An Affiliate or Partner program is a great way to build your own marketing and sales channels and to develop a network of advertising partners. Every online business must have an affiliate program as one of the methods it uses to market itself.

As an online business owner you have two ways in which you can start an affiliate network. You can join an affiliate network (such as Commission Junction or Linkshare ) or run your own  affiliate program.

While joining an affiliate network is easy as they deal with all the payouts, requires no infrastructure or investment in software on your part and gives you rapidly access to an affiliate partner network through their internal promotion, it has some drawbacks that we feel are objectionable enough that we favour the in-house option, even though it is more work and slower.

We've listed the things you need to consider before you go the affiliate network route and provided you with a shortlist of the features you should look for when choosing an affiliate tracking software with which to manage your own in-house affiliate program.

What's not good about affiliate networks

Affiliate networks charge setup fees and take profit from sales. This means you have less money to pay to your affiliate partners. Let's face it, they do a mountain of work for you for no cash up front. As the owner of an affiliate program you want to funnel as much profit to them as possible.

Affiliate networks are a middle man and can change their costs. When this happens, it can put your whole affiliate marketing strategy in jeopardy. When charges go up, you have a few choices. Reduce your profit. Reduce the affiliate partners profit or pull out of the affiliate program and start all over again.

When you use an affiliate network the affiliates are not yours, they belong to the affiliate network even if you recruited them. So you do the work of building and adding affiliates and the network makes the profit. When you use your own in-house system, you own the affiliates and you and your affiliates profit more greatly because you can afford to award higher commissions.

Relationship are just as important with online business as they are offline business. When you use an affiliate network, your access to affiliates is limited if not totally restricted. It makes sense, they must do this. Any other way and your and your affiliate can by-pass them in an out of network deal. When you are in direct contact with your affiliates you can become more interactive, exchange ideas and draw upon the collective experience. Your affiliates can network with one another, ideas can blossom and motivation flourishes.

Considerations for Starting an Affiliate Program

Affiliates are a valuable resource and should be treated with respect. Don't treat them as Test Crash Dummies. They work hard for you and for little reward, so make sure that you invest in them and in improving your website. Make sure your website converts visitors to sales and keep striving to improve your conversion rate. If your website does not convert, then you are wasting their time and money and wasting your own time and money on bandwith.

The affiliate scheme is important. Give careful consideration to what your competitors are doing. Are they paying a higher commission, are they getting more traffic? Al these questions are important. Remember, you don't have to pay the higher commission if your website gets more traffic and has a higher conversion rate than everyone else. The traffic to conversion ratio being higher, most affiliates will partner with a merchant who pays a smaller commission, in favor of volume.

What should your affiliate tracking software offer

There are many affiliate tracking and management programs on the market. Deciding which to use can be a challenge.

In general you can go two routes when choosing an affiliate tracking software. You can choose a hosted and managed solution or you can choose a purchased, self-hosted and managed solution. There are pro's and con's to both, but generally your supplier should be able to offer both options.

If you choose a outsourced solution, then you will most likely have all the features and functions of a self hosted and managed solution, but you will not have the same level of flexability as when the program in installed on your own server.

You will also have some ongoing costs as you the service provider will have to cover some costs. The good thing here is that you do not need to know how to install, upgrade or manage the technical aspects of the solution. So if you are not technical or don't have access to a techie, then this option may be cheaper for you in the long run.

If choose the self-managed and hosted route, then you will have to install, maintain, configure and manage the solution by yourself. You also need to provide the disk space, database and everything else to do with the software. That said you will have greater flexability and ability to implement tweaks much faster and without having to wait for somebody else to it.

There is also the comfort of knowing that your costs are limited to the price of the software or the license fee. You own the software and you can choose whether you are going to spend more to upgrade it or not. That said, you will need to have some technical knowledge and understanding to install, configure and maintain the system. If you are a techie or have easy access to one, then you may find that the cost benefit of the self-hosted and managed solution is more cost-effective for you.

The reason we said, “your supplier should be able to offer both options” is because you may find that you will need to adopt a mix of both hosting options in your business, especially if you have multiple websites, or if circumstances change such that you need to adopt the other option to that which you are currently using.

An affiliate tracking software is a complex system with an expansive feature set. However, there are some features you MUST HAVE and some that are NICE TO HAVE. We've looked at and tested a number of affiliate tracking offerings. There are some great packages out there, but we looked for two main things:

• Feature set (as discussed here)
• Price (especially the entry price)
• Support
• Familiarity

Just like everyone else, we like to get the best bag for our buck and after everything we like to recommend the iDevAffiliate tracking system .

When it comes to feature set, iDevAffiliate has everything you need to run and manage your own in-house affiliate program. The other options out there either do not provide the breadth of features and functions or do so in a user interface that is poorly designed and difficult to work with.

We also like iDevAffiliate because it is stand alone, yet has integration with the Joomla Content Management System and a whole host of shopping carts. You can also use a single instance of iDevAffiliate to provide affiliate tracking for multiple websites.

The nature of iDevAffiliate is modular in nature. You can get the iDevAffiliate Standard for under 100 bucks and add on other features as you see fit and when you need them. No matter which option you choose, you are assured of customer support which is managed using a property issue tracking system.

Lastly, iDevAffiliate is the most popular and most frequently used affiliate tracking software on the market. Because of this affiliates are already accustomed to using it. You don't, or seldom ever have to provide support to your affiliates on how to use iDevAffiliate because they have ten to one encountered and used it before.

I'm not going to go further into iDevAffiliate here in this article, you can visit the iDevAffiliate website for more information about it if you wish. I hope this article has been informative and will help you decide on whether you want to build your own affiliate program or use a network. I also hope that it has given you some idea of what to consider before you start an affiliate program and some idea of how to choose an affiliate tracking software.