My friend's ready to start up an affiliate network, would you like to make some advice for he? He don't know whether he should form a inc or llc in US for the start-up, and he is considering to use PayPal to process all payment. he want a low charge and low cost network. He also need a low cost but credible support team or individual, to full admin and support the network, such as reply email, enable/disable affiliate and merchant, help install/test track code, etc. http://supportresort.com/plans/support/standard.html seem too costly for the start-up, and he don't need such 24/7 full support. and don't know about http://www.hudsonsoft.com/ , is such services worth it? or just deal with individual? should they make a bargain or escrow? BTW, is it possible to pay them a of percentage of net profit of the network(don't include server fee, marketing cost, ...)? About Term and Privacy for the network, is there any online group do that, or have to get a lawyer? A survey: What makes you, as a Merchant or Affiliate, want to join an affiliate network? Should it be backed by a company? Should it have decent design? Should it have different or expected function? Would you accept an affiliate network that send and receive payment by PayPal only? Do you have any desire on Term or Privacy? What role you want the network play? process only the basic technical problem? process dispute fitly? support any question and matter? As a Merchant, how much one time setup fee, monthly fee, transaction fee and minimum deposit amount you would like to see? if you are a Affiliate, how it's set you would like to see? would you have any thought about that? As a Affiliate, how much minimum payout amount, payout options and time you would like to see? if you are a Merchant, how it's set you would like to see? would you have any thought about that? Thanks in advance (And do you think he will get any net profit?)
my recommendation is to signup with www.cj.com and see how they run affiliate programs. this is a good business to model
I'm considered sort of a guru in the industry and knowing all I know, I would not start an affiliate network for all the money in the world. If you paid me 500,000 I would not start one and not even for 1 million. I have been involved with and/or tried to help launch some other affiliate networks that were backed by BIG industry experts and they could not even pull it off. I don't think theres money in it (at this stage) there are already too many networks plus it does not sound like he's willing to spend money to do it right and it does not sound like he even knows this game. If nothing else gets in the way the chicken vs the egg syndome will. What's that you ask??? You can't get enough affiliates until you have enough merchants, in the right categories and enough of them. BUT you can't get the merchants until you have enough affiliates. It's a tough game. Give me a million to play with and I still wouldn't play in that space!
So I asked "do you think he will get any net profit?" I just found some of them put AdSense on their site
Affiliate Networks like ShareASale, CJ and Linkshare are making a good amount of money. But I also agree with you in that these are top networks and getting one started these days are much harder than what it use to be mainly because merchants prefer to go with the networks that is already well established on the web.
Yeah, the real problem is that it is difficult to start, not because you can't give something that people (both publishers and advertisers) want, but because it is very difficult to make them believe you. I've decided to create an affiliate program - mini network - for some products I am going to release in 2007, and I took this decision because I allready have many publishers that trust me as a proffesional so I know that I will have some response. If you don't have something similar, then you need a lot of money to start and even this way it wont be easy.
Nikolas nailed it! The problem with starting an affiliate network is making mainstream affiliates & merchants give you a chance. I have a "private" affiliate network where I place private offers and deals... that's a good place to start.