With the decline of tracking cookies, setting up your own affiliate program is one of the best decisions you could take. Affiliates are increasingly driving massive sales for online retailers and businesses. Yours could be next.
It costs on average between $500 to $2000 to join an affiliate marketing network. That is, however, assuming you decide to go with an already made, or at least a fully managed affiliate network platform where you simply plug in and get started.
But there is another route you could take, a route that more and more businesses are taking due to the decline in tracking cookies. The second option for creating your affiliate program is to either build from scratch or use an affiliate program management tool like Systeme.io and Easy Affiliate.
What Is An Affiliate Marketing Program?
Affiliate marketing is a form of referral marketing where affiliates (independent marketers) promote your products and services for a commission.
There are typically three main players for an affiliate program to run. One is a business; the second is the affiliate network facilitating the program on their infrastructure and a flow of independent promoters called affiliates.
Affiliates are paid commissions to promote while the network does the fulfillment of commissions on behalf of the business. However, it isn’t always necessary to work with an affiliate network depending on your goals, strategy, and type of business.
Why Should You Use Affiliate Marketing?
Affiliate marketing is an efficient, low-risk, and cost-effective marketing strategy for smaller online businesses with low marketing budgets. The benefit of marketing through affiliates is that it will aid you in reaching out to larger potential customers quicker without having to increase the amount you spend on marketing.
Since virtually every aspect can be monitored, it also helps determine the return on investment. For example, you can review data on leads, sales, impressions, and clicks on the dashboard with the appropriate software.
Based on the program you choose to use, you could also focus on selling certain expensive products. You can ask affiliates to promote only a handful of products to earn a greater commission.
How Do You Start Your Own Affiliate Program?
Starting your own affiliate program begins with goal setting by identifying the things that matter most to you as a business when it comes to your affiliate program.
Being clear on why you need an affiliate program will help you make decisions to achieve that.
1. Objective and Goal Setting
Every business decision or marketing strategy must be built based on objectives and goals. Having long and short-term goals for your program will determine an approach and subsequent decisions you take.
Customer acquisition is at the top of objectives for all affiliate marketing programs. But also, there is customer retention and loyalty creation as well as increasing return on investment (ROI).
After all is said and done, every business wants to turn a profit from all efforts. That is the ultimate goal.
2. Which High-Value Products (Vehicles) Can Help You Achieve Your Goals?
Once you have set your goals, it is time to select the winners that will help you achieve your objectives. Again, if you have a single product, things are simpler than if you have tens, hundreds, or even thousands of products.
If your products are many, it will be more beneficial to only add products that give high value to both your affiliates and customers. This will help you create an affiliate program that sells itself.
3. Choose Your Pricing and Compensation Model
At the heart of your program is how much you are willing to pay independent marketers to promote your products and services. It is the primary motivation for affiliates to join your program.
It must be impressive but not cut too deep into your profits to end up in losses. Remember the other costs of running your affiliate program when considering your financials.
It is generally acceptable to have commission rates between 5% and 30% for physical products and even software products. But commissions could go up to the 50% range for digital downloads and products due to the zero cost of reproduction and shipping involved.
4. Choose a Management Style
You can either run your program or hand it over to a professional affiliate program management team. If you choose to run it yourself, you can either depend partly on an affiliate network to help you streamline certain processes as well as give you a solid infrastructure to work with.
But you could also choose to build your affiliate program platform infrastructure from scratch if you have the technological resources.
However, the more feasible option for most businesses, if they want to run their own program, is to use an affiliate management tool that gives a system without the added fees of a typical affiliate network platform.
Here are your options
- Outsource to a professional team. The team will then be responsible for the program.
- Run in-house; Build from scratch, use a management tool, or use a network.
5. Marketing Promotion and Affiliate Recruitment
Your program is nothing without affiliates. You may have put in lots of effort to get the program running, but it is now time to do the hardest part; getting affiliates.
It is generally agreed that 80% of affiliates will remain dormant and never generate a single sale. This is partly an efficiency and numbers game.
You need a solid recruitment plan that ensures that you get quality affiliates and can keep them active and well-motivated. This means managing your affiliates, building relationships, and creating a synergy of partnership with them.
Things To Consider To Create An Affiliate Program
1. Affiliate Marketing Management Tool (s)
It would be difficult to create a successful affiliate marketing program without using some tools and platforms.
You may need a number of them depending on various choices you make concerning your affiliate program such as whether you are outsourcing or in-house, depending on a network, and if you are running the program on a network.
However, options like systeme.io provide you with the fundamental affiliate program management tools without having to pay a dime for it. It is suitable for anyone starting out small without needing sophisticated management tools.
2. Commissions and Payouts
Commissions and payouts are key parts of your program. If you work with a network, payouts will be catered for by the network, but you will be in charge of setting your commissions.
