|Successful Affiliate Programs?|
From the vendor / business owner perspective
I have a business that has been drop-shipping products for 4 years, and makes $1,500/month (profit) on $20,000 gross sales on 100K page views/month. My goal is to grow my business 4x over the next year.
I tried increasing my $100/month PPC budget with Google/Overture, but I blew through $8000 over 4 months with only a marginal increase in sales. I can't justify the cost per click with my thin margins.
So now, I want to try the affiliate program route.
I see alot of posts in this forum from people who place affiliate links on their web sites, however, does anybody have any information about the LEVEL of success that specific vendors like myself have experienced when implementing an affiliate program?
For example, does anybody know if any of the more obscure vendors on LinkShare have really benefited from buying in to the LinkShare service?
Testimonies, word of mouth, personal experience, examples, anything?
Positive or negative responses are welcome!
Boy I could write a book here. There are pros and cons to affiliate programs. You just have to weigh them against each other.
I am spending the money to redesign mine so I would say I have found more pros then cons. Although not to long ago I was ready to through in the towel. I had a supper affiliate hold me hostage and it was not pleasant. I could care less if I ever found another. I would rather have 10 moderate affiliates generating the 100k a month then one supper affiliate generating the same. It doesn’t hurt has much if one leaves.
My mistake was walking into it blindly. I didn’t do any research. I didn’t ask any questions. All I thought was. “I want an affiliate program”. I figured it would pretty much manage itself and I would just write the check at the end of the month. It is definitely not that easy. Affiliates are people who have thoughts and opinions and to some… this is serious stuff… it is their livelihood. Definitely bear that in mind.
I don’t know how you rank in the SE, but I have, for the most part, always ranked well. I felt some resentment the first time one of my affiliates beat me out in the rankings. But you get over it. They are promoting your products and you would rather have them in your corner then your competitors.
I have had one affiliate go off and start selling our services directly rather then work as an affiliate. She saw the potential and ran with it and I have done that as well. At one point I was promoting some of the services I provide through an affiliate program to test the potential before deciding if it was worth it.
There are a lot of other ways to advertise your products and services beyond AdWords, Overture, and affiliate programs that are a lot less intense. (Bidding wars are intense) I am actually doing all the above.
I would definitely read as much as you can and ask as many questions as you have. All in all, I think there is enormous potential in affiliate programs.
I really appreciate your thoughtful answer on the subject. I hope we get some input from other vendors/businesses as well. The more insight the better!
I'm going out of town for 3 days starting tomorrow, so I won't be posting any replies for a few days, but I'll be sure to check back!
Your affiliate program will only be successful if you put your time in. You'll need to go out and recruit affiliates who could earn you additional income now ( search for your products and see who your competitors are. Contact them and see if they'll sell your widgets). After you have these immediate earners, then you'll want to develop ways to sell more widgets via affiliates for the long term.
Signing up with a cj, linkshare etc. won't necessarily make you any more $$ unless you put your time in IMO.
I agree with what the others have said, btw.
But based on what you said in the 1st post, I don't think you should consider an affiliate program, or at least I wouldn't if I were in your shoes. Your margins are too slim IMHO. I don't know what the product is but a decent affiliate commission is around 10% and you arent even making 10.
Plus it sounds to me like your conversions are too low, if you blew through 8K in PPC without seeing much increase in sales. Affiliates may settle for a small commission on a hot seller but only if conversions are really good. If you are not converting at least 1 sale out of 100 clicks, then I don't think you are ready to consider an affiliate program.
I don't see how you could even justify the 5 - 10K it would cost to set up on one of the big networks, but maybe I misread your numbers. Aside from the set up cost, as eljefe said there is a huge time commitment and lots of knowledge that goes into running a successful program and why even try it unless you are certain you have the time, money and conversions to be absolutely certain.
Sorry, I'm usually "suzy sunshine" and the one talking people into programs, but I just don't see it being a good move for you based on the info above.
Best of Luck! Linda
[edited by: eljefe3 at 1:26 am (utc) on Sep. 13, 2004]
>> I would rather have 10 moderate affiliates generating the 100k a month then one supper affiliate generating the same.
It dont happen in the real world ...Its always the 80/20 rule!
I agree with the comments on margins.
Your margins have to support commissions - before this can work in your benefit.
"It dont happen in the real world ...Its always the 80/20 rule!"
Actually in the affiliate marketing world it's more like the 95/5 rule especially if you are on the big networks and don't do any targeted pro-active recruiting or screening.