Mistakes to Avoid When Starting Your Affiliate Program
When running an online shop, you should invest some time into the creation of a good marketing concept. Marketing doesn't always mean running ads or placing advertisement blocks on different websites. A good idea would be starting an affiliate program. However, this can lead to a couple of tripwires. Today I'll help you avoid the most fatal mistakes.
What's An Affiliate Program?
An affiliate program is like a snowball system. You start the program for your products, and other people advertise them. They integrate your ads on their websites. Each time an advertising medium results in a purchase, the affiliates earn a small share of the sale. You can think of it as a small army of vendors that you don't need to pay wages to; only a small share of each sale via your advertising media. By using cookies, the affiliate program finds out which vendor the recommendation came from, and then it assigns the sale to said affiliate.The Salary System
You can choose your own salary system for your affiliates, and you are not bound to strict standards. The following versions are common:- Cost per Sale (percentual salary for each purchase in the online shop)
- Cost per Lead (fixed salary, for example for entered contracts, ordered catalogs, or newsletter signups)
- Cost per Click (fixed salary per click on the advertisement material)
1 - Choosing the Right Affiliate Programs
The most important decision that has to be made when starting an affiliate program is choosing the right platform for you. Here, especially beginners tend to make the wrong choice. The biggest mistake you can make is choosing a self-hosted variant. A lot of beginners would choose a self-hosted affiliate tracking and management software because it is cheaper. Cheaper is not always better, though. Especially not when it comes to money. Third party affiliate management systems are always more advantageous for you, so you should always pick that type of platform.2 - A Really Good Tracking System
An affiliate program stands or falls with the tracking system. It assigns sales to the respective affiliates. If something goes wrong there, it may cost you a lot of money. Most self-hosted affiliate management software comes in the shape of plugins that are executed on your server. In reality, however, your server is not optimized for the task of exactly tracking clicks. A simple mistake can lead to you having to pay double the provisions for each sale. Obviously, your affiliates will like it a lot, as they will make a lot of money off you. This should be enough reason for you to always use a third party affiliate tracking platform. Of course, this will cost you some money. But you'll be sure that your tracking is working, and that you won't have to pay more than necessary.3 - Better Fraud Detection
Most self-hosted affiliate software do not have built-in fraud detection. Some claim to, but you should always check the fine print thoroughly, and find out how it works (it won't). It is really difficult to realize. On the contrary, a professional platform deals with nothing but the perfect provision of a fully functional system. All clicks and references are regularly supervised. On top of that, professional platforms run an entire department that deals with attempted fraud. When something's wrong, you'll immediately receive an email. Suspicious activities and affiliates won't be able to hide for long. You won't lose money with a professional platform. This is also the reason why some of the world's largest companies rely on affiliate tracking platforms, instead of pushing the construction of an in-house software.4 - Automatic Payment
As an entrepreneur, time is money. You should not waste your time manually paying your affiliates. Spend your time on the truly important things instead. Increasing your turnover, for example. Professional affiliate management platforms automatically take care of all national and international payments. Your affiliates will always be paid on time, without you having to worry about it. This makes your affiliates happy and wins you time.5 - Less Accounting Expense
Have you already sold worldwide? The regulations are really bad and complicated. They get even worse when choosing a self-hosted variant of an affiliate program. Your accounting will inflate enormously. Having to deal with that is not a gift. If you have to take care of the accounting yourself, you'll spend hours trying to find the right regulations. You're an entrepreneur and not an accountant. You shouldn't have to deal with it. You should reel in turnover, and let the professionals take care of the accounting expense. All this effort is not worth it, only to save a neglectable fee for using an established affiliate marketing platform.6 - It's Easier For Your Affiliates
An already existing network is much easier to handle for your affiliates. Keep in mind that these people don't only advertise your goods or products, but other interesting things as well. With a professional platform, your partners only need to log in once to be able to manage all of their programs. Additionally, a professional platform helps to build trust with your potential affiliates. They will know that their payments will arrive on time. Trust is very important in this branch, as not only the operators of an affiliate program but also the affiliates are often scammed. Thus, give them the safety of an established platform with a good reputation.7 - The Network Effect
When entering a large affiliate network, your business will receive more attention than it would strive for an own solution. This will also help you recruit more partners, and build a large "army" of vendors. By the way, some companies are members of multiple affiliate networks, to generate maximum attention.8 - Germany's Largest Affiliate Platforms
In Germany, there are a couple of professional affiliate platforms. The largest two most certainly are the following:- Affilinet - said to be partnered with more than 3.500 businesses
- Zanox - over 4.300 companies are working with Zanox (according to Zanox)
Where is a good starting point to look for affiliate schemes and products to sell please?
I have been thinking about trying out setting up an affiliate system. Great tips!
Hi Andreas,
Very simple — when you make a sale, you want to know WHERE the sale came from. This enables you to know which pages are converting well so you can grow and scale that campaign.
Best wishes
Masha