You are discovering the affiliate marketing world, where top businesses earn 5-30% of internet revenue. You realize its power and want to start an affiliate program for your business.
Yes, that’s a great idea!
But before starting, you should weigh the crucial choice: affiliate software vs affiliate networks. You may wonder about their differences and what suits your business best.
Our detailed guide will uncover everything you need for an informed decision. Dive in and make the right choice!
Key Differences Between Affiliate Software vs Affiliate Networks
So, what are the main differences between affiliate software vs affiliate networks? Let’s see them one by one below.
Costs
If you choose to start with an affiliate network, you will need to pay the initial fees. It also charges on every sale and affiliate commission. Fees vary from network to network. Some networks may have extra fees.
For example, Awin network access costs you £75 monthly in the UK and $50 in the US, with similar rates for other regions. Besides, there’s a tracking fee of 2.5% on revenue, meaning AWIN charges $2.50 for every $100 your business generates.
Meanwhile, if you start with affiliate software, you only need to pay an initial fee. There are no ongoing payments to the software developer.
You’re still responsible for paying affiliates when they make sales. However, there are no additional costs from the software provider.
It’s a one-time expense for the software. That gives businesses a straightforward financial arrangement.
For instance, you choose UpPromote to manage your affiliate marketing programs. Depending on your plans, it can be from $29.99 to $199.99. You can even try a free plan at the start.
Affiliate Recruitment
Affiliate networks have already gathered a sizable group of potential affiliates. Thanks to that, you can reduce the workload on recruiting thousands of affiliates.
However, your partnerships will be confined to registered affiliates on the network. That limits your options in choosing affiliate partners. You may also compete with other merchants in hiring affiliates. It’s due to the network’s competitive nature.
The network will also be the intermediary that may hinder direct relationships with affiliates. You will find it more difficult to nurture the relationships with your affiliates.
In contrast, using affiliate software means taking charge of your referral programs. You will be responsible for recruiting affiliates. You shape how your brand is promoted via marketing channels.
Of course, you must spend more time seeking and approaching affiliates. But this way grants you control over your brand representation. It also helps to establish direct relationships with affiliates.
Affiliate Ownership
Networks retain control over affiliate relationships. They discourage partnerships outside their platform, protecting the data they own.
You can see transaction data, but the network owns affiliate lists and details. So it’s hard to switch to other software or networks.
Conversely, affiliate software provides businesses with full control over affiliate relationships. It allows straightforward communication with affiliates. It also enhances the ability to nurture close affiliations.
All data can be easily downloaded since they belong to your business. Such data may include affiliate information, transactions, and other relevant details.
Affiliate Engagement
Affiliate networks play the role of hosting your program. But it doesn’t actively assist in affiliate engagement.
Typically, networks lack tools to motivate affiliate activity in your specific program.
Moreover, their primary aim is to connect numerous affiliates with various companies. That’s because their revenue increases when affiliates join multiple affiliate campaigns.
In contrast, affiliate software aligns with a company’s interests, including fostering engagement. Premium affiliate tracking software assists in enhancing affiliate involvement through automated program promotions. This helps in keeping affiliate partners informed and enthusiastic about promoting your product.
Software is also built with many features targeted to help businesses attract affiliates. For instance, UpPromote has a Marketing Tools tab. It lets you put media, promotional materials, and resources for your affiliates. It also has sections like bonuses, gifts, coupons, etc, that you can use to motivate your partners.
Permission to access tracking data
Both networks and software allow you to monitor your program. You can track the commissions affiliates earn and utilize data for payment processing. The difference here is the accessibility of data.
In a network, they retain information about affiliates and crucial performance metrics. That means they are the ultimate owners of your affiliate data.
Affiliate software grants your business complete access to all data gathered. With data ownership, you can analyze affiliates’ performance in detail. This helps you improve your program and make it work better.
Payment process
If you operate your program through a network, you will pay the network, and they will pay your affiliates.
