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The e-Merchant's Options There are three basic ways an e-Merchant can add an Affiliate Program to their Internet marketing plan. Of course, we believe we have the best option!
The first is to develop an internal affiliate software program. This requires an investment in either "customizable" affiliate software that must be honed to the needs of your individual website or web and database developers to create a "home grown" affiliate software package. The primary risks of this type of affiliate program are oversights (bad design and/or missing features that are difficult to implement later) and cost overruns (a problem with any kind of software development).
The second solution is the widely used Affiliate Network provider. There are many outside services that will, for considerable up-front and on-going fees, take care of your Affiliate Program for you by registering your affiliates into their massive pool of other affiliates. "Your" affiliate actually becomes their affiliate and they are given access to all of the network's other (sometimes competing) e-Merchants. There are still varying degrees of work required for your site, even though the affiliate software is on another site. Most affiliate networks pay the affiliate directly, so you must also keep money on deposit with them to pay commissions. Sometimes these affiliate programs are referred to as "Internet Marketing Communes" which is where the primary risk comes from: You're using many other e-Merchants to offset your costs, but the only clear winner is the affiliate network provider.
The third solution is an outside provider of affiliate software. You are given all of the facilities to register, approve, track, and pay affiliates. There are varying amounts of work to be done to your site and varying fees depending on the provider even though the affiliate software is on another site. Some services pay your affiliates for you, while others leave it up to you. Some services retain rights to market to your affiliates while others guarantee your complete ownership of your affiliate data. The risks of this type of affiliate program are directly proportional to the size of the up-front fees and the length of required contracts.
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