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  1. #1
    Newbie
    Join Date
    February 24th, 2007
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    14
    Network of sites making $15k a day, and NO APs!
    Hi everyone

    I'm new here. I'm no stranger to the internet marketing world, but I've never been in this type of position.

    I've inherited this network of sites that is doing quite well. Two are sites that sell lingerie and exotic clothing for a large online retailer. These sites are generating $6K a day in sales with about a 10% return rate.

    The third site is of adult nature, and is basically the "ebay" for adult dvds. As of this minute it has 229,332 active listings. It was nominated for the 2007 XBiz award for online retailer of the year. It is doing aout $8k a day.

    These sites either have no affiliate program or a very lame one.

    I want to change that, and I think these sites would be attractive to affiliate marketers.

    The lingerie sites are authorized dealers of major brands like Allure Leather, Hustler Lingeire, Leg Avenue, etc. We buy volume and inventory most of the product ourselves. Therefore we offer some of the most competitive pricing. I can find an Allure Leather corset on ebay right now bidded higher than our retail price. The Flag website has a 3 location brick and mortar presence in a major southeast city.

    Should I try to develop something on my own, or just sign up for shareasale or something like that? We have a database of 35,000 products ready to go. The stores are using x-cart, and only have a froogle feed now. I am having a bunch of modules added to increase that to other sites.

    What kind of program works best for affiliate marketers on this kind of product? I'd love to get some input from a seasoned expert.

    As for the adult dvd trading site, I was thinking about some kind of life time residuals program.. but that seems it would be difficult to track. I assume this is a mainstream board, so if I need to ask elsewhere let me know.

    Thanks

    David.

  2. #2
    Kung Fu Master Eathan's Avatar
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    January 18th, 2005
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    1,833
    If I had the resources, I'd build independent every time.

    No offense to Shareasale or any other network, but being able to build something that meets the exact needs of a program and that program's affiliates, trumps the value any network might bring to the table, be it established affiliate base, trusted third party, functional software, etc.

    Few may agree, but I can only speak from what I know. In my experience, having a dedicated development staff building exactly what you architect is superior to anything a network can offer. Then again, I did say IF I had the resources...
    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

  3. #3
    Don't under-estimate the expertise that a network can offer you in terms of advice, fraud prevention, revenue control, affiliate management, etc.

    It's not ALL about software!

  4. #4
    Outsourced Program Manager Rick - Bitcom's Avatar
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    October 3rd, 2005
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    I agree with Eathan but put the emphasis on "resources"...you will need a lot. Sounds like your program could be pretty large so it could be 2-3 fulltime positions worth of responsibilites. But you sure will have the control and power to make it right and you could keep your costs down so you can offer a nice commission...still the number one program factor for affiliates.

    Good luck...

  5. #5
    Full Member id2k's Avatar
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    August 22nd, 2005
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    276
    i dont agree with eathan to build own software..i would rather utilize the resources i have to market my site through various medium. also a retail store owners expertise and goal is to sell and i think these kind of tech things if outsourced are better..it gives you enough time to focus on your main activity which is sales and store managment..also a affiliate netowrk gives you more visibilty in terms of affiliates...

  6. #6
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    January 18th, 2005
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    Eathan wrote: > "Don't under-estimate the expertise that a network can offer you in terms of advice, fraud prevention, revenue control, affiliate management, etc." <

    • Advice: Most affiliate networks aren't going to give you advice unless you pay extra for it, and I'm not sure I'd trust the advice.
    • Fraud Prevention: Definitely an advantage for any network, though some are less helpful than others. Bottom line: if a bogus affiliate is engaging in tactics to steal money from merchants, it's more likely to be caught and ended earlier if you're in a network. (Some networks, like ShareASale, are also vigilant in blocking "parasite" affiliates.)
    • Revenue control: I don't know what this means.
    • Affiliate Management: again, this would be extra-cost at any network.


    I think the primary benefit of working with a network is the "trust" factor that comes from working with an intermediary whom affiliates trust. Given the large number of "scam" affiliate programs and over-optimistic affiliate programs that defaulted on payment obligations, legitimate affiliates are understandably wary of new merchants. If you work with an affiliate network, the affiliates recognize that you're willing to make an investment (modest for SAS or AvantLink, greater for CJ or LS, insignificant for smaller networks). In the case of SAS, the network also collects and holds affiliate earnings "up front" so merchants can't collect money for affiliate-driven sales and then default on the commissions.

    Another key advantage of a "network" is that you don't need to spend as much time on "creating and managing" software and databases, and creating reports for affiliates. If you use an affiliate network, you don't need to spend time on "link generating" scripts and such, although it is never wise to rely exclusively on the third-party network's data.

    The primary advantages of an in-house or direct affiliate program are:
    • Permanance of Links: If you end your participation in a network for any reason, or if the network ceases operations, then all your affiliates' links stop working. Your direct program links don't (though if you cease paying or cancel your program, most affiliates will remove links).
    • More certainty of link popularity: Direct links should always be recognized by Google et al. as counting toward your site's inbound-link popularity. Many (most?) network links do not count.
    • Reduced risk of "link blocking" and "ad blocking" by Norton/McAfee etc. (which are triggered by links that use LS or CJ redirect URLs).
    • Great Commission Flexibility: A network will charge fees that reduce the amount of commissions you can pay. For example, ShareASale charges 20% (so that if you pay affiliates 15% then you must pay SAS another 3%, for a total payout of 18% on each transaction). With a direct program, you can theoretically pay more to the affiliate.
    • Control and Proprietary Data: Many of us just like having more control over things, including the ability to modify reports and link-generation capabilities. Some folks are also nervous whenever an intermediary holds important proprietary data.


    Keep in mind that there is not a "black line" separating network from in-house: if you use the Kowabunga/MyAP solution (for example), you get many benefits of an in-house program together with some benefits of a network.

    Until recently, I was a strong proponent of "in-house only" for affiliate programs, but I now believe that it is wiser to offer both options: at least one affiliate network (with ShareASale being the top contender), plus an in-house program for larger affiliates, and possibly participation in other third-party networks if necessary to bring in additional affiliates. (Any time you offer more than one option, you must take strong steps to insure that your system doesn't credit a single transaction to multiple affiliates.)

    I will absolutely echo the comment about staffing: nearly all successful affiliate programs have multiple full-time staff people running them (usually in-house staff, but sometimes "outsourced program managers" or "network staff").

  7. #7
    Kung Fu Master Eathan's Avatar
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    January 18th, 2005
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    Mark, just a heads up, but it looks like you credited me with something David said.
    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

  8. #8
    Newbie
    Join Date
    February 24th, 2007
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    14
    Thank you so much for these thoughtful responses.

    Eventually the goal would be to have it run inhouse, but to start.. I think SAS would be the way for us to go. Considering these sites have never had any affiliate marketing, I think testing out a network would be best before developing a new department that requires new software, new employees, etc.

    I agree with Mark's view on networks being able to bridge the 'trust' gap. I was an affiliate marketer for Rx's back in the day, and I know what it feels like to get burned.

    The commissions thing makes perfect sense, but considering the low payouts I have seen from the other big lingerie site mentioned here... I know I can offer more than 10% even considering SAS's fee. We buy direct and inventory most of the product ourselves. This affords us better pricing from manufacturers, than the average internet reseller buying everything from the same distributor.

    I'm glad to have found this board. I will be posting updates as things progress.

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