3. Link Management Tools
Link management is particularly important if you decide to run your program in-house and depend on a management tool. Having a solution for link shortening and tracking will help you gather data and make things easier for your affiliates.
4. Marketing and Educational Materials
Your program must be promoted and marketed to attract affiliates. You need to create material that affiliates can use to promote your business. Materials should be updated regularly for relevance, and new material can be created based on sales and seasons.
5. Website Management
A website is a key asset when it comes to affiliate marketing. Conversion is the number goal of your website. Appropriate landing pages for your offers and products can increase conversions better than a generic page that gives little value.
6. Affiliate Marketing Program Promotion
Aside from creating assets for affiliates to promote your business, you need to promote your product to affiliates to join the program. This takes several strategies.
It is important to have a strategy for recruiting affiliates, keeping them happy and well-motivated. A good team typically has 80% of affiliates being dormant.
What can you do to have better engagement from your affiliates? Factors like these should be intentionally considered if you are to create a successful program.
How Do You Manage An Affiliate Program?
Managing an affiliate program takes a matrix of knowledge, tools, platforms, and human resources. The best way to get started for a small business is to use tools that provide a robust system that helps you run your program.
Having dedicated staff to run the program is a good way to ensure that the program is achieving its objective.
What Does it Take To Run an Affiliate Marketing Program (What You Need)?
Running a successful affiliate marketing program depends on several factors. Below are some of the critical ones.
1. Affiliate Marketing Platform – In House or Network Platform?
When it comes to running your own affiliate marketing program, one of the very critical decisions you have to make is whether you prefer to manage the majority of the program or another company (network platform) to handle them for you.
Depending on your organization, and your resources, you may prefer one more than the other. But whichever you choose, it makes sense to know what you are up for, what you are sacrificing, and what you stand to gain.
In-House (Build or Purchase Tool) Vs. Affiliate Network (Platform Fees)
When you choose to go with an already existing affiliate network platform, you choose to pay the platform fees (some take a cut from your sales, more on this later).
But if you choose to go with your own platform, you have two more options to choose from. The first is whether you want to build a platform ground up or you prefer to use an already existing solution such as Systeme.
These decisions have a lot of impact on how your program will run, the costs involved, and the level of involvement of your organization in the building and daily running of the program.
A platform such as systeme.io can perform a range of tasks for your program. These include the entire system on which your program will depend, such as the tracking and reporting of all aspects of your program.
They also cover hosting your creatives, mediating between you and your affiliates, and offering payouts on your behalf to them.
Affiliate Platform: Self or Outsourced?
Questions such as “What level of control are you giving away?; What are the implications for your data?; How it affects your entire business should be responded to before you make a final decision on the platform approach and which tool or platform to use.
You could outsource your program to professionals, but that, of course, doesn’t come cheap. Furthermore, choosing between a platform and self-managing the program does not affect the prerequisite of an affiliate program manager who will be in charge of all things “Affiliate program”.
Engaging one in the early stages will relieve you of going through the steep learning curve as a manager should know what alternatives will meet your needs.
What is Your Game?
The game you want to play with your affiliate program directly impacts what to choose. You need an affiliate program manager, regardless of whether you are going with a network or self-managing.
When you are self-managing, you will spend more on managing and growing your program. Networks already have thousands of affiliates that are an easy sell to adopt your program.
But if you want to play the long game to save from network fees and expenses, that could take a long time to build. You need to decide which game you want to play early.
You can work with a network platform and still have another program managed by an in-house team that oversees both. However, this is probably the “all-guns” approach and will cost you a lot.
If you have the vision and funding, you could leverage the benefits of each approach. This could be a great thing if you are a new brand, lack trust, and yet want to start your own program.
For example, the network platform motion could be for affiliates you want security, while your in-house run alternative could offer more commissions for those willing to take the risk.
So, what does it cost for an affiliate program management platform?
Affiliate program management platforms typically take a fee of between $500 and $2000.
Platforms that provide affiliate program management and their costs
- Systeme.io – Free for life (Test it out here)
- Easy Affiliate – $199 per year
- Scaleo.io – From $299 per month (14-day free trial)
- Post Affiliate Pro – From $97 a month (14 day trial for free)
- PartnerStack – From $500 a month
Popular Networks That Manage Affiliate Programs Of Businesses And Their Costs
- VigLink – Custom Quotation
- CJ Affiliates – $3,000 one-time fee. Deposit of $3,000. Renewal fee of $500.
- Rakuten Marketing – Pricing Custom/Quote
- Share A Sale – Network access fee of $550 and $100 deposit.
- Click Bank – $49.95 activation fee.
