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  1. #1
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    November 17th, 2015
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    Lightbulb Starting an affiliate program. Have concerns and questions. Would appreciate opinions
    Hi everyone. I am a software developer. I have a downloadable product and website live and ready (has only been up for a number of months), and want to start a CPS affiliate program to get my product out there into the public eye. The software is for small-medium sized businesses, will operate on a subscription model, and would be suitable for many different types of businesses around the world (possibly individuals too). It can be single or multi-user and will be priced from around $130 USD per annum for a single user up to $1,100 USD per annum for 15 users, and it can scale higher. I am looking at giving affiliates 50% commission for the first five years of subscriptions for each customer - after any merchant and money transfer fees have been deducted. I’m also going to look into making the subscription payments monthly or quarterly.

    I’ve been reading forums and researching affiliate networks. The main themes/concerns I see repeated are:

    For affiliates:
    • They want to ensure they get paid.
    • They want the process to be easy.
    • They only want to operate through affiliate networks.
    • They only want to promote the things that are selling like hot-cakes.

    For Merchants:
    • The affiliate network’s fees in the form of commissions and ongoing fees – including monthly fees if you don’t do enough sales.
    • Being dropped by affiliate networks if your product doesn’t perform.
    • Fees for credit card chargebacks for fraudulent purchases – which I read, can happen a lot.

    I completely “get” the points above for affiliates. I was however thinking of bypassing affiliate networks and running my own affiliate program (using existing cloud-based or other software. Eg. iDevAffiliate) and dealing directly with affiliates. My questions are:

    1. Is there a class of affiliate out there who would work directly with a merchant and bypass the affiliate network? Has anyone seen this work?
    2. Would *you* take a chance with something new like this if you could download and try the product for yourself and thought you could sell it to your audience?
    3. My main concern is credit card chargebacks and their associated fees. From what I read they can totally eat up merchant income and possibly destroy a merchant – whether they’re from actually stolen credit card information, or from customers who buy your product and then dishonestly claim it was an unauthorised transaction and get their money back (I can remotely revoke product keys when this happens but I’ll still lose money). You end up paying back more than what you initially charged the customer. I also read chargebacks almost never go in the merchant’s favour. Does anyone know of merchants who successfully take payment by means other than credit cards? Eg. direct PayPal money transfers, etc.

    Additional Info
    • I feel the software is well-priced vs. competitors for the market being targeted – small-medium sized businesses, especially considering customers can install and try the software themselves and aren’t paying for consultants which would usually be the case for this kind of software.
    • The software can be downloaded and trialled before the user has to register, so there will be a time lag between customers downloading and then signing up.
    • The software has been submitted to the major download sites but I’ve found once it drops off the ‘new items’ list it becomes invisible among the masses of other software on those sites.
    • The software doesn’t come up in the first ten pages of Google search results when searched using relevant keywords.

    Cheers, and thanks for reading this and for any replies.

  2. #2
    OPM/Moderator Hectic GHC's Avatar
    Join Date
    July 13th, 2006
    Location
    Roswell, GA
    Posts
    2,643
    Affiliate marketing isn't for everyone. Sometimes you just have to look at other channels.
    Greg Hoffman
    Affiliate Marketing Advocate of the Year 2016; Best OPM/Agency - 2014; Best OPM/Agency, Five Years in a Row - ABestWeb.
    Visit Greg Hoffman Consulting

  3. #3
    Newbie
    Join Date
    November 25th, 2015
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    2
    You should use an affiliate network, it is way easier this way and saves you a lot money and time!

  4. #4
    OPM/Moderator Hectic GHC's Avatar
    Join Date
    July 13th, 2006
    Location
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    2,643
    Quote Originally Posted by ChristianH View Post
    You should use an affiliate network, it is way easier this way and saves you a lot money and time!
    This is why we can no longer have nice things here.
    Greg Hoffman
    Affiliate Marketing Advocate of the Year 2016; Best OPM/Agency - 2014; Best OPM/Agency, Five Years in a Row - ABestWeb.
    Visit Greg Hoffman Consulting

  5. #5
    OPM and Moderator Chuck Hamrick's Avatar
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    April 5th, 2005
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    Park City Utah
    Posts
    16,646
    Sounds like you have a ton of questions that you should be asking the networks. Are you successfully making sales on your own as you should view yourself as your largest affiliate. If not then I wouldn't recommend launching an affiliate program until you get your site conversion down.

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