The other side

Questions about affiliates form the retailer's perspective

[willybfriendly]

I have been asked to do some research into setting up an affiliate program for the retail sales of an agricultural cooperative.

Unfortunately, most of the information I find is from the perspective of the affiliate member, not the company producing the product.

Any ideas on where I can look for information on setting up the back-end, what potential pitfalls there are, etc. I have done some searching through the archives, but information about this side of the equation is sparse.

Thanks.

[Shawn Collins]

I'd be happy to help you from a merchant's perspective. Feel free to ask any questions.

[edited by: rcjordan at 7:01 pm (utc) on Jan. 24, 2003]
[edit reason] no references to your stuff, please. [/edit]

[Big_Balou]

This is a question that has been running around for me as well.

For a retailer just thinking about setting up an aff program should I be looking more towards using one of the established programs or trying to do it on my own?

What are some of the ups and downs?

[Shawn Collins]

One big issue will be the resources you are able to allocate towards running the affiliate program.

One difference from using a network or affiliate solution provider, as opposed to running an independent program, is that you would have access to the affiliates of the network or affiliate solution provider.

However, if you have a dedicated affiliate manager, one of their goals should be to spend some time each day/week identifying potential affiliates and recruiting them.

Also, depending on the vendor you use to set up an affiliate program, you may need to issue your own affiliate commission checks.

Some upsides are that you can generally do everything a lot cheaper, and you will have more control over your affiliate interface, reporting, communications, etc.

[willybfriendly]

One specific issue that has been raised is that of tracking prouct returns. Now, from my perspective this seems easy enough to track. Orders would be assigned a trackng # which includes the affiliate's ID. Returns would simply be reflected on the account of the affiliate via this #. However, a person who claims to have experience setting up an affiliate program claims returns are very difficult to track. Who is right here?

I lean towards an in house program given the nature of the organization. Let me give a bit of background:

While growing, the past year's gross was slightly < $1 million[/li]

Most of the current sales from this org. are wholesale[/li]

There is a desire to increase retail sales in order to benefit from the increased margin[/li]

The product is "high end" and "tactile".[/li]

Being a cooperative, there is a ready base of qualified members that produce the raw material from which the finished goods are manufactured. The vast majority already have a web presence, though only a few are involved in ecommerce.[/li]

The co-op already has an ecommerce site[/li]

There are competing views as to the best course to take here. One view wants to contract out to someone like Commission Junction. The other is to keep it in house and not give up the percentage for administration. One side wants to open the affiliate program to all comers, the other to members of the co-op only. (There is a third view which is to just forget th whole idea as too much hassle.)

From my vantage the entire thing looks pretty straight forward, and could be kept in-house. The co-op will essentially be engaged in drop shipments. But again, I have not been involved in affiliate programs, and I do not find much information on the merchant end of the equation.

I would like to be pointed to resources. I would also like to hear about pitfalls of running an affiliate program and how to avoid them.

Thanks ahead of time

[hobbnet]

Big_Balou,
An easy solution to your problem would be to have both an in-house solution and go through a 3rd party network.

We find that we want as many affiliates in our in-house program as possible since it is cheaper for us and we have more control, as stated above.

But, many people affiliates have been burned by private affiliate programs not paying out. So, people who have been burned feel more comfortable going through a 3rd party network program like CJ. CJ offers a lot more security to affiliates than an unknown private affiliate program.

So, I'd say try to get all of your affiliates to join an in house program but some will refuse to do so, that is what the 3rd party network is for (plus the 3rd party network will give you much more exposure to webmasters).

[paladin]

Hi,
Up until a few months ago I used to work as an affiliate program manager.

Regarding the in house or third party program I would suggest doing it in house. It is just a matter of time to get the ones that are concerned to join in. Once your program starts to get into the various forums that should take care of most of them. Just keep in mind that there will always be a few that are hesitant to join.

You have to answer yourself: Is it worth the time, effort and loss of control in a third party solution for those few?

In my experience it is usually is not.