An affiliate is someone who earns commission or profit basing on the number of customers brought in to a business. The sales generated are usually tracked through affiliate links from one website to the other. One of the possible ways of making money from the internet is through affiliate marketing. To succeed in affiliate marketing, you not only spend a lot of money but also you need to invest more time in this project. It will do you good if you create something valuable for your readers that will help them solve those burning questions in their everyday lives. Here more sales will come up to your business. As an affiliate marketer, trust is paramount as people will only buy from you if they are assured of the services and quality you offer to them. In case you have decided on investing in affiliate marketing, you will need to purchase your own domain name which may cost you an approximate of $10 per year in addition to a host. It is possible for you to get hosting at no cost although many limitations come around with free hosting. So watch out on this.
How to start an affiliate marketing budget to become an affiliate marketer
In case you are budgeting for your affiliate marketing start up costs, do not forget to include the costs associated with the following 4 components of your upcoming affiliate programme.
- Affiliate Program Platform. You have to be decided on whether you will build your affiliate program in-house or on an affiliate network or that you will take advantage and exploit both the alternatives. The choice you make will make will have to impact on your budget. It is important that you are aware of the main differences between an in-house affiliate program and a network based affiliate program as explained below
- You will require your own platform so as to build and run your program in-house. Here, costs can go up to $500 per month or more depending on the platform you choose whereas a network based affiliate program provides the infrastructure necessary for tracking, reporting, creatives hosting and payment solutions.
- You are in full control over all the aspects of running an in-house affiliate program and also have the opportunity to directly work with your affiliates. It is advantageous in case you have an affiliate program manager who is experienced and knowledgeable. Outsourcing program management professionals is costly in the long run. On the other side, running your affiliate program on a network requires you to also have affiliate managers though with lower work burdens in case they are already knowledgeable with the affiliate network. These managers tend to receive all the information that they need in an easy to read format and they could have an access to pools of publishers who can recruit affiliates to your program.
- It takes some more time to attain results with an in-house affiliate program as compared to a network based program. You have to build, advertise, recruit affiliates for the program and then review their performance. However, on joining an affiliate network, you instantly access a huge number of potential affiliates in addition to a variety of tools and solutions.
- For an in-house affiliate program, there are higher start up costs and low long term expenditures while a network based program is less costly to start but can be more expensive in the long run. Affiliate networks can charge up to 30% override. So, for every $100 you pay your affiliates as commission, you will pay the affiliate network an approximate of $30. Similar to network costs, affiliate commissions are performance based. For the start, it is advisable that you join an affiliate network as you will get faster results and spend less money with little or no hustles. As time goes on and you start scaling and getting a better understanding of affiliate marketing, you can then design and run your in-house affiliate program. You will then be in position to compare the obtained results and costs so as to decide whether to continue with both fronts or go with only one option.
- Creative Inventory; Whether you are running your program in-house or on an affiliate network, you will require a creative inventory which refers to text links, banners, videos, flash content and the other materials that can be used by your affiliates to promote and sell your services and products. You may want to save money with a smaller and simpler inventory solution although without enough materials, publishers will be reluctant to promote your products and services. If you have the graphic design and programming skills, you can use these skills to create content by yourself and reduce on the affiliate marketing costs associated with hiring professional services. Freelancers can also provide you with affordable creative solutions.
In case you run your affiliate program in house, you will have to create everything from scratch and the amount of affiliate marketing costs will depend on the following specifics in your business.
- When your business depends on subscriptions or a smaller number of products and services, referral links may be enough. Your expenditures could be lowered to the costs of an affiliate tracking software like CAKE.
- When your offer includes various products and services, the size of your creative inventory ought to be directly proportional to the inventory of your products and services. Your affiliates will need text links, banners, videos, category-specific and campaign focused materials. Your affiliate marketing costs could be high.
In case your program is run on an affiliate network, your creative inventory requirements and costs can remain low. Most affiliate networks have specified tools that allow affiliates to create the materials they themselves need. Expenses regarding your creative inventory continue as you will require to update and enrich it while you launch new products and services, make website changes and create new marketing campaigns.
- Product feeds and Landing Pages.
Your business should incur the costs of creating product feeds and affiliate landing pages. Affiliate product feeds are files including all the products of a merchant and some of the product attributes. Online retailers who depend on affiliates to sell more should never start an affiliate program in absence of product feeds.
Invest in separate landing pages if your offer covers 1 or 2 products and services and you have affiliates to depend on for lead generation.
- Affiliate Program Management
At this particular point, you should have decided on your marketing program. You will also have incur costs related to; recruiting and activating of affiliates, building and keeping your program’s rules and policies, communicating with your affiliates appropriately, building and managing your marketing activities and more.