Can independent programmes attract top affiliates ?

[MikeL]

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Hi all,

I am a merchant looking to set up an affiliate scheme and would welcome a few pointers from you guys to help me decide whether to sign up with one of the big 5 UK affiliate networks or go for developing my own independent programme. Here are the pros and cons of each option as I see it:

Option 1 - Sign up with affiliate network

Advantages
1. Instant access to a pool of affiliates, with scheme advertised by affiliate network
2. Independent management of sales records and payment of commissions through a network trusted by both affiliates and merchants
3. Affiliates are able to manage wide number of programmes through one point of contact.
4. Hosting of banners and buttons saving bandwidth on merchants site
5. Not sure on this one but it is possible that larger more experienced affiliates may only be interested in working through affiliate networks and will not look at independent schemes

Disadvantages
1. Initial set up fee £1000 to £3000 with monthly fee £200 and 30% rake off the affiliates commission
2. Possible barrier between merchant and affiliates, keen to promote business only through the network and if the merchant changes to a different network, possible leaving penalties and loss of affiliates.
3. Merchant less able to provide high commissions due to networks commission.
4. Google PR is driven by links, with an affiliate network affiliates link back to the networks site so there is no benefit of extra links for the merchants Google PR. The opposite side of this argument is possibly that the merchant is also protected from links from bad affiliate sites which have been dropped by Google.

Option 2 - Set up own independent scheme

Advantages
1. Reduced cost. I have been looking around for an affiliate management system based on PHP and MySQL, my current favourite is iDevAffiliate ( http://www.idevdirect.com/software/ ), have any of you guys any experience of this, any other suggestions would be welcomed. Cost $140, I guess would take around a day to set up and integrate into my site
2. Control over affiliate selection, content supplied, integration of click recording, and payment to affiliates.
3. Text, buttons, deep links would feed back directly into my site increasing Google PR. Generation of the Product links could be integrated into my cart software.
4. Communication direct with affiliates with feedback on how to improve feed and conversion rates
5. Offer higher commissions to affiliates increasing popularity of scheme in affiliate community

Disadvantages
1. Effort required to set up, manage, and promote, the scheme. Organising efficient affiliate payment and managing interaction with affiliates of who 95% may not actually provide any sales according to some sources.
2. The possibility that larger affiliates capable of delivering high volumes of targeted traffic will not consider the scheme as it is not on one of the big affiliate networks and has not been established long enough to build up trust within the community
3. The Legal T&C's will need to be created and checked as will the implementation to prevent errors or abuse.
4. Possible come back if any affiliates include our content in spam emails or aggressive marketing techniques


Any comments on the above would be appreciated, particularly the issue of whether so called super affiliates would consider working with an independent scheme, and how best to promote an independent scheme. It seems top me that some of the most successful schemes such as Amazon and Ashford run their own schemes so why not the small to middle sized companies if we are able, and prepared to spend the time to make it work.

Great forum by the way, learnt a lot in the last couple of days but probably have a long way to go.

[Ecco]

independent programs are just as viable as those run over a network. In fact most of my highest earners are independents. The problem is how do I find them...

The networks are an easy source of income and, chances are, I know I'll probably get paid. However, a really good independent program that serves my niche, with a merchant that's clued up often does well.

The fact that your posting your questions here suggests you have at least done some research. Now target and find affiliates that match your niche

[jess1]

Hi Mike L:


Advantages
1. Instant access to a pool of affiliates, with scheme advertised by affiliate network

Unless you have a good affiliate program, don't count on too many signing up. Also you will find if one affiliate has signed up to one network the chances are they would have signed up to them all. Nature of their business.

2. Independent management of sales records and payment of commissions through a network trusted by both affiliates and merchants.

Most of the ASP's have decent tracking and logging stats, some better then others.

3. Affiliates are able to manage wide number of programmes through one point of contact.

And the merchants dedicated affiliate manger,

4. Hosting of banners and buttons saving bandwidth on merchants site

nope not all.

5. Not sure on this one but it is possible that larger more experienced affiliates may only be interested in working through affiliate networks and will not look at independent schemes

No but Ecco has pointed this out.

Disadvantages
1. Initial set up fee £1000 to £3000 with monthly fee £200 and 30% rake off the affiliates commission

Affiliate future and paid on results don't have a set up fee and their override is less.

2. Possible barrier between merchant and affiliates, keen to promote business only through the network and if the merchant changes to a different network, possible leaving penalties and loss of affiliates.

see answer under question 1 in advantages.

3. Merchant less able to provide high commissions due to networks commission.

Good point.
You need to work out your profit margin and then leave a bit so you can give affiliates cash insentives for certain times of the year or your top performing affiliates.

4. Google PR is driven by links, with an affiliate network affiliates link back to the networks site so there is no benefit of extra links for the merchants Google PR. The opposite side of this argument is possibly that the merchant is also protected from links from bad affiliate sites which have been dropped by Google.

This is a personal preference choice.

Option 2 - Set up own independent scheme

Advantages
1. Reduced cost. I have been looking around for an affiliate management system based on PHP and MySQL, my current favourite is iDevAffiliate ( http://www.idevdirect.com/software/ ), have any of you guys any experience of this, any other suggestions would be welcomed. Cost $140, I guess would take around a day to set up and integrate into my site.

Are you including labour & nurturing time here?

