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Should we build our own network of affiliates instead of using software such as zferral? If yes, what are the best value for money affiliation softwares? If not, what are the best value for money affiliation networks?

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Honored to be a part of an OnStartups question. Thanks :) – Jeff Epstein Nov 8 '10 at 18:26

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For a bootstrapped startup, I would answer Yes. That being said, it depends on what you are trying to accomplish...

They are fundamentally different propositions:

Google's Affiliate Network, Commission Junction, PepperJam, etc. are all awesome networks if your goal to blast your offer to the world.

The downside for a startup is:

  • High upfront fees (prices range from a few hundred to several thousand)
  • Competition (both on product quality and price of your affiliate commissions)
  • Visibility (similar to above, how many affiliates will promote a startup?)

Obviously, I am a bit biased. The reason why we started zferral was because we ran into these issues with our own startups...

I would argue that an organically grown, grass-roots network of brand advocates (zvangelists) is much more powerful (and valuable) to a startup.

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Affiliate marketing is the best investment you can make in your overall marketing plan. I would not limit myself to any one network. Google's affliate network is not fully launched yet from my discussions with their reps. For a service based product, affiliate marketing makes sense. Companies need to think about it in terms of how much is an affiliate giving me (% you keep from the lead) versus how much am i going to be giving up to affiliates. Simply stated, affiliates drive new customers to your product you would not otherwise have. – Frank Nov 4 '10 at 16:33
@Franky B. I agree, affiliate and referral programs are pay-per-conversion which is super efficient and you only pay when a sale is reached. A commission-only salesperson! – Jeff Epstein Nov 4 '10 at 23:58
"A commission only entrepreneur!" – Frank Nov 5 '10 at 4:16
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Don't build your own, the use of an existing affiliate network will save you time, effort and money. Do not re-create the wheel.

You might want to check Google's affiliate network, if you are an advertiser you only pay for qualified conversions (someone actually buying something from your site) and if you are a publisher then you receive a commission on each sale.

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We have had to re-create this wheel several times. Its not a hard one to re-create. We needed support for multi level tiered reccuring payments, plus giving our affiliates to create discount codes. While we use our own, we use a few of the big ones too, CJ, LinkShare. Have not tried Zferal yet. THe more the merrier, Including your own. – Frank Nov 5 '10 at 4:18
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If initial cash outlay is a potential problem, you should start with a simple in-house program and see how it goes. This is especially true if your target affiliate sites don't have a strong allegiance to one of the large affiliate networks and are willing to work with you directly. This is usually the case in niche markets. I've used Post Affiliate Pro software which is very inexpensive and is generally well regarded.

Commission Junction and others like it have their own benefits. You will potentially reach a much larger market and have the opportunity to work with some "super affiliates." That might be the right direction for you to go, but it really depends on your product and your market.

Finally, it doesn't have to be an "either/or" decision. You can run both an in-house affiliate program AND have a program through one of the large networks. Some affiliates will only work with the large networks, but you might be able to cultivate a separate, smaller network with your in-house program that has higher profitability. This way you can work both sides of the market.

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