Term Explanation

A product or service sold by a company or a person is referred or recommended to the public by a third party, and the third party generates a commission each time someone purchases the product using the referral gateway. This referral system is called affiliate marketing, and the central government regulation will create a nationalized affiliate marketing system that generates more revenue for businesses and creates affiliate employment for the public.

What is the Need for an Nationalized Affiliate Marketing System?

• All upcoming and existing software companies can create additional sales by selling software’s to foreign nations via affiliate marketing. Amazon, Envato, Etsy and Appsumo are some of the most significant online marketplaces that earn millions in additional sales from affiliate marketing.
• Indian companies can rapidly globalize and create a loyal base of influencers and promoters inside India and outside India for Indian products. Influencers outside India will bring foreign money into India via sales, and providing them with a portion of the sales for referral is not a loss at all.
• This system will help create employment for millions of people in affiliate marketing in India. Many people can earn money from being full-time vloggers, bloggers and social media influencers.
• Affiliate marketing is an additional income to many people with other existing jobs. Many can earn money at home through affiliate marketing as a part-time opportunity.
• Physical stores and smaller businesses can gain more business via additional sales.

Two Types of Affiliate Marketing Economic Systems

A. Digital Affiliate System

E-commerce platforms like Amazon and Envato, where various goods and services are sold, have their own affiliate programme and affiliate portal to regulate affiliate businesses.

The government should enforce a mandatory digital affiliate programme for all B2C (Business to consumer) businesses above 100 crores annual turnover with an e-commerce presence in India. Furthermore, the parliament should pass special law-making affiliate marketing mandatory for such companies within a stipulated time. B2B businesses can join in their self-interest, and there is no point in forcing as there are only limited clients in most cases.

Government should develop or promote software’s that support affiliate systems such as WordPress plugins, Mobile app Templates, Public Access Source Codes and API system. Businesses with starter websites earning lakhs or thousands can voluntarily adopt these and promote their products. These open-source software’s are intended for all companies below 100 crore annual turnover and mainly small businesses below one crore. It should be voluntary only and should not become additional pressure for small businesses.

B. Physical Store Affiliate System

This is a B2C affiliate system wherein government creates an online portal in which affiliates and business people can enrol. The portal works as a middle player connecting affiliate partners and business people. The public will receive a cashback code for particular purchases or total shop-wide purchases from the store owner via affiliates. The affiliate will get a percentage of the total sales amount, also. Shop owners can upload sale and affiliate payment details in the portal, and the affiliate partner can track it via the portal.

Here is an example of how this works.

Shop A sells microwave ovens. Individual A is a social media influencer. Shop A decides to promote its products via the physical store affiliate system. The total cashback that can be offered for microwave ovens is 4 per cent of MRP. The shop owner is already in contact with the influencer. Shop owner promises 1% commission to affiliate in case of referral sales and 3% cashback to the buyer. A unique cashback code is provided to the affiliate partner, i.e., the social media influencer or public influencer. Influencer promotes the product online, and people visit the shop. The customer at checkout claims the 3 per cent cashback code. The shop owner submits the generated GST bill number and amount in the portal after the purchase and provides a 1 per cent commission via the portal to the affiliate. The affiliate can track the sales via the portal.

All small businesses can earn more sales by joining this portal. The businesses willing to participate in this program can mention the details in the portal. Affiliate partners can join after seeing small businesses’ affiliate commission details and programme details. The programme can be scheduled for particular days, and the business owner can decide when cashback is live.

Business owners should have full authority in deciding who can join as an affiliate and can create conditions for registration as affiliate partners. They can also prescribe conditions for affiliate applications such as 10,000 Instagram followers.

Government-Sponsored GST Tax Subvention Programme

Businesses that regularly promote affiliate channels and digital transactions will get a per cent of GST subvention for a particular month of a year or specific date like Indian-made Black Friday. So, when the business community file for GST, they need to remit only a lesser amount for sales on a particular day. They can, in return, provide additional cashback to customers and additional commission to affiliate partners during these offer periods.

How is this Beneficial for the Business Community?

The small businessman needs a website or extensive infrastructure to drive sales using online tools. So a common online portal will help drive customers, benefitting customers, business owners and affiliate partners. In addition, the small businessman would be happy that various influencers promote their shop and products and would not mind sharing a portion of their sales as commission.

How is this Beneficial for the Government?

The government can charge a particular percentage, such as 10 per cent, as a tax on the commission received by the affiliate and can use this money to run the portal.

If India can add servers in different states and start hosting companies, lakhs of new websites will be created by affiliate partners in a few years that promote affiliate products and services.

The hosting companies and affiliate intermediary websites will create a new market worth crores. GST revenue from such markets can provide hundreds of crores in the coming years.

Who Can Enrol in this Programme?

All businesses below 100 crores annual turnover can enrol in this program. Larger companies should create their own affiliate portal. The physical store affiliate system is to promote smaller businesses.

Special Note: This is the twenty-fourth chapter of the book New India Manifesto by Blessen T. Sam. The concepts introduced in this book are unique, and referencing the book and the author is appreciated. Support the hard work of the author to modernise India by purchasing a print copy of the book from Amazon or Flipkart.