Growing your Affiliate Channel: external affiliate networks

You may have already got an idea that affiliate marketing is not quick or easy or offering immediate returns. It is about relationship building and coming to the market with the attractive product proposition and a competitive commercial deal.

I assume if you’ve read my previous posts about setting up your own affiliate programme and managing its first steps, you’ve done that part. It is safe to assume that in most cases (unless you are up and coming phenomenal product which is attracting an enormous amount of interest and getting snapped really quickly) you are getting a rather slow start.

There are reasons for it: it takes time to recruit new affiliates, generate interest to your programme, negotiate a special deal if needed and simply get affiliates to go live with your links, banners or product feed.

I personally hate the situation of sitting and waiting. So I would like to suggest something here. You can go and create a mirror of your programme at an affiliate network. You can think of the same commercial deal or different, but in a nutshell what you aim for is to get more reach – get more affiliates working with you and thus generate more sales.

This option is not cheap. I advise you shop around, pitch different networks (Affiliate Window, Rakuten, Webgains, Tradedoubler to name bigger names in the UK) and see what you can get for your business. Some networks are better with certain verticals: Rakuten is stronger in fashion, Webgains – in consumer electronics. Some of them will offer more competitive pricing and some not so much.

You need to bear in mind that apart from set up fee and monthly fees, you are expected to pay 25-30% so called override – their fee on top of the affiliate payout.

Say, you are to pay £300 monthly fee, that will stay no matter what. 50 affiliates generated 1 sales each with the average value of £150, that means they have generates sales of £7500. Say, your commission offer is 5%, so you are to pay out £375 to your affiliates and 30% of that is £112.5 – that will be paid to the network on top of your minimum fee.

Now the final bit – how to understand if it is worth it? Using the same example above you can then evaluate your own return first – say, you are earning £25 from each sale in average, so your profit will be £1625. If you subtract now all those above mentioned costs you are left with £837.5, just above 50% share of the pie. In my view it is already worth doing it, with a bit less sales volume your minimal fee will eat your profits, but as soon as your sales grow, your net profit will grow too. As I am underlining for everyone who contacts me for an advice – affiliate marketing is all about creating a win-win!

Finally, you may wonder what do you need to get started with an external affiliate network?

It will be a set of things that you’ve already done for your own programme – descriptions, recruitment page, programme page, links and banners. You should review your Terms and Conditions, think whether you will allow certain sites (cashback, coupons, retargeting) and which PPC activity will be permitted (if any at all). It is about replicating your own programme externally and getting a bit more reach and hopefully an increased return for your money. There would always be affiliates who will want to work directly (your direct product niche will probably be best fit) and via network where they can aggregate their commission from various retailers and manage this all easily.

Some people are hesitant to go external simply because they do not want to let go of 100% control, but it doesn’t need to be the case – if you think about commercial deal and Terms & Conditions well you are in control indeed. Yet you will get access to a few more segments of affiliates. Is it for you at this point of time – just sit and simulate some numbers – do they make sense?

Get in touch if you need any help or clarification.

Cheers

About The Author

Dimitri Safonov

Digital marketing, affiliate and performance marketing pro. Get in touch if you've got questions or need help with affiliate marketing.

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