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How do you choose an “affiliate management system” for your affiliate marketing program?
There are open-source (or free) solutions out there, as well as a whole segment of “software as a service” options, and then there are also “affiliate networks” that serve much of the same purpose. I have described all your options in the below video:
If, however, instead of taking notes while watching the video guide, you’d much rather read through your options, below you may find an expanded “script” to help you choose the “system” that’s right for your “affiliate management” needs.
If you are looking for a “system” to “manage” the relationships with your affiliates, as well as to support your affiliate program, the technology landscape is chock-full of options.
Broadly speaking, we could divide these into two big groups: free and paid ones.
Among the free (or open-source) options you will find scripts, plugins, and other ways to support your “affiliate program”. However, I would recommend setting your expectations of these fairly low. After all, they don’t cost anything, and, typically free things don’t display characteristics of sophistication (on any level).
Among the paid versions, you will find two types: Software-as-a-Service solutions, and Affiliate Networks. Both are great options to consider, and they will range in pricing from a few hundred dollars a year to thousands.
I am not going dive into any specific platform’s pricing (as prices change, and you can check the current fee with the respective technology platform), but I do want to spend some time on — are the similarities and differences between SaaS solutions and Affiliate Networks.
Let’s start with the similarities. There are two things that make these two types nearly identical: both provide the advertiser (and its affiliates) with tracking and reporting functionalities. At its core, both the SaaS system and the Affiliate Network are technology solutions that ensure proper tracking of:
- Conversions (of clicks into sales, leads, or whatever it is that your affiliate program seeks to generate)
- Attribution (of these conversions to the referring affiliates)
They also support reporting on all of the above.
Both software solutions and affiliate networks may additionally report on:
In principal, however, it is still about these two things: tracking and reporting.
The three things where Affiliate Networks differ from SaaS options are:
1. Affiliate Database
Affiliate networks do have a network of affiliates that works with them. Having said this, I do not want you to assume that by joining the affiliate network, you get immediate exposure in front of this network of affiliates or any kind of guarantees that these affiliates will join your affiliate program. There will be ways for you to onboard some of these affiliates (“some” because not all will be relevant to you) into your program, but it’s something that you’ll have to focus on in your affiliate recruitment.
2. Payment Handling
Unlike SaaS solutions, Affiliate Networks also take care of payments for you. Instead of paying individual affiliate partners, you deposit money into one account of yours on the network, and it’s the network that handles individual payments for you. In contrast with most software-as-a-service platforms (where you need to pay each affiliate individually, collecting their tax data and adjusting your payment methods to what works for the affiliate), this part is much simpler on an affiliate network.
3. Fee Structure(s)
Finally, Affiliate Networks charge differently from SaaS solutions. With software-as-a-service system, you sometimes pay a one-time fee, but most would charge you a licensing fee (billed monthly, annually, or however the platform operates).
With affiliate networks, on the other hand, you have:
- A one-time Setup Fee
- Ongoing Transaction Fees (somewhere in the range of 2 to 3% of the sale’s total, or 20% to 30% of affiliate payouts)
- Monthly Minimums (or the amount you must pay every month in network fees to avoid being charged the difference)
So, in a way, an Affiliate Network’s compensation is tied to the performance of your affiliate program, whereas a SaaS solution would charge you based on the type of license that you have (be it a perpetual, or a term one).
On many reasons, I am not including names of any specific affiliate management system here. I do not want this guide to be an endorsement of anything (or anyone) concrete. There are many great options and you may easily find lists of these on this website (utilizing the “Search” function).
Now that you know how it works, shop around, and do keep in mind Aldo Gucci’s observation that “The bitterness of poor quality is remembered long after the sweetness of low price has faded from memory.”