we are looking to start an affiliate program for widgets (on the lines of proabably acme widgets, etc.) However, we do not know whether we should develop an in-house program or should hire a third party for the same such as CJ/Linkshare. if we go for a third party, we have following benefits:
-credibilty -access to a big pool of affiliates (low affiliate recruitment costs) -effective tracking of traffic/conversions
[edited by: jcoronella at 12:47 am (utc) on Aug. 30, 2005] [edit reason] removed specifics / competitor [/edit]
Some things to think about with a network: -you pay much higher monthly fees -you most likely will pay a higher startup fee -you won't "own" your affiliates
With an in-house program: -Software is typically cheaper -You probably will need a dedicated person to manage, recruit, and grow the program -You have direct access to your affiliate's info (email, phone, addresses) for marketing/retention -More flexbility to customize your program
I think it comes down to money and resources (doesn't everything). With a network, you can pay them to do everything for you (but you'll pay them alot). With inhouse, your fees "should" be lower, but you'll need a dedicated AM. You'll have to weigh the costs/benefits of each. Some companies eventually end up doing both.
thank you jeep. however, we feel that even to start off for the affiliates to join our network (in case we go for an in-house program)will be a tough task. What i mean is, the recruitment of affiliates. Hence linking with a big affiliate network in the starting should be beneficial. what do you say?
You are correct, recruiting affiliates is definitely a big challenge w/ an in-house program (esp. if you're not a well-known brand or heavily trafficked site). To mitigate your risk, perhaps you start with one of the smaller networks that has lower start-up fees, shorter contract agreements, and takes less of your pie on a monthly basis?
Keep in mind that an affiliate network most likely will not be a "set it and forget it" solution. If you really want to grow your program, you're going to have to promote it on your side as well and constantly keep your eyes open for new prospects. Sure the network will help, but I wouldn't count on it to solve ALL of your problems.