Hi,

We are getting ready to launch our affiliate program and want to know anything about the accounting side.

Do we have to send these people 1099's

Setting up accounts for these revenues and payout?

Any information is helpful

no one knows?

We have only a couple affiliates, but we treat them as customers who get a discount.

The sales are billed as sales to the affiliates (and we dropship to the customers). Then our affiliates send us a check each month for the products and shipping.

I really don't know anything about affiliate programs, so that might not be what most companies do, but it works for us.

I don't think you would have to do 1099s. That would be for contract employees, which they're not.

i belong to quite a few affiliate programs, and as i remember last year , recieved 1099misc for most if not all.

I know a little more about this even thought it is an old thread.

Affiliates are sites that direct traffic and sales to your site. That is your customer and they get a cut of the sale.

Reseller are sites where people buy from them and you dropship/white box ship things to their customers. You then charge them for the sale. That is thier customer. In theory the end customer should never know who the vendor is or what their wholesale cost is.

Affiliates are just an expense - no 1099 or W2s needed. It should be counted as an advertising cost.

Resellers are just customers and are treated no differently than if a customer walked in off the street. No 1099 involved.

Now of course there relationships in between the two so your local accountant is always the best reference.

And be careful of the term "contract employees". Most of the time somebody is one or the other - contractor OR employee. In rare cases do you hire an employee under contract terms.

Dear Patrick,

This is the ideal answer that I was looking for. I have a question that I would prefer asking confidentially if I may. The beast lurketh.

ZP