Before launching an affiliate program
When you start your own affiliate program you want, might seem obvious, to make as much as possible out of it. While this is a fact, not everyone knows how to squeeze the most out of their program. In this article we will help you with the basics of working with affiliate programs.
“First of all, setting up an affiliate program is often reasonable when it comes to startup costs.”First and foremost, what is an affiliate program? Well, it's a business arrangement where one party agrees to pay the other party for a referral. Payment is only done if the referral leads to an actual sale (if you haven't agreed upon pay per lead of course). Various payment methods are pay-per-lead, pay-per-sale or pay-per-performance. You need to agree upon which one to apply with your affiliates in advance. You set the rules and they, if they want to be a part, follow them. Of course your relationship shouldn't be as harsh as it sounds here. Both sides should be happy!
There are a few reasons to why you should set up an affiliate business. First of all, setting up an affiliate program is often reasonable when it comes to startup costs. Options start from a few hundred dollars which should be considered a moderate price. As your affiliates only will get paid when their referrals lead to a sale you won't lose a dime in having affiliates. There's no actual cost to worry about concerning affiliates. Time and effort will be the biggest expenses.
Education isn't really an issue when it comes to affiliate marketing. There's no special certificate one must have in order to run an affiliate business. It's more about knowing the market and using your common sense. Of course it's not a bad idea to visit affiliate summits and other various seminars to grow in knowledge. As this is a competitive industry knowledge is a must if you want to get the upper hand to your competitors. Knowledge is power!
How much commission?
Since you have to pay commission to your affiliates you may or may not have to increase your products prices. Have a look at how much your competitors pay in commission on the same products you offer. Also make sure you offer at least the same cookie life as the others.
You should always be as generous as possible when it comes to commission and cookie life but it's not a bad idea to save the best deals for your super affiliates. This way they'll feel appreciated and they'll keep working for you. As a medium-sized business you should expect a 10% sales growth after having introduced your affiliate program. The growth could of course also be higher, depending on what segment you're working in.
What about tracking?
If you've joined an affiliate network you won't have to think twice about tracking since it's all taken care of for you. These networks will take either a percentage of what's being paid to your affiliates, or a flat monthly fee. If you on the other hand have chosen to do all the work for yourself there are some services to choose between. These are for example tracking software (a must!), hosted services or a shopping cart with affiliate features. All the affiliate payments are done by you. There are pros and cons to both networks as well as taking care of everything in-house. Learn these before choosing upon a system.
Never be tardy with payments as your affiliates are extremely important for your business and you don't want lose their trust. In some ways one could say that they are as much part of your business as you are yourself.
