The cost of joining an affiliate network is usually very high, and almost all of them now have a monthly fee too, which makes it look quite unattractive if you're new to affiliate marketing.
Alternatively adding an affiliate campaign plugin to your website is usually cheap and easy.
So what do you actually get for your money when using an affiliate network? And is it worth it?
The big obvious advantage to using an affiliate network is the ready supply of affiliates all eager to join your campaign and start sending sales to your site. With running your own campaign and software, you'll have to go out and find your own affiliates one by one.
That is very time consuming, especially if you have to explain the entire concept of affiliate marketing to people first. In contrast, the members of the major affiliate networks are already familiar with affiliate marketing. Most of them are also very experienced at earning commissions through affiliate marketing. They know that just putting a link on their site isn't going to earn them, or you, very much at all.
But can't you target these experienced affiliates yourself without joining a network?
Yes, you can, if you know where or who they are.
Reputation and Payment
But, you now need to look at things from their point of view. When they join an affiliate campaign through one of the major networks, their contract is with the network, not you. These networks have very good credit ratings so they know they are going to get paid. However, joining your independent campaign doesn't provide these guarantees. Yes, they may join your campaign, but they're going to be hesitant to promote you too hard until you've developed a good payment reputation.
There have been too many disreputable companies creating campaigns that never paid and it's been a known problem in the industry since the start of online affiliate marketing.
Along with this, there is the impression of being cheap. If you couldn't afford to join an affiliate network, that suggests that you might not have the cashflow to pay your commissions either.
The other critical factor is the product feeds. Each of the major affiliate networks has their own unified product feed format (except one which seems to be technologically incompetent - but that's another story). This means that every merchant on each network is providing product feeds in exactly the same format.
A lot of the best affiliates rely on product feeds to promote your products individually. Adding another merchant using a standardised product feed is usually an very simple process for them, using just a few clicks. But adding an independent merchant with their own completely unique product feed format will usually require bespoke development or configuration. It's a much bigger task for them.
In short, joining affiliate campaigns through a major network is much more attractive to affiliates.
Joining an affiliate network will almost always generate more affiliates and more sales than running your own campaign.
But, the introduction of monthly fees has not only increased the costs, but also made it less cost effective. It means that you now have regular costs which are no longer directly attributable to sales. There is a risk which never existed and quite frankly, I think this is disgusting. You are not getting anything extra for this monthly fee, the networks are just making more money for doing nothing.
If you have any negotiating power when creating your campaign through an affiliate network, your focus should be to reduce these monthly costs rather than to try to reduce commissions or the setup/joining fee.
OpenGlobal E-commerce have affiliate management packages which stay true to the affiliate philosophy so we don't charge our own monthly fee on top of the affiliate networks, we only charge a fee on sales. So we only make money when you make money.
To find out more about creating and managing an effective affiliate marketing campaign, contact us today on 0845 269 9624.