Hi Mike L:
Advantages
1. Instant access to a pool of affiliates, with scheme advertised by affiliate network
Unless you have a good affiliate program, don't count on too many signing up. Also you will find if one affiliate has signed up to one network the chances are they would have signed up to them all. Nature of their business.
2. Independent management of sales records and payment of commissions through a network trusted by both affiliates and merchants.
Most of the ASP's have decent tracking and logging stats, some better then others.
3. Affiliates are able to manage wide number of programmes through one point of contact.
And the merchants dedicated affiliate manger,
4. Hosting of banners and buttons saving bandwidth on merchants site
nope not all.
5. Not sure on this one but it is possible that larger more experienced affiliates may only be interested in working through affiliate networks and will not look at independent schemes
No but Ecco has pointed this out.
Disadvantages
1. Initial set up fee £1000 to £3000 with monthly fee £200 and 30% rake off the affiliates commission
Affiliate future and paid on results don't have a set up fee and their override is less.
2. Possible barrier between merchant and affiliates, keen to promote business only through the network and if the merchant changes to a different network, possible leaving penalties and loss of affiliates.
see answer under question 1 in advantages.
3. Merchant less able to provide high commissions due to networks commission.
Good point.
You need to work out your profit margin and then leave a bit so you can give affiliates cash insentives for certain times of the year or your top performing affiliates.
4. Google
PR is driven by links, with an affiliate network affiliates link back to the networks site so there is no benefit of extra links for the merchants Google
PR. The opposite side of this argument is possibly that the merchant is also protected from links from bad affiliate sites which have been dropped by Google.
This is a personal preference choice.
Option 2 - Set up own independent scheme
Advantages
1. Reduced cost. I have been looking around for an affiliate management system based on PHP and MySQL, my current favourite is iDevAffiliate (
http://www.idevdirect.com/software/ ), have any of you guys any experience of this, any other suggestions would be welcomed. Cost $140, I guess would take around a day to set up and integrate into my site.
Are you including labour & nurturing time here?
2. Control over affiliate selection, content supplied, integration of click recording, and payment to affiliates.
You get this with most ASP's
3. Text, buttons, deep links would feed back directly into my site increasing Google
PR. Generation of the Product links could be integrated into my cart software.
4. Communication direct with affiliates with feedback on how to improve feed and conversion rates
You get this with most ASP's
5. Offer higher commissions to affiliates increasing popularity of scheme in affiliate community
You get this with some asp's too
Disadvantages
1. Effort required to set up, manage, and promote, the scheme. Organising efficient affiliate payment and managing interaction with affiliates of who 95% may not actually provide any sales according to some sources.
Show me an affiliate program that does not have the 80/20 rule.
20% are generating the sales.
2. The possibility that larger affiliates capable of delivering high volumes of targeted traffic will not consider the scheme as it is not on one of the big affiliate networks and has not been established long enough to build up trust within the community
if it's a good program they will join
3. The Legal T&C's will need to be created and checked as will the implementation to prevent errors or abuse.
Ts and Cs will need to be written to protect you and your affiliates
4. Possible come back if any affiliates include our content in spam emails or aggressive marketing techniques.
Some do this anyway, with independ' and networks
Any comments on the above would be appreciated, particularly the issue of whether so called super affiliates would consider working with an independent scheme, and how best to promote an independent scheme. It seems top me that some of the most successful schemes such as Amazon and Ashford run their own schemes so why not the small to middle sized companies if we are able, and prepared to spend the time to make it work.
Yeah they do, but how many staff do they have? These are additional costs.
I hope this has helped
Great forum by the way, learnt a lot in the last couple of days but probably have a long way to go