Whose Affiliates Are They Anyway?
by: Declan Dunn

The real trick is attaining the confidence that all of your work will come back to you. Paying money so that 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.

Try to Keep Some Semblance of Control – Consider Service Bureaus

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. Affiliates are offered to every other merchant in some cases.

Why join a service bureau where everybody knows who your affiliates are? Why give your 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; 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 consider 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. I personally want to keep my affiliates close and not have my training and loyalty interrupted by other companies. I do realize that my affiliates must affiliate with other programs – that is not the issue. Affiliates should feel special, not that they are 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’ve found:

• The 97-3 percent rule: One major affiliate network has thousands of affiliates, but only 10 of them generate any sort of sales. Up to 50 percent of their affiliates never act. Is this getting repetitive?
• Train your affiliates. 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 my “Insider's Guide: Winning the Affiliate Game” program, we try to show them what works and encourage them to act. Most businesses send their affiliates to a web page and forget about them. Training is critical and easy to do.
• About 10-50 percent of your affiliates will never take action. Know all those big figures of affiliates? Imagine if 50 percent of Amazon's affiliates have never done a thing. Sound crazy? Think about how constantly the web changes. Numbers can be deceiving.
• Active affiliates: How many affiliates are actually making sales for you? How many sales does the average affiliate make for you? Divide these into “very active” and “semi-active” affiliates. The goal is to create a network of active affiliates who you closely support, train, and encourage to continue making money with you.

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 as if they are hits (page views). 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. But few, if any, businesses care what happens to their own affiliates.

Be different. It will make a difference.