If you decide to progress with affiliate marketing there’s a decision to be made as to whether you choose to join an affiliate network or run your own ‘in-house’ affiliate programme.
affiliate marketing network costs
Most companies choose to join an affiliate network to run their affiliate programme. These networks use technology that tracks click-throughs and sales through cookies and other techniques, and then reports to merchants and affiliates in real time.
Through joining affiliate networks merchants primarily benefit through having immediate access to a large number of potential affiliates, with new affiliate programmes often marketed to affiliates via the form of an email newsletter. Guidance and support from account managers is also often on hand, offering advice on the payouts you are offering and how to get the most from your affiliate programme.
Generally, the costs for joining an affiliate network as a merchant can be divided into two parts:
- Set Up Fees – an initial joining fee which usually start from around £500, with ongoing monthly fees sometimes charged as well. The set-up fee is charged to cover the cost of integrating your site into the network. This involves a number of tasks, including generating tracking codes, completing test sales, writing your description page, and emailing the launch of the your programme to affiliates.
- Percentage Fees – a percentage of the commission that you offer affiliates is paid to the affiliate network. The industry standard is 30%. For example, if you pay affiliates 10% of the price of every sale that they refer to your site then you’ll pay an additional 3% of the sale price to the affiliate network, resulting in a total cost of 13%.
running your own affiliate marketing programme
The alternative to using affiliate networks is to run own affiliate programme. In-house affiliate marketing programmes are relatively rare because of the added work involved and the various disadvantages that must be overcome.
Advantages of In-House Affiliate Marketing Programmes
The advantages of in-house affiliate marketing programmes are generally cost related – there are no percentage fees to pay the affiliate network, and the set up cost tends to be less. Software must be purchased, generally costing in the region of £250-£350.
Disadvantages of In-House Affiliate Marketing Programmes
The disadvantages of in-house affiliate marketing programmes are numerous. Independent affiliate programmes tend to suffer from a lack of credibility and awareness. Affiliates worry that the merchant will understate sales in order to reduce their payouts. This makes it harder to recruit affiliates and in addition to this the merchant has to work hard to raise awareness of their affiliate programme, often by approaching suitable websites directly. Affiliate networks take this workload away as they promote new programmes to their database of affiliates.
our affiliate marketing services
Dan Schmeer Marketing Services provide a range of Affiliate Marketing solutions to businesses and website owners. Contact us for more information.