

Ask HN: Is it wise to use affiliate marketers to promote a startup? - srgseg

We&#x27;ve been developing some educational video products with a reputable author which we are planning to promote through Adwords.<p>We&#x27;ve been approached by a friend of a friend who claims to be able to use his contacts in the &quot;affiliate&quot; and &quot;super affiliate&quot; world to drive sales of our product. They were saying the product would be sold through Clickbank.<p>They&#x27;ve made wild claims, such as the possibilities of making tens of thousands of dollars in pure profit in just the first few weeks. This will apparently happen when the affiliates they have &quot;relationships&quot; with send out the offer to members of their mailing lists.<p>It sounds like we&#x27;ll have no control over what the affiliates will do to drive traffic, which is extremely worrying.<p>They also warned that we might want to sell it under a second brand name, because some affiliates will create websites with titles such as &quot;Is [product&#x2F;author] a scam?&quot; in order to get people to click their search result link. This page will apparently actually commend the product and then earn affiliate commission if anyone clicks to buy.<p>We&#x27;d hope they have legitimately aquired opt-in mailing lists to promote our offer to, but we simply won&#x27;t know. I&#x27;ve seen lots of big brands such as 1-800-flowers use affiliates heavily to drive their promotions. Perhaps those big brands are only making affiliate deals in an extremely quality controlled manner, rather than opening it up to any affiliate that is interested?<p>They are willing to arrange this for us for free and share 50&#x2F;50 in the upside with us, so at least that tells us they have some genuine intention of getting us real sales.<p>Is our caution misplaced? Could anyone share their experiences with using affiliates please?
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gotrythis
Hi.

Yes, you can make loads of money through this method. I once launched a
product and did $300K in the first week of sales and created a 10K list, all
driven by affiliates, all from scratch, offering 50% commissions to
affiliates. I got most of the affiliates myself through networking at
marketing conferences and also had an affiliate manager, who helped get more.

Normally an affiliate manager works on a 10% commission, though that is just
recruiting and managing affiliates - I don't know what else they are planning
to do for you. I question 50%, but if your product needs to be positioned
better, sales site done, etc, perhaps it makes sense. If all they are doing is
putting you on ClickBank, then you are being hosed. A really good affiliate
manager is in high demand.

The "scam marketing" thing is accurate, though 95% of your sales will probably
come from the top 20 affiliates, so you can simple work directly with people
who are likely to be the op 20 and set your rules and exclude everyone else.
You can also make it very clear that if certain rules are broken, commissions
will be forfeit.

It's preferable to use your brand name as your affiliates will build it up for
you. Good affiliates will provide honest reviews and add value. Bad affiliates
will hurt your brand.

Slightly unrelated, udemy.com might be something worth looking into.

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srgseg
Their pitch to us was that if we just placed our site on ClickBank, then it
would be ignored due to lack of track record. However, they said their
relationships could get us noticed by large affiliates from day one.

Does this sound like they can offer us something far beyond what an 'affiliate
manager' would do for a 10% share? They will not be helping us much at all
with copywriting/positioning etc. They say most of their value is simply in
their relationships.

Is it true we will be mostly ignored if we try and put ourselves on Clickbank
without their help?

Do you have any tips on finding an affiliate manager?

Thanks, much appreciated!

~~~
gotrythis
I just asked a contact who works at ClickBank. He said it depends on if it is
a fairly competitive niche or something less mainstream, and if it is is
fairly competitive, it will get lost among all the other products in a big
niche, as people only look at the first couple of pages of results when
looking for products. The main takeaway is that there is "basically a zero
chance it will just get found and picked up by affiliates without an affiliate
recruitment strategy."

He also agrees that "someone asking for 50% is WAY too high" (his caps) and
agrees that 10% is more like it, though many affiliate managers also look for
a flat fee in case the product doesn't take off, so there is that risk to keep
in mind - though it still doesn't seem right.

Here's some things to consider:

1) How long do they get 50% of sales? Forever? Do they keep recruiting forever
too? Put a time-limit on this, or an income cap so you can build your business
later.

2) Make sure that it's a percentage of sales AFTER commissions, not before.
So, like 50% of the sale goes to affiliates, 10% to the affiliate manager, 40%
to you, out of which you pay processing costs, etc. Perhaps negotiate it to be
after costs as well.

Finding an affiliate manager is hard as they are in demand if they are any
good. And what you described is the bare minimum job an affiliate manager does
for 10%, though if you can't find anyone else, and they make the difference
between success and failure, 50% of something is much better than 0% of
nothing.

The short answer is you'll need some way of driving traffic and affiliate
marketing is an incredible way to do get quality, warm leads delivered to your
site in a hurry. However, good affiliates often/should want to know how well
your site converts before sending traffic, so they don't waste an opportunity
to sell something else to their list or otherwise don't waste their time,
which means finding a way to test it first - like as you planned with adwords.

I could go on about the right way to go about things for hours, but hopefully
this is somewhat helpful. If you want to find another affiliate manager,
network at Internet marketing conferences.

~~~
gotrythis
Terminology correction:

This person is a JV Broker, not an Affiliate Manager. An affiliate manager
recruits new affiliates, communicates and motivates your current ones, etc. A
broker connects you with their network.

Another question to ask, is if they have any success stories that would merit
a 50% cut. If they are cutting their teeth on you, you shouldn't be paying
premium rates.

~~~
srgseg
Thank you so much for taking the time to educate us on this.

We're going to take your advice and find ourselves a JV broker that can do
some quality control and help us safely build our brand.

We're not sure where to find one, and no-one is advertising on google for the
term "joint venture broker", but we're hoping if we talk to a few big digital
marketing agencies that we can get a connection somehow. We'll also try
networking at conferences as you've suggested.

~~~
gotrythis
You're welcome. Drop some contact info here and I'll get in touch.

~~~
srgseg
Thanks! Please do contact me via srgseg at yahoo.com (temporary address so it
doesn't matter if it gets spammed by crawlers)