Major Affiliate Marketing Networks
- ShareASale – close to 6,000 programs
- CJ Affiliate – over 1,700 programs
- Rakuten LinkShare – over 1,400 programs
- AvantLink – close to 700 affiliate programs
- Pepperjam – over 500 programs
2. Creative Inventory (Marketing Material)
Having an inventory of creative works is one of the key powering features of an affiliate marketing program. They make your products easy to share with others, whether on websites, blogs, or social media. It is an absolute necessity. You cannot leave it all to your affiliates.
Having a very wide range of options for your affiliates is one of the best ways to get them to promote your products. Getting them to sign up for your program is the easy part. However, getting them to try their very best to sell the products is what demands a lot of work from you as an affiliate manager.
Based on the graphic design capabilities of your team, you could go as deep as you want and as wide as you want with creatives. The more options you provide, the more you make it easy for them to place your podcast in front of potential customers.
The good news is that if your product is not complex and without lots of variations, a simple referral link could suffice for your program. In such a case, all new affiliates get a unique link, and that is all they need to promote your single product or offer.
If you happen to have different products and offerings, having a good inventory of creatives trying to sell detailed features and offerings from your product line may be the best way. If you are working with an affiliate network, you may still need to create some inventory.
However, some platforms such as CJ and Pepperjam have tools that allow affiliates to create their own custom links for certain offerings and create what exactly they need.
The final and last thing to note about your affiliate program creative inventory is that you need to have a team constantly updating them for relevance. You may also maintain a team to create creatives for seasonal and other custom offers, such as massive sales.
3. Product Feed – Affiliate Landing Pages Or Website
Time to get less creative and managerial to technical. The engine of your program and how well your program performs depend on a large scale on your own ability to convert customers.
Your affiliates will do the work of delivering qualified leads, but it all still depends on your ability to convert. This means having a massive library of landing pages with specific offers and deals for various features, products, and services.
This forms your product inventory feed. Of course, if you are a digital product such as software, you don’t need multiple product IDs for product variations. What goes into creating your product listings, such as product names, various IDs, pricing, categories, and landing pages, depends largely on your business, marketing strategy, and industry.
To give you a perspective, imagine you have a store with a thousand products with an average of 3 variations. That is an insane number of pages to build. This also includes creating creatives for each product and more.
4. Affiliate Program Management Team and Tools
Whether you decide to outsource to a professional team, go with an affiliate network or decide to manage your program fully, you still have a role to play. There is no way to totally hand out your program, relax and wait for results.
The degree of your involvement will definitely differ based on which option you choose to go with. Most affiliate networks do not offer program management services.
Instead, they give you a solid and proven system and infrastructure to build on. The rest that goes into managing your program falls right back on your laps to deal with.
The fact that you cannot fully offload your program means recurring costs will flow through.
Recurring costs to look up include:
- Recruiting Affiliates and Onboarding them. It isn’t enough to simply recruit. You need to engage them.
- Marketing your affiliate program. Recruitment is good, but marketing will make recruitment and committing affiliates much easier.
- Promoting and instilling policy and TOS compliance such as identifying click fraud.
- Cost of the affiliate network platform, paying the team (in-house or outsourced), and other affiliate management tools utilized.
- Constantly looking for opportunities to better your program
Commissions are the single largest cost on your balance sheet for your program. This cost is directly tied to your sales and your mode of compensation. There are four models you can adopt when you are starting.
The popular affiliate commission models are;;
- Pay Per Call (PPCall)
- Pay Per Sale (PPS) / Cost Per Sale (CPS)
- Pay Per Lead (PPC) / Cost Per Lead (CPL)
- Pay Per Click (PPC) / Cost Per Click (CPC)
The model you choose determines which action means most to you as a business. Setting out your program on the right foot means deciding which actions mean the most to you as a business.
Having such knowledge of your business will help you make the decision faster and much better.
Systeme.io Affiliate Management Program Features
Systeme.io is an all-in-one business management platform that brings together many marketing tools. It features sales funnels, email marketing, course creation, and more, including the ability to create your own affiliate marketing program for free.
The platform operates as both an affiliate management program and an affiliate network. In addition, systeme.io has a marketplace where your products can also be found.
The affiliate program dashboard gives you access to important details such as total affiliates, sales, sales by vendor, leads, and payments made. You can set your preferred affiliate commission and decide whether payouts should be automatic or manually initiated by you.
You can make payments through direct wire transfer or PayPal. By default, your affiliate commission is set to 40%, so make sure to adjust your settings.
Systeme.io Vs The Others
In comparison to dedicated affiliate marketing platforms, management tools, and network platforms, Systeme.io doesn’t have much to offer. It is, at best, a basic form of most affiliate program management platforms.
