Earn referral fees and commissions the legal way

Referral fees and affiliate links can add income to a business you already run. Here's what works, what to disclose and what's off limits.

A referral fee is money you get for sending a customer to someone else's business. An affiliate commission is the online version: you share a link, and you earn a share when someone buys through it. Both can add income on top of a business you already run. On their own, they rarely pay quickly, so treat them as an extra, not the plan.

What works when you're starting out

1. Software you already set up for clients. If you help clients with newsletters or online shops, the tools you recommend may pay for referrals. Kit pays 50% of a referred customer's first 12 months. HubSpot pays 30% for up to a year. Shopify pays up to $150 when someone you refer signs up for a paid plan. The amount depends on their country, and it favors affiliates with an established audience. Only recommend a tool you'd suggest without the commission.
2. A written agreement with a local business. For example, a cleaner, a photographer or a landscaper agrees to pay you a fixed fee for each booked job you send them. Put it in writing: what counts as a referral, when the fee is earned, when it's paid. Tell the customer you may be paid for the referral.
3. Affiliate links in your own content. Amazon, Etsy and creator storefronts all have programs. Many accept you only once you have an audience, and some programs are closed to new applicants right now, so check before you build a plan around one.

Always disclose

The FTC says your disclosure should be close to the link, in plain words. "Affiliate link" on its own is not enough. A sentence like this works:

I get commissions for purchases made through links in this post.

In a video, say it and show it inside the video, not only in the description. Amazon and other programs have their own required wording too, so copy it from their agreement.

What's off limits without a license

• Real estate. Most states don't allow agents to pay unlicensed people for referrals.
• Mortgages and home closings. Federal rules (RESPA) ban fees for referring this business.
• Insurance. Some states allow a flat referral fee only if it doesn't depend on whether anyone buys, and only if you don't discuss the policy itself. Rules vary by state.
• Legal and medical services. Lawyers and many health providers face strict limits on paying for referrals, so these are best left alone.

When in doubt, ask the business to confirm in writing that the fee is legal in your state, and check with your state's licensing board.

A prompt to draft a referral agreement

Draft a short, plain-English referral agreement between me, [your name], and [business name], a [type of business] in [city, state]. Terms: I introduce customers who contact them through my link or name. They pay me [fixed fee] for each referred customer who books and pays within [number] days. Payment is due within [number] days of the job. Either side can end it with [number] days' notice. Mark anything that may need legal review with [CHECK]. Do not add terms I didn't give you.

Read it, fill the [CHECK] gaps and have both sides sign. For tracking referrals and sending reminders, see turn every customer into a project file AI can read.

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