The payment terms will rely on the network as well. For example, if they pay affiliates on the 15th month when their accounts reach $50, your program will be subject to such conditions.
However, you will be responsible for paying affiliates when using the software.
Payout methods and time will depend on you. The minimum payment threshold is also your choice.
You can make manual affiliate payments in any method you want or use software options. If you proceed with UpPromote, you can use PayPal or store credit for in-app processing.
Terms and Conditions
When you choose affiliate networks, you may need to enter into an agreement with them. Such an agreement may have exclusive terms. Those prevent you from joining other networks for a period. In other words, joining networks might limit your freedom.
But if you choose software, the situation will be different. There are usually no compulsory agreements, and you may cancel at any time. That’s more convenient in cases where the option you choose doesn’t work well.
Program customization
Affiliate networks use software similar to what you can get yourself. But they have one fixed setup for everyone. If you join, you must follow their way.
You get more options when you manage in-house affiliate programs with software. You can choose how to pay commissions, like recurring rewards or special offers. Customize the program’s look to match your brand and smoothly connect it with your other software to keep track of leads and sales.
What is An Affiliate Network?
An affiliate network is a platform that includes a huge number of members. It’s the place where businesses and affiliate marketers can connect. You can join networks to reach out to content creators to promote your products.
Affiliate networks simplify the process of creating an affiliate list by gathering participants. Businesses are relieved from the manual task of finding affiliates. Once businesses and affiliates connect, the network serves as a middleman.
You will need to pay a fee to list your program on the network. Once approved, you can receive applications from affiliates. Then, you can screen and choose affiliates suitable for your program.
Affiliates who join the network for free can find merchants and apply for programs. When they find a program they like, they can apply for it and wait for approval to start promoting.
The network handles tasks like providing links, managing accounts, and paying affiliate commissions.
While networks make finding and managing affiliates easier, they operate like marketplaces. Companies compete for affiliates, and there are extra fees when affiliates make sales.
Pros And Cons of Affiliate Network
Pros
Available affiliates
One big advantage of using an affiliate network is that many affiliates are ready to join. These platforms bring in many different marketers and influencers. It gives businesses a wide range of potential partners. This makes it easier to build a team of affiliates.
Less time to set up
Another good thing is that setting up your affiliate program is faster. It’s because you use their existing system.
Businesses can start their affiliate program more quickly than creating their own. This simplified setup helps merchants begin their affiliate marketing efforts without delay.
Cons
High costs
On the downside, one notable drawback is the high costs associated with affiliate networks. These platforms typically charge initial fees and extra fees on each sale. These costs can accumulate, impacting the profitability of the affiliate program.
Not own affiliate data and relationships
Another con involves the lack of ownership over affiliate data and relationships. Affiliate networks usually keep control and ownership of crucial data. It limits your ability to independently manage and nurture direct relationships with affiliates.
Less customization
There is less customization available within affiliate networks. Merchants may find limitations in tailoring the program to their needs and preferences. Your affiliate agreement may also need to follow the network’s.
This inflexibility can prevent you from creating a unique affiliate marketing strategy.
Limited payout conditions
You’ll need to follow their fixed payout terms when managing via affiliate networks. Such conditions may not align with the preferences or requirements of your businesses. This leads to restrictions on your control over the payment process.
What is Affiliate Software?
Affiliate marketing software is an alternative to networks for managing your affiliate program. With software, you can establish your program. You can take charge of tasks for affiliate marketing operations.
Like networks, affiliate marketing software generates links, manages tracking, etc.
You can invite marketers to join. Then, they promote your products and earn commissions on sales through their links.
While affiliate tracking software requires you to find your affiliates, it eliminates the need for additional fees for every sale.
Moreover, it provides easy customization based on your company’s needs. So, it offers more control than running a program through an affiliate network with its fixed rules.
The next part gives you a clearer view of the advantages and disadvantages of using affiliate software.
