Whose Affiliates Are They Anyway?
The Controversy Over Building Your Affiliate Network

The competition for affiliates is heating up. Either you create your own network and administer the customer service and software yourself, or you outsource to a service bureau like LinkShare, Commission Junction, or Be Free.

The real trick is knowing that all your work will come back to you. Paying money so someone else owns your salespeople might not be the best solution..

Everyone seems to want thousands of affiliates; they will pay to get them. Yet up to half of these affiliates never do anything. In many networks, they are bought and sold to every merchant that comes through the door.

Get into a system that allows you to keep and control your own affiliate partners. Don't spend time and money building a complete network so your competitors and other merchants can have them too. This is a drawback of service bureaus, unless your transaction volume suffices to make this inconsequential. Your affiliates are offered to every other merchants in some cases.

Why join a service bureau where everybody knows who my affiliates are? Why give my customers away? Your goal is to gain affiliate lockout, so be careful of who owns your affiliates.

The service bureau industry is not a rip-off in any way shape or form; if you have deep enough pockets to allow someone else to manage your whole network, then the whole issue is moot. Big companies who regularly outsource things like payroll and generate thousands of transactions benefit from such a network. They do handle many of the headaches as well.

It is a question that you should think of as you negotiate, not after the fact. At least make sure you have a database of affiliate names who get to know you through your site.

For me, I want to keep my affiliates close and not have my training and loyalty interrupted by other companies. Now I know my affiliates must affiliate with other programs; that is not the issue. Your affiliates should feel that they are not being bought and sold. This could become a big issue soon, as more people seek to set up affiliate networks.

Consider the following tidbits I ran across this month:

1. The 97% - 3% Rule?: One major affiliate network has thousands of affiliates, but only 10 that generate any sort of sales. Up to 50% of their affiliates never act. Is this getting repetitive?

2. Our Insider's Guide and Winning the Affiliate Game affiliate programs are the only ones actively offering training to affiliates, as far as I know. If you want to set people up to succeed, create an automated, follow-up training system that gets them going quickly. When people sign up for our program, we try to show them what works and encourage them to act. Most people send them to a Web Page and forget about them. Training is critical and easy to do.

3. About 10-50% of your affiliates will never take action. Bank on it. Know all those big figures of affiliates? Imagine if 50% of Amazon's affiliates have never done a thing. Sound crazy? I'm have two affiliations with Amazon; one generates good sales, the other has never even posted a link on the Internet. Numbers can be deceiving.

4. ActiveAffiliates: At ActiveMarketplace we have created a term called ActiveAffiliates, how many affiliates are actually making sales for you. These are divided into very active and semi-active affiliates. Our goal is to create a network of 5,000 ActiveAffiliates who we closely support, train, and encourage to continue making money with us. The real question for your network is, how many ActiveAffiliates do you have? How many sales does the average, ActiveAffiliate make?

After looking through the nooks and crannies of the affiliate industry, I find most of us groping with thousands of affiliates, and bragging about them like they are hits. If you remember the early days of the Internet, people used to brag about the number of hits their page got.

In the affiliate industry now, the same thing is happening, because Amazon mania is running rampant. Amazon has something like 185,000 affiliates, which is terrific for them. Few if any care what happens to the affiliates.

Be different. It will make a difference.