Starting an Affiliate Marketing: Two Options
In starting your affiliate marketing program, you generally have two options: running the affiliate program in-house or joining an affiliate network like ShareASale, ClickBank, CJ, and more.
The main difference lies in the technicalities. If you run your affiliate program in-house, you’ll need to handle every technical side of the campaign from having a database, tracking your affiliates’ sales, managing the payment side, and so on. The affiliate network would also help with the promotion since these networks have their use
If you join an affiliate network, on the other hand, the network will handle all these technicalities, but you’ll need to pay a commission on top of what you’ll pay your affiliates. For example, if you sell $100,000 worth of products through the network while paying a 10% commission to your affiliates (so $10,000), you’ll need to pay up to 30% of this $10,000, so in total, you’ll need to pay up to $13,000 in a $100,000 sale.
Obviously, there’s no ‘right’ choice for you, so ultimately the choice would depend on whether paying the extra commission is worth it. In making your choice, you can consider the following:
- Are you starting from scratch in recruiting your affiliates?
- Do you need a comprehensive reporting system?
- Do you have an in-house design team? Do you have your promotional creatives ready?
- Do you need tracking technology in tracking your affiliates’ sales?
- Do you need help in managing affiliate relationships?
If you answered mostly yes, yet you don’t have an adequate team to handle the technicalities, then probably you’d want to join a network.
Joining An Affiliate Network
There are many affiliate networks available out there, and choosing just one to join can be extremely difficult. Remember that you can join more than one network as a merchant, but some of them charge setup costs. The setup costs can range from $0 to more than $10,000, but they are often negotiable.
Keep in mind, however, that the more networks you join, the higher the potential cost, so you might want to focus on just one or two networks.
Ultimately your choice should be based on three main considerations:
both the setup cost and how much the network charges in commission. You’d want to weigh whether the features and conveniences the network offer is worth this extra cost
whether the network’s existing user base matches your audience (i.e., if these affiliates are a good match in promoting your product)
what kinds of features does the network offer? (advanced tracking, analytics, easier promotion, etc.)
Depending on the product you sell, some networks might be a better fit for you compared to the others, but here are our recommendations for the top affiliate networks available today:
- ClickBank: one of the biggest networks in the industry with a massive affiliate user base. ClickBank also supports a lot of smaller niches that aren’t supported by other platforms. So if you are selling uncommon products, ClickBank might be your best bet
- ShareASale: one of the oldest affiliate networks out there, covering various niches with a massive user base.
- CJ: formerly Commission Junction, CJ claimed to be the largest and most established marketing network out there. With a huge user base and supports various niches, the interface is a little bit complicated but does the job pretty well.
Launching Your Affiliate Program In-House
While joining an existing affiliate program certainly has its perks, there are also some benefits of having your own affiliate program in-house. They are:
this one is fairly obvious. As discussed, affiliate networks might charge up to 30% in commission on top of what you pay your affiliates. If you build your in-house platform, you can use a tracking solution for much cheaper (less than 10% or even less than 5% in commission)
you can easily contact key influencers/affiliates in your industry and arrange personalized promotions for each affiliate.
fairly obvious, with your in-house program, you have more control over your affiliate program, and you can take more advantage of your knowledge regarding your own products or services.
Keep in mind, however, that there are some extra considerations you should have when building your affiliate program in-house:
Tracking and Reporting
while you can use various tracking software to help track the sales, you still need to create reports and perform analytics to measure your and your affiliates’ performances. This can be a time-consuming process, and most likely you’ll need to hire someone to do the job.
if you only work with one or two affiliates/influencers, then managing invoices and payment is fairly manageable. However, if you have hundreds and even thousands of affiliates, this can be a major hassle.
Promotion and recruitment
if you are a brand new affiliate program, attracting affiliate marketers can be difficult and you might need to invest a lot in both time and money to market your program.
you’ll need to ensure all affiliates are promoting your product ethically, which can be very difficult to monitor when you have a lot of affiliates.
Fortunately, there are now various tools and plugins that can help you set up in-house affiliate programs in no time, and also help with the tracking/reporting process. AffiliateWP, for example, is a WordPress plugin that can help you easily create a full-featured affiliate program.
Which approach is the right one for your business? Unfortunately, there is no one-size-fits-all answer for everyone, and it will ultimately depend on your business’s needs, available resources, and timeline.
While there hasn’t been a better time in starting an affiliate marketing program, it’s very important to choose the right approach and also the right platform to build your program so you can maximize ROI.
Author: Mike Khorev
Mike Khorev is an SEO consultant who helps SaaS, software, IT, technology, B2B and startup companies generate more sales and grow revenue online. He offers expert advice on marketing your company the right way through performance-based SEO, inbound marketing, conversion rate optimization, search engine marketing and many other online practices.