Pros And Cons of Affiliate Software
Pros
Cost-effective
An outstanding point of using affiliate software is its cost-effectiveness. Unlike affiliate networks that often come with many types of fees, affiliate software involves only an initial cost. It is a financially attractive option for businesses.
Own affiliate data and relationships
Merchants using the software have ownership and control over their affiliate data and relationships. It allows direct management and nurturing of relationships with affiliates. It then fosters stronger connections and personalized collaborations.
Flexible customization
Affiliate software also stands out for its flexible customization options. Merchants can tailor the program to suit their specific needs. The customizable things include commission structures, commission rates, integration with existing software, etc.
Versatile payout conditions
Affiliate software provides versatile payout conditions. Merchants can set conditions that align with their goals and preferences. So they can enjoy a more adaptable approach to affiliate compensation.
Cons
Recruit affiliates yourselves
One drawback of using affiliate software is the need to recruit affiliates independently. It doesn’t have a built-in pool of potential partners like networks. Thus, merchants need to invest time and effort in finding affiliates on their own.
More time to set up
Setting up an affiliate program with software might take more time than using networks. Developing an in-house system can be time-consuming and needs careful attention to detail.
The Similarities Between An Affiliate Software And An Affiliate Network
Giving affiliate link
Using affiliate software or affiliate networks also requires providing unique affiliate links. These links serve as identifiers, tracking the source of traffic and sales generated by affiliates. Whether using software or a network, assigning trackable links is fundamental.
Tracking affiliates’ sales
Tracking affiliate sales is a shared point between affiliate software and networks. Through tracking mechanisms, both solutions monitor and record the sales generated by affiliates via their unique links.
This tracking ensures accuracy in attributing sales to specific affiliates. It helps to provide a transparent system for commission calculations.
Paying affiliates with commission
Both affiliate software and networks facilitate compensating affiliates for their efforts. Merchants can rely on them to calculate and pay the commissions accurately.
This process ensures that affiliates are duly rewarded for their contributions. It fosters a mutually beneficial relationship between businesses and their marketing partners.
Affiliate network vs Affiliate software: Which One Is Better?
When choosing between a network and software, you should consider some main factors. They include your goals, time commitment, and budget.
Your goals
Consider your objectives when starting an affiliate program.
Are you aiming for rapid growth or gradual expansion? Do you have preferences for the types of affiliates, such as content creators? Do you want full ownership of your data, or are you comfortable with limited access?
Answering these questions guides the decision-making process. For instance, if you target some specific types of affiliates, proceeding with software and hiring affiliates yourselves may be a suitable choice.
Time commitment
Regardless of your chosen platform, building an affiliate program demands time.
However, affiliate software requires manual outreach to attract affiliates. This requires more time investment from your end.
You should assess your time availability and willingness for outreach. This influences the suitability of each option.
Budget
Budget considerations play a crucial role. If you aim for an economical option, affiliate software might be your choice. However, with a larger budget, other factors, such as goals and features, become crucial in determining the right fit for your business.
FAQs:
- What is the advantage of using affiliate software instead of an affiliate network?
The main advantage lies in cost-effectiveness and greater control.
When choosing affiliate software, merchants will enjoy lower fees and own their affiliate data. It also has customizable features. So, it allows a tailored and budget-friendly affiliate marketing strategy.
- Are affiliate networks worth it?
It depends. You should weigh the associated costs and potential limitations. Depending on specific needs, the benefits of networks may outweigh the drawbacks, making it a valuable investment in some cases.
Conclusion
Affiliate software vs affiliate networks is a compulsory consideration when you start your affiliate marketing campaign. Though they share common points, they are different in many aspects.
Each option has its advantages and disadvantages. Each is suitable for specific needs and situations.
Some factors that guide your choice include your business goals, time commitment, and budget. Think about these factors carefully. Then, you can make informed decisions and start your own affiliate marketing campaign.
