Affiliate reporting
- Administration reporting
- Multi-tiered calculations
- Payment processing
- Mailing functions
- Anti-fraud functions

Affiliate tracking software programs can be divided into three different categories, and while most will offer the basic features, there are others that offer a variety of features. Depending on your business size and your business needs, it's wise to consider all three options before making a decision to determine which is the best option for you.

1. Third party affiliate tracking software with management software.

With third party affiliate tracking software, you'll work with a network that will look after all payment processing, creative storage, fraud control, and most of the communications made with affiliates. This leaves you free to work at the core of your business.

The down side of third party affiliate tracking software management programs is that they can be a very expensive, and there may be packages of this sort that charge set up fees, monthly maintenance fees, and commission fees on the commissions paid to affiliates. For instance, if you have an affiliate that has earned $100 in commissions, the network may charge you an additional $30 on top of the other fees you're already paying. It's not uncommon for this management system to also require you to maintain a minimum deposit, and depending on the network, this fee could run into the thousands of dollars. An example of this type of affiliate tracking software program is Offers Quest, www.offersquest.com.

2. Remotely hosted affiliate tracking software, with the merchant serving as system administrator.

In an affiliate tracking software set up that is remotely hosted, a powerful software package is made available for use by merchants, but it is hosted on the software companies' own servers. The disadvantage of this affiliate tracking software is the cost, which can run into the hundreds of dollars per month just for access into the system. There is also usually a substantial set up fee to get started. The advantage of remotely hosted affiliate tracking software is that these types of systems tend to offer a complete range of features to cover a myriad of affiliate program options. To have all of these added features in a stand-alone software package would cost many more thousands of dollars. By leasing the software, it becomes much more affordable and easily accessible, even for a small business owner. A popular remotely hosted affiliate tracking software host is AssocTrac, assoctrac.com, which was developed by Corey Rudl, the late internet marketing expert who brought affiliate marketing into the limelight.

3. Locally hosted affiliate tracking software.

Possibly the best thing about running your own software from your own computer is that you don't have to worry about monthly fees, but there are other positives to this affiliate tracking software as well. For example, you can usually easily alter the code to suit your purposes. Additionally, you won't have to worry about the fact that any affiliate links generated will point directly to your site instead of a third party. This is especially of benefit in relation to link popularity, a factor that many search engines use when calculating rankings. Locally hosted affiliate tracking software can also be an inexpensive option because packages start at under $100. An example of a good locally hosted affiliate tracking software package is iDev Affiliate, idevdirect.com.

These three types of software can range in price from less than $100 to more than $10,000. Additionally, in the instance where you would choose third party and remotely hosted affiliate tracking software solutions, there may be a maintenance fee or commission fee as well. For these reasons, examine several different software packages carefully before deciding which affiliate tracking software package is best for your particular business needs. There are hundreds of options in affiliate tracking software, and a search using your favorite search engine will generate enough leads and options for you to make an educated decision on which affiliate tracking software package would best fit your business and your business' needs.