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  1. #1
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    Network VS Inhouse?
    Hi all,

    We are planning on revamping our affiliate program within the near future.

    We sell cell phones and plans online, and will probably pay out on a per sale basis.

    My question to everyone on this list:

    Is it better to use a network (be it CJ, SAS, LS, etc) or to do it in house?

    From our perspective, all our shopping cart and sales software is in house, so it wouldn't be so hard to add the appropriate tracking code for Affiliates, and we could offer more to affiliates, as we wouldn't have to pay a commission to the networks..

    That being said, are affiliates more trusting of a company that uses a network (I know on SAS people prefer merchants with autodeposit, for example)? Obviously we're interested in getting affiliates who can deliver, so might it be worthwhile to use a network?

    Any and all input, from merchants, affiliates, and managers, would be most appreciated!

    Thanks!
    Oziman

  2. #2
    Analytics Dude Kevin's Avatar
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    There are many answers to this question... first two coming to mind are your budget for the program and how quickly you want to grow it...
    Kevin Webster
    twitter: levelanalytics

    Kayak Fishing
    Web Analytics and Affiliate Marketing

  3. #3
    Newbie Lonny's Avatar
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    In my opinion you should do both, advanced in house program for super affiliates an dthe network interface for the smaller affiliates who are used to cj/sas etc.

  4. #4
    Affiliate Manager Alan Hamilton's Avatar
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    Though you are new to the forum and so this is the first time that you have asked it, this question comes up every two months or so. You can do a search to find prior threads in which a variety of answers are offered by a variety of people.

    Long and short.

    1. what Noth said
    2. networks tend to be more trusted - at least until you have been around for a while and established a trust factor through longevity.

    Good luck with your research and your program.

    Alan
    Join the Spicy Aprons Affiliate program on ShareASale Visit us on Facebook www.facebook.com/spicyaprons Follow us on Twitter @Spicyaprons

  5. #5
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    Merchant input?
    First, thanks for everyone's answers.

    The company itself has been around for a while and has a good market share within the online cell phone community.

    Other issues that tend to come up, is that while many orders go through, 60% are rejected due to fraud and credit issues (Mobile carriers require a credit check on each customer...)..

    I've seen some of the other threads (I try to RTFM ), but I can't say that they've covered it so in depth.

    Anyway, if merchants who have been in this position could add their piece, I'd be happy to listen.

  6. #6
    ABW Ambassador
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    DO BOTH Network & indie programs.

    Affiliates who work the activation niche know that the fraud is high and the carriers contracts with you as the merchant let them charge you back if the contract with the user gets terminated within a certain time - like 6 months. You need to recruit seasoned affiliates.

  7. #7
    Mama in Charge Anne's Avatar
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    I prefer network programs. It is difficult to babysit in house, and by that I mean.... where are the checks? Not all indy programs are good about consistently paying. I have made exceptions for amazing programs ( ifrogz I ran indy and of course birthday express), but it is few and far between that I run indy programs. Just my opinion. I am sure there are those who won't work with networks either, so I guess the "both" option may be a good one for you.

  8. #8
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    I'd echo what everyone else seems to be saying: especially in a field like cell-phones, where there have been many affiliate burned by companies that didn't pay, it makes sense to use a network that affiliates trust. However, for larger affiliates, it makes sense to have a direct program, where you eliminate the network fee and can thus pay a higher percentage.

    I must admit some curiosity about the 60% reversal rate -- can't you query the provider and have them validate that the credit score is acceptable in "real time" during the sign-up process? I know they do this in the cell-phone stores. (This is separate from any fraud issues, of course.)

    I wonder if the high reversal rate is because the same people who get rejected at merchant A keep trying again and again at other merchants, not realizing that the actual carrier is going to keep rejecting them. Again, if there is some way to "query" the carrier to determine a customer's "prior rejection" status, it would be preferable to completing a transaction and then reversing it.

    The 60% average reversal rate is certainly going to be a concern for affiliates, but I think that if you are very "up-front" about it, and if you provide reversal data promptly, then it should not be a deal-killer. However, if you are using a network, it may require substantial staff time to implement the reversals, and to communicate with affiliates about them (or to set up an automated system to handle this).

    A key issue may be the length of time it takes for all transactions to be final (e.g. how long after a transaction occurs might it be reversed?). If you are constantly reversing transactions that are 2-3 weeks old (or longer), this is going to make any "EPC" figures completely misleading, and both affiliates and the network will take notice.

    Finally, if you do implement both an in-house and a network program, make sure you have a system in place so that the same transaction is not improperly reported and credited to two affiliates. For example, someone might go to web site A and do research, and click to visit your site, and then they might visit site B and do more research, and click to visit your site again, and then complete the transaction. You must have a clear policy about which click "counts" for commission purposes, and you must have technology in place to insure that the transaction isn't credited to both affiliates through the two separate tracking and reporting systems.

  9. #9
    Affiliate Manager Alan Hamilton's Avatar
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    The 60% average reversal rate is certainly going to be a concern for affiliates, but I think that if you are very "up-front" about it, and if you provide reversal data promptly, then it should not be a deal-killer. However, if you are using a network, it may require substantial staff time to implement the reversals, and to communicate with affiliates about them (or to set up an automated system to handle this).

    If 60% is typical reversal rate for cell phones, I would assume that you have this factored into the commission percentage in order to offset some of the reversal commissions lost. Either way I agree with the logic of having both network and indy. If you have the margin to play with you can always offset a high reversal rate with a higher commission.

    Alan
    Join the Spicy Aprons Affiliate program on ShareASale Visit us on Facebook www.facebook.com/spicyaprons Follow us on Twitter @Spicyaprons

  10. #10
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    The problems with "activations" can include NO SERVICE where the carrier THINKS they have serve.

    Most sites work off of zip codes.
    That doesn't mean that there is coverage at every point in a zip code.

    Credit is approved and black lists checked and the phone ships.
    Many are returned when the customer finds they can't get coverage at home or work etc.

  11. #11
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    Sorry for the confusion.

    Often orders will come back as Ordered and then a note with that the credit was denied.. Checking is generally done in Real Time or Almost Real Time. Often we can come back to the prospective buyer with alternate deals or certain conditions if their credit is not so great.

    We want to make sure that when we do go live we are upfront and honest with anybody who chooses to work with us.. It's a policy that we as a company take seriously, whether with customers or affiliates

    Chargebacks can and will show up 2 weeks later, but I imagine any affiliate understands that..

    Thanks for everybody's input so far.

  12. #12
    Affiliate Manager cbsturg's Avatar
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    As an affiliate, I would echo the general sentiment already shared. I typically won't sign up for an indy program unless I know the company by reputation, or have dealt with them in the past.

    As a side note, I have worked with some merchants that offered a LOWER payout through their independent programs than with CJ, LS, SAS, etc. When I contacted them about paying me more money to give me an incentive not to use an outside tracking program, I was surprised to get a negative response. It still doesn't make sense to me. Naturally I signed up through the respective tracking company and my sales cost them more money than if they had decided to come to terms with me.

    That's a business practice I certainly don't recommend.

  13. #13
    Newbie TooLegitToQuit's Avatar
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    I feel like indy programs work great for super niche markets. The best affiliates and most complimentary sites for very specific products are probably going to be recruited anyways. Until I spoke with them, most of these affiliates would not have even considered running any affiliate program. For these niche programs I have worked on, the exposure in networks has never done them much good. I suppose the cell phone industry is general enough to benefit from both an indy program and networks.

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