Affiliate programs are a form of marketing where providers pay commissions to users who drive new subscribers to their site.

Terms vary, but it’s usually a small percentage of the signup value.  So if you’re an ExampleHost user, you can join the affiliate program (usually free) and then you’re given a link, like https://clients.example.com/signup.php?aff=1234.  If someone clicks on the link and signs up, you get a small percentage of the sale.

In theory, it’s a win-win for everyone.  The provider gets a new sale.  The user gets paid.  And the new user discovers a service they might not have known about until the first user mentions it.

In practice, practice is not the same as theory.

The first issue is that really low-end providers seem to fail to pay out affiliate commissions.  There’s a thread on LowEndTalk right now about someone who’s been waiting a long time for CloudCone to pay.  I think this is very poor form on the providers’ part.  They got the benefit, and now they should share the wealth.

Or…did they really get the benefit?  If I’m considering ExampleHost, I might sign up using a friend’s link even if I would have signed up anyways.  If the affiliate link is given to a big-name influencer, then perhaps the advertising outweighs the cost, but in a lot of cases, whether the consumer clicks on an affiliate link vs. a regular link is chance.

And of course, affiliates are incented to spam affiliate links.  On some forums, if you ask for a recommendation, a lot of the responses are going to be “check out ExampleHost! They’re awesome! (affiliate link)” regardless if the poster has ever used ExampleHost.  The higher the affiliate commission, the more people are going to spam.  It perverts the experience of getting a recommendation.

As @MannDude, owner of InCogNet, said:

From a provider’s point of view, affiliate programs are typically high risk, low reward anyway. You immediately attract the worst type of people who will try to game the system in their favor, recommend you in the worst places, etc. Would rather not have affiliate links spammed on questionable sites or by questionable users or the administrative headache of figuring out how some random user with a $5 VPS has a “90% conversion rate” on his affiliate link with dozens of questionable signups that all came in on the same day or something. Giant red flag that some bullshit is soon to occur that will need to be dealt with.

Finally, paying a commission is inherently a cost, and so that has an inflationary effect on pricing.  You can argue that every VM sold has a marketing cost and this is the marketing cost for that VM, but fundamentally if the provider is paying out money, that money has to come from somewhere.

raindog308

raindog308 is a longtime community LETizen, technical writer, and self-described techno polymath. With deep roots in the *nix world, he has a passion for systems both modern and vintage, ranging from Unix, Perl, Python, and Golang to shell scripting and mainframe-era operating systems like MVS. He’s equally comfortable with relational database systems, having spent years working with Oracle, PostgreSQL, and MySQL.

As an avid user of LowEndBox providers, raindog308 runs an empire of LEBs, from tiny boxes for VPNs, to mid-sized instances for application hosting, and heavyweight servers for data storage and complex databases. He brings both technical rigor and real-world experience to every piece he writes.

Beyond the command line, raindog308 has a life-long love of German Shepherd Dogs, high-quality knives, target shooting, theology, tabletop RPGs, playing guitar, and hiking in deep, quiet forests.

His goal with every article is to help users, from beginners to seasoned sysadmins, get more value, performance, and enjoyment out of their infrastructure.

You can find him daily in the forums at LowEndTalk under the handle @raindog308.