Question

Topic: E-Marketing

Affiliate Networks And The Costs

Posted by Anonymous on 2/7/2014 at 11:46 PM ET 125 Points
Hi Guys,
We are a technology company based in Beijing, China and our affiliate program commission rate is around 5-10%. We are interested in getting affiliates from all over the world, so geolocation is not much of a problem. I've conducted some research and found a few top players that I think I would consider joining for our affiliate program: Commission Junction, ClickBank and LinkShare.

Since I'm quite new to this here are a few matters that I'm not clear about:

1. Start-up costs:
Are those comparably similar between different affiliate networks? I found out people saying it's usually a charge of around $5,000. Since it seems a little pricey, from your experience, is there any chance to negotiate the set-up costs or are those strictly fixed? What I mean is whether you think different companies may receive different offers/discounts depending on e.x. the company's size/popularity?

2. Having said that, are there different deals on those networks? I would guess there might be different 'packages' that one needs to choose from, or is it all based on one simple deal?

3. Affiliate networks' revenue model.
Again, I heard it's commonly around 30% of what I would pay to the affiliate.

4. Does anyone have experience with any of those above mentioned affiliate networks that I consider joining? Can you advise me which one is 'the best' to choose? I know it's hard to pin down since a lot will also depend on how much time I'm prepared to invest in further process. Anyway, I would really appreciate any professional tips/opinion on this subject.
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RESPONSES

  • Posted on 2/8/2014 at 7:53 AM Accepted
    Your question as i understand it is one that is best asked directly to the networks you are interested in. Every company has its own way of running things. Some give discounts some promote its service at a cheaper price to gain new customers and yes some negotiate prices, service providers tend to do this more. So to get back on topic i think you should refer to the service providers listed in your post on weather or not they will negotiate a price with you. A use thing to do if you are considering negotiating a price is to always be prepared research other companies that offer similar or the same server and get there rates/fees make a list with 2-5 companies that have the same/similar services but with cheaper prices. This will help point out the fact to the sales person that you can receive the same services for cheaper convincing him to drop prices. It will also show him your a educated buyer and have done you research. This proves you are passionate about the service and will be a loyal and long term customer as well. There are other skills that can help with negotiating that can be found here www.wikihow.com/negotiate

    Sometimes promoting your company the same way you always have with programs like google adwords and sense, blogs, forums, eBay, amazon, search engine listings, email marketing campaigns, and word of mouth can be just as good as any of these affiliate marketing programs and they can be no extra expense. All you have to do is make a little link at the bottom of all your ads/posts/emails (or what ever you use) that says something like "Try Our Top Paying Affiliate Program" Create the link to point to a appropriate page. Also put a link at the bottom of all you pages of your current website. Perhaps create a whole separate website for affiliate program and market that. This can be time consuming to get the results of top rated affiliates so hiring some one if its in your budget may be wise.

    I am not sure if this is anything like what you where wanting but hope this helps answer you question.
    you say your a technology company ?? You may want to check out www.akaeasy.com
  • Posted by Gary Bloomer on 2/8/2014 at 9:55 AM Accepted
    Commission Junction, ClickBank, and LinkShare all offer varying terms of service (TOS) and if you're going to sell through their platforms you play by their rules. To attract the most effective affiliates for your products (whatever those products may be) you may want to crank your commission payments way beyond the 10 percent level.

    On ClickBank commission payments to affiliates of 75 percent are not uncommon and sadly, again fro ClickBank, the primary issue for any company wanting to be seen as worthwhile is page visibility Your products need to be in the top 10 listing and sadly for you, offering commissions of 5 and 10 percent won't put you in that space.

    So, offer affiliates more in terms of returns. make their promotion of your products super easy and a joyful experience and word will get around that you pay well, that you pay on time and on a recurring basis (if you're offering SaaS), and that you make affiliate's lives easier. Treat affiliates like gold and they'll love you back.
  • Posted on 2/9/2014 at 9:22 PM Author
    @akbusiness16:
    Thank you for your response and useful tips! I will definitely prepare for negotiating with affiliate networks as you suggested. The problem is it really takes time and all the info on their official pages is focused on getting publishers with very little info for advertisers for some reason. Hence, it will take much more time that I anticipated.

    I have tried some of the other ideas that you pointed out for getting referrals – contacting people, email marketing campaigns, word of mouth, posting about the program under appropriate forum threads etc. They didn’t prove very effective. Out of 20-30 people contacted, I may get only 1 affiliate. It is getting really frustrating. I added a link at the bottom of my emails, thanks for the tip! However, a link promoting an affiliate program on forums/blogs can get me banned pretty easily..
    I guess I need to keep working on it instead of getting impatient.

    @Gary. Thank you for your response, Gary. I’m a little worried about the commission you mentioned. I read somewhere that it is better to have a commission fixed at lower levels and then increase it. I thought 10% was quite well-fixed. What would you suggest to get a better position in the affiliate listings?
  • Posted by Moriarty on 2/10/2014 at 3:53 PM Accepted
    How about we turn all this around?

    You need affiliates. How about advertising for them directly? After all, if you set up an automatic system for them whereby their orders come through their channel they get a slice.

    You can advertise for them on Facebook - their new algorithm will get you them at a reasonable cost. More importantly, you'll get feedback as to who visited, and more importantly who signed up. Facebook do all the grunt work for you these days when it comes to refining your niche.

    You can try advertising 10%, 15% and 25%* to see how many respond - it does depend a lot on what your product's worth and how long it takes for a purchaser to decide they want it.

    Following on from AK business' idea - split your email list in 4 parts and offer a 10% - 25% commission and see how many responses you get. You should find that there's a "leap" from an ordinary response to a good response. That's your target commission.

    *Just make sure it's viable!
  • Posted on 2/11/2014 at 9:46 PM Author
    @Moriarty. Thanks! I was thinking of contacting professional affiliates first. I guess I will try that before using services of affiliate network. The thing is I would need to target the right niche of mobile industry/tech..
  • Posted by Moriarty on 2/12/2014 at 3:56 AM Accepted
    When you say " The thing is I would need to target the right niche of mobile industry/tech.." - what you need are people who have a real ear for human psychology. I've seen what tech guys do to websites, and even if the affiliate doesn't know so much about your product, they can refer back to your expertise. What they do know is how to pull heart-strings.

    And pulling heart-strings is what makes a sale.
  • Posted on 2/12/2014 at 8:53 PM Author
    Well put Moriarty! That's something to keep in mind. Thank you!
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