A tool such as Post Affiliate Pro has 48 different features to help you manage your program, including discounting, creative banner rotating tools, smart links, site replication, split commissions, advanced analytics, reporting tools, and more.
Easy Affiliate, which is a WordPress plugin, is a 360 affiliate marketing management tool that leaves almost no feature out of its suit. Right from its easy-to-set-up interface, Easy Affiliate has lots of payment integrations, a personalized dashboard for both program managers and affiliates, commission tracking, applications tracking to help you grow your recruitments faster, and fraud detection (very critical), and more.
With regard to affiliate networks, you get access to thousands or even millions of affiliates who can readily find your program on their platforms. Many big names have a proven system and infrastructure that you can plug away with advanced tools, tracking and data reporting, recruitment, and more.
While you may be tempted to write Systeme.io out, remember that it comes at a free rate. Its offerings are completely free.
Considering the price and the offering, there is a lot of value compared to a platform that charges $500 or more to provide a slightly advanced version of what Systeme.io offers.
If you have the budget and need a tool that has been proven, you may overlook system.io, but for most small businesses and indie entrepreneurs, Systeme.io is a no-brainer.
As already pointed out, decide your goals and objectives and set your budgets. These will make lots of decisions much simpler and faster.
Advantages Of Creating Your Own Affiliate Marketing Program
- Low maintenance and recurring fees
- Low risks involved
- Tools, software, and platforms for easy setup and implementation
- High rates f conversion
- High-quality traffic
- Brand awareness and loyalty
- Gain a better competitive edge
Disadvantages Of Creating Your Own Affiliate Marketing Program
- You may have to follow strict platform rules
- It doesn’t work overnight
- Massive costs on website, tools, and marketing for success
- Having to battle compliance issues
- Risk of fraud
Final Thoughts: Recommendation
Creating your own affiliate program is not as daunting as managing it. Hence, having the right resources and tools in place is essential to ensure the program’s success. However, this bores down to your products and how big you want to go.
For small businesses and solopreneurs with single or few products especially digital items, systeme.io may be what you need without incurring much cost. You can get the basic features you need for free and efficiently manage them as with big affiliate management networks.
However, if you have many products and need other sophisticated features to carry out several functions, then dedicated affiliate management networks would be your best option. You can take some work off your chest with just a few clicks here and there.
Over To You!
Hello there! I hope this article has given you some helpful insights. If you have any experience with cost in managing your affiliate program kindly, share in the comment box to help others as well. You’re also free to ask further questions, and I will gladly connect with you. Until then, Shalom!
4 thoughts on “How Much Does It Cost To Set Up Your Own Affiliate Program?”
I am surprised to see that you say it costs between $500 and $2000 to join an affiliate network, as so far I have not had to pay for any affiliate networks that I have joined. Are these auxiliary costs like building a website, buying a domain name or website hosting that you are referring to?
Or are these costs that would pertain to you starting your own affiliate network? Later in your post it appears that this could be the cost to start your own affiliate network, rather than joining a network, but could you please clarify as I am confused? Thank you.
The cost is not for joining an affiliate network. It doesn’t cost you money to join most affiliate networks. The cost is for managing your affiliate program with an affiliate program management network. I hope your confusion is clarified.
Thanks for an interesting look at businesses setting up their own affiliate programs. I am an affiliate marketer, so I view this from the other side as such.
As much as I knew the basic structures behind setting these programs, you have given me a lot more insight into costs and managing the program from a business perspective.
You are saying there are 2 options in running an affiliate program. That is running it yourself or outsourcing to an established program. I can’t help but wonder at what scale of business would it be more beneficial to run it yourself or to outsource? Or would it come down more to experience?
For example, if you had a well-established business that was making a steady profit at what level of trading would it be better to retain in-house? Also, to set up some of the back-end reporting and ongoing affiliate contact, I would imagine the costs would become prohibitive. As you said the website costs, compliance issues etc would pretty much decide for me to go the outsourcing route. In that case, would it be better to just outsource everything? And from what you were saying can systeme.io handle all the issues of a small business?.
I think I will look closer at systeme.io and try and drill down to the “nitty-gritty” offer.
This has given me food for thought, so thanks for the time taken in providing this information. I will probably be getting back to you with more questions on this after I look closely at systeme.io and some of the other programs.
It will be better to handle yourself if you’re just starting and don’t have a much bigger audience. This helps you to save money that you can invest in growing your business. As your business grows and your reach becomes bigger, outsourcing the affiliate program management could be helpful so that you focus on other part of your business that enables you to scale up.
For a small business, Systeme may be all that you need in my opinion to cut down costs and other sophisticated features you may not need. However, Systeme can serve well-established businesses as well. I hope I’ve addressed all your queries. Feel free to follow up with more questions and I’ll be glad to respond.
Thanks for the questions.