Dummies Guide to Selecting Affiliate Software

It seems like everywhere you look on the Internet, someone is coming up with a good, cheap affiliate software program. I've seen them starting at $49 and going all the way up to the hundreds of thousands of dollars.

Affiliate programs are effective tracking systems; they should also be training systems for your affiliates and customers. Look at most programs and you will see the same old thing; online stats, minimal tracking, and likely an increased cost to adapt the software to your specific needs. Remember that this is not like buying Microsoft Word or Access software; this stuff doesn't always work out of the box.

What you get out of the box rarely is what you will use, but again it depends on how complex your offer is. To understand the best affiliate software tracking system for you, consider the following:

1. How many transactions do you expect to do per day? Weigh your expectations against the reality of your market. What Barnes & Noble generates per day demands a service bureau like Be Free; a niche book store like RobotBooks.com would hardly need such a fancy system.

2. How many products will you be offering? It is often wise to focus on 1-5 products via your affiliate programs as lead generators, and back end the remaining products once your customer has bought from you once. The affiliate system for this set up is much easier than a shopping cart/affiliate program.

3. What level of sales would you like to generate? Compare this to the cost of the software, and whatever you do, add 15% at least to your initial affiliate cost projections. The software will need to be adapted if it is not designed for a specific use. Is it worth the cost?

4. Can you put your affiliate software on payments or lease? If not, you may spend money on the system, then have little left over to market it. One of the biggest problems of most Web Sites is that they do little if anything to generate traffic. Even with an affiliate program, you are going to have to market.

Once you know the basics, it is time to start picking out the software. As a general market guideline, there are three levels of expenditure:

A. Below $500: this software will do one thing simply. Be sure to pay someone to install it for you unless you know basic Web programming. For the very small Web Site, this is a good solution. For those looking to grow, this software is rarely expandable. You may have to start from scratch if your business does well, upgrading to another piece of software. This takes time.

B. $500-$1,000: In this price range, you can get functional programs installed for you. Commission Junction's service bureau is also available in this range for the start up, but remember that they get a percentage of your transactions. For those with Shopping Carts, Patrick Anderson of ADNet International (770-936-8308, http://www.adnetintl.com) has developed a cookie based tracking system for less than $1,000 that works well, and you keep all the transaction value.

C. $1,000 and up: At this range, you start looking at customized programming, Web Site/Affiliate Site Co-Development, and the service bureaus like Be Free and LinkShare or ClickTrade. Bureaus will gain a piece of each transaction of course, and may have monthly minimum payments associated with their services.

NOTE: We have developed our own proprietary affiliate tracking system, the ActiveAffiliate E-Commerce System. It is also a marketing and follow up system, with complete creative consulting and business plans. If you visit either of my affiliate programs (http://www.linkstosales.com/signup.html or http://www.activemarketplace.com/signup.html) you will see the ideas in action. Sign up and you will also receive our initial, 5 step affiliate training for our program. Use this as inspiration for your own, turnkey, automated affiliate network system. Give me a call if you are interested in installing one for yourself at (530) 873-3637.

Now that you know the pricing, here's some steps to take:

1. The first thing to do is look at how much money you are looking at making and how much you can afford to put into it. If you don't know, be very careful. You can't reach a goal you don't set, and you can't plan your way if you don't know how much is worth investing. If I want to generate $1,000 in total sales is different than $100,000. Although it sounds obvious, look at how often people try to get something for nothing on the Internet. This is business; to really succeed, you have to invest time and money; measure how much by how much you want to generate. For example, if I want to make $50,000, I'm going to have to spend at least 10%, $5,000, for the system, plus more for the marketing.

   (If you don't have to do this, good for you; for most, the investment needs to generate the return...and put a dollar sign in front of the hours you spend. It adds up.)

2. Below $500, there are cheap solutions. AffiliateZone.com has an excellent reputation, if you don't have a budget to do it yourself. It is a trade off in time; this should not be your first programming effort on the Web. It is way beyond HTML. If you don't understand Java and CGI, pay all of them extra money to install it or it will never work.

3. If your budget is below $1,000 you need to look at what you really can afford. Break it out into different price ranges; as you move up on pricing move up on how much you will pay a service bureau per transaction. Having a service bureau control your affiliates is also a question. Service bureaus tend to be great for bigger businesses, who have a cost for outsourcing payroll services and transaction based fees. Smaller businesses may see their profits dwindle by going to a service bureau.

4. $5,000 and up will get you a complete solution; if you go with a service bureau, you will have to pay transaction fees and likely reach minimum amount of guaranteed sales per month. For less than $10,000 you can get a complete Web Site, email follow-up systems, creative ad copy, consulting, a marketing plan, and a proprietary affiliate tracking system. Best of all, you own every piece of the sale, and you own your affiliates.

5. Pick the best solution for you. It is not like buying a piece of working software; you will likely have to adapt it to fit your exact situation. Programming costs can be dramatically increased, so be careful. What you spend initially may not be what you spend in the long run.

6. Look for a complete, turnkey package like our ActiveMarketplace E-Commerce System mentioned above; pay extra for the time you will save and be sure you can pay per transaction fees. If you look at things in the long run, you may find that the best solution is to own your own affiliate system, and your own affiliates.

7. Build your sales force online; create a series of sales managers by installing a Two Tier program. If you don't do this, your competition likely will.