Starting an affiliate network (12)
I was reading on the forum about all the stuff concerning AM and was wondering if it is 'easy' to start an affiliate network?
Not really easy of course, but is it possible without needing tons and tons of cash?
Is there white label software that can be used / recommended?
Originally Posted by s14b23
Everflow seems to be the gold standard at this point as far as platforms go.
Very mature industry though...
If I were going to start an affiliate network I would either make it lazer-focused on one region's lead-gen offers (like all Canada lead-gen, or all French/Belgium/Switzerland lead-gen, etc, or all Polish lead-gen, etc), or lazer-focused on one special vertical, or one special strategy (like Shinez has done with affiliate content-arb).
Or if you're super ambitious, focus on the confluence of crypto and affiliate marketing... surprisingly there hasn't been a lot of big projects at that nexus but it seems to me that its bound to happen eventually (not in terms of crpto-oriented offers I mean but rather some type of on-chain architecture utilizing tokenization).
More often you have slower payment cycles when you work with advertisers and offer owners directly.
When you run an own CPA network you have to have the funds to pay your affiliates for their traffic, no matter if you received your payment already or not.
The affiliates also work with you and not with the offer advertisers/offer owners so even when they decide not to pay you still have to pay your affiliates from your own pockets.
Affiliate network = modern loan sharking.
You take a piece of the action and in return you float the payments. So yes, you need to have deep pockets if 2/10 advertisers default on you. For some networks it only took 1 bad apple to get wiped out in the past.
Good luck!
To make it properly, you need a lot of cash for SURE.
The only way to cut it down is to do what jack_l suggested above - lazer focus is the key.
And I'd say you need to go way more focused than a country wide network. I know a guy who runs a network in my country which happens to be one of the smallest countries in the world with only 5+ million inhabitants and his team still counts 15+ people. Of course he started with less, but as jack_l mentioned (again), this is a mature industry so players who don't have their shit together stand very low chances.
Originally Posted by david-cc
Goes both ways... how much cash is 'parked' by networks from affiliate marketeers that did not get enough conversions for a payout/treshold?
I really have no idea, but would be interested to see those number some day
Take Google for example... the money they have earned over the 20 years with Adsense that they did not have to pay because small publishers did not reach the $ 50 / $ 100.
And if they had to pay after al those months... the cash was very interesting for their cash flow.
Makes me think about Starbucks. Completely different business, but the amount on the pre-paid coffee cards makes them the 'largest bank in the USA' providing cash for expansion. Without having to pay interest
And to be clear, not really want to start a network... a bit too much of a 'solo guy' for such an adventure. But interested in 'the model'
Originally Posted by s14b23
One more important thing to consider: Never calculate with anything but the worst scenario and make sure that you can handle it.
It´s a bit similar to organizing a festival, conference or whatever.
You can´t calculate a scenario where all tickets are sold and everythong goes well.
In worst case your event has to be cancelled, you still have to pay many people and maybe you also have to refund the tickets.
When you don´t have cash for it you´re probably done.
Same with running an affiliate network.
It only has to be once where you can´t pay your affiliates, this can already be enough to destroy your business.
This is a pretty hard and demanding journey, and if you want to make it right, you'll need to put a lot of time and effort to it. Can it be achieved without huge amount of money? Yes, it can, but it definitely won't be that easy since for starting a new affiliate network you'll need to have some budget that you can operate with as you'll have to get some good offers that you can place on your site and you'll need to reach to affiliates that will work with you, and you can't do it without offering them some decent payouts. Beginning as an affiliate is a completely different thing, as here you can start without too many money, but as network you'll have different ad bigger responsibilities. As for other question, we use Cake as a software and it's good, we are satisfied with it, but again, it also costs some money.
The responses here are definitely spot on.
One more important question though, is how you are planning to get the offers in the first place?
Do you have special relationships with offer owners? Or do you have your own offers to run?
Recruiting affiliates for your network is just 1/3 of the battle.
The other 1/3 of the battle is recruiting offer owners.
And the other 1/3 is managing the cash flow and risks of nonpayment.
If you have something differentiated and attractive to offer to both offer owners and affiliates, you could have chance. But if you are just rebrokering other networks' offers, it will be a challenge.
You should watch the interview of Ksenia Kostina from LeadGid. How she started her affiliate network in Russia, how the network went down and she had to restart from scratch...
It's on ZorbasMedia here:
https://www.youtube.com/watch?v=sEhp2ESYcco
There are a few videos of others affiliate networks that you could look at too, and if you look closely, you will find the interview of one the moderators on this forum 
Originally Posted by jeremie
https://www.youtube.com/watch?v=YOWPNI1ksgI
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