2. Control over affiliate selection, content supplied, integration of click recording, and payment to affiliates.

You get this with most ASP's

3. Text, buttons, deep links would feed back directly into my site increasing Google PR. Generation of the Product links could be integrated into my cart software.
4. Communication direct with affiliates with feedback on how to improve feed and conversion rates

You get this with most ASP's

5. Offer higher commissions to affiliates increasing popularity of scheme in affiliate community

You get this with some asp's too

Disadvantages
1. Effort required to set up, manage, and promote, the scheme. Organising efficient affiliate payment and managing interaction with affiliates of who 95% may not actually provide any sales according to some sources.

Show me an affiliate program that does not have the 80/20 rule.
20% are generating the sales.

2. The possibility that larger affiliates capable of delivering high volumes of targeted traffic will not consider the scheme as it is not on one of the big affiliate networks and has not been established long enough to build up trust within the community

if it's a good program they will join

3. The Legal T&C's will need to be created and checked as will the implementation to prevent errors or abuse.

Ts and Cs will need to be written to protect you and your affiliates

4. Possible come back if any affiliates include our content in spam emails or aggressive marketing techniques.

Some do this anyway, with independ' and networks


Any comments on the above would be appreciated, particularly the issue of whether so called super affiliates would consider working with an independent scheme, and how best to promote an independent scheme. It seems top me that some of the most successful schemes such as Amazon and Ashford run their own schemes so why not the small to middle sized companies if we are able, and prepared to spend the time to make it work.

Yeah they do, but how many staff do they have? These are additional costs.

I hope this has helped

Great forum by the way, learnt a lot in the last couple of days but probably have a long way to go

[999gi]

I much prefer independent schemes in the areas that fit really well with my sites and where the bigger business is.

This is mainly for two reasons
- higher commissions
- better commmunication

The networks do reduce the paperwork and provide better stats (such as the clicktracking) but if the volumes are there then if you can get an increase from say 10% to 12% commission this can easily make it worth it.

So from my persepective independent programs are the best for the superaffiliate type relationships and the networks best for the smaller business.

Your challenge is to get the right affiliates to find you. As has been said before each affiliate has there own niches and are amazing for some merchants and rubbish for another. Your best approach is to
1. Publish details on this forum
2. Have a competitetive offer or other unique selling point
3. Approach specific sites that could work well for you with a heavily personalised email. Just targeting 5 great fit sites and spending an hour understanding each will do so much more good than spending 10 hours searching for email addresses to send a template email to 100 semi-relevant sites (which probably include the 5 important one)

In particular I get a lot of such emails, maybe say telling me to promote their gadget site. From my perspective I already have some good realationships in place and dont see the need to go to lots of effort to add anyone else unless there is a new range of products or more money involved.

Most of the emails say "I really think our site would work well with yours" but dont say any more other than to explain the terms of the program. An email that actually says "I see you work with Firebox, Boysstuff etc. but heres exactly why I think adding us would benefit you" would get my attention.

It may sound lazy on my part and indeed it probably is, but as like most affiliates I work on my own I have to manage my time carefully. First question I ask is how much more money will this make me. Second question is how long will it take me. If its good value for my time then its worth it.

[MikeL]

Thanks for the excellent replies

There seems to be a general consensus that it if an independent scheme is set up and run correctly, offering good commissions to the affiliates then there is no reason it can't attract high levels of targeted traffic and sales.

Ecco mentioned the need to contact affiliates specialising in our niche market, which is jewellery/gifts, and 999gi provided a few useful pointers on how to start this process. Contacting these affiliates and advertising the scheme will be key. I will go ahead and set up the scheme for our site and get back to this forum in a few days to ask for comments and feedback.

[999gi]

Theres a serious lack of decent jewellery programs so you have a good starting point.

I run several gift sites and just cant seem to find anything that converts well, other than ASOS's small range.

If youve got a nice looking site and a good range of trendy items across the major jewellery categories at around the £20-£50 mark then I'll definitely be interested.

[1st Stop]

As said before being in the market at the right price is very important however,
I have been running my own affiliate software that has worked well for me but be carefull, dont just let any site carry your flag! a lot of them will not bring you quality traffic and in the affiliate game as far as being a merchant goes its quality NOT quantity!

[Ecco]

I think you'll get a lot of interest for jewellery if your site is a good one due to the lack, as 999gi says, of quality merchants in this area.

[Azam.net]

More admin. for affiliates if a merchant runs independently: yet another place to login to check stats., more late payments to chance up, new linking structures to get used to etc. Some affiliates belong to hundreds of affiliate programs and would be a nightmare to manage if they were not on networks.

[smn2]

Hi

I agree with 999gi

It may sound lazy on my part and indeed it probably is, but as like most affiliates I work on my own I have to manage my time carefully. First question I ask is how much more money will this make me. Second question is how long will it take me. If its good value for my time then its worth it.

And, it's a lot easier to give 'something a go' if it's part of a network
rather than independent.

However, a good program is a good program is a good program, and (I'm
sure that) the best affiliates will find you, if your program offers good
tools, good communication, and good sales (and something different - I
really do not get excited when another mobile phone merchants
announces its affiliate program, alas!)

Steve

[everydayholiday]

- about the set up cost: many networks will not charge you that if you negotiate. you can also ask them not to charge the monthly fees until your program is generating enough sales. i dont say all of them will do this , but at least one or two.

- what i dont like about independent programs is that they often work with sending out cheques instead of bank transfer. it makes it difficult for affiliates residing abroad. but i suppose that's only a small minority.

stef

[asr_guy]

...
- what i dont like about independent programs is that they often work with sending out cheques instead of bank transfer. it makes it difficult for affiliates residing abroad. but i suppose that's only a small minority.

stef

Most of the in-house affiliate software products support electronic payment. Some have mass payment via Paypal feature.

Cheers,
Peter