Heres How To Build Affiliate Network in 7 Steps

Ad spending can be a costly investment, setting businesses back at least a couple hundred bucks a month. Even then, conversions are not always guaranteed. In many cases, they end up getting lots of impressions but very few sales.

Instead, businesses turn to affiliate marketing as a way to cut costs. This approach allows them to pay affiliates a commission only when they drive conversions, making it a more financially sound strategy. But did you know you can capitalize on this marketing strategy by building your own affiliate network?

Continue reading to learn how to build an affiliate network for a business opportunity step by step.

What Is an Affiliate Network?

An affiliate network is a place for brands and affiliates to connect for mutual benefit – brands get more exposure, and affiliates earn money through advertising. It’s different from affiliate software where you only track the results from campaigns.

What makes affiliate networks so popular? One reason for their popularity is the type of customers it attracts. Affiliates already have an audience interested in their content, including product reviews and recommendations. So, when an affiliate sends a customer your way, this customer is pretty much ready to buy. They’re also more likely to turn into regular customers and leave positive reviews.

The numbers don’t lie. According to a 2023 Matter Communications survey, 69% of respondents are more likely to trust a family member, friend, or influencer they follow for product recommendations over the brand itself.

How Affiliate Networks Work

In an affiliate marketing network, a brand owner works with an affiliate who promotes the brand’s products through their content. The affiliate network usually creates custom links, monitors progress, and handles payments for affiliates, but these responsibilities can change from one network to another.

Affiliates are free to join an affiliate network, but advertisers usually have to pay a fee for every affiliate they acquire or a percentage of every sale they make.

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Step 1: Define Your Affiliate Network Goals

So, you want to build your own affiliate network from scratch. To make it happen, you’re going to have to focus on measurable and doable goals and stick to them.

First, decide the type of affiliate network you want to create. If you work in a particular niche, this is your chance to start a business in a field you’re familiar with, for example, fashion or travel. If you want the network to be broader, you’ll have to compete with many other affiliate networks since most of them act as general marketplaces.

Once you’ve chosen your niche, you can set KPIs you want to achieve in a certain period. Here are a couple of examples:

• Onboard 30 advertisers in your niche within the first three months

• Recruit 300 affiliates in your niche within the first three months.

The network growth is going to be slow at the beginning, but as more affiliates and businesses join, the more popular it will grow. Consider building an affiliate website to reach more affiliates.

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Step 2: Identify and Attract Quality Affiliates When Building Affiliate Network

This step is key for beginners to affiliate marketing. If you want to attract the right affiliates, we suggest you start where you live. Ask yourself these questions:

• Are there popular influencers living in your area?

• Who is famous on social media where you live?

• How many partnerships and how much engagement do they have online?

This doesn’t mean you have to keep your affiliate pool narrow, but it’s easier to start building something in a familiar environment.

Once you’ve chosen a couple of affiliates you’d like to recruit, you’ll have to win them over. Mind that it will be much harder for you to offer competitive rates just yet, so you’ll have to use other tactics as well, such as early access to high-paying affiliate programs or a bonus structure for the most successful affiliates.

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Step 3: Choose the Right Affiliate Tracking Software

Once you build an affiliate network framework and find affiliates, the next step is to set up affiliate network software. Affiliate software features a dashboard that lists the latest performance stats and shows how much you’re spending as you manage the affiliates.

Offer18’s all-in-one tracking software features chat integration, which keeps affiliate communication within the program. In addition, you can conveniently receive invoices directly in the software and send out payments through all the major payment gateways.

We also include fraud detection in our software to prevent your affiliate spending from going toward clickbots and fake leads. Use our click Spamming Defender to identify programmed clicks and our Traffic Source Validator to reject traffic from bots and more.

Finally, we give you the option to create affiliate tiers to single out and reward your highest-earning affiliates. This will also help incentivize those who make fewer sales, as they’ll have to pass sales and lead milestones for higher commissions.

We offer a free trial so you can test our software before launching your network.

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Step 4: Establish Competitive Commission Structures

This is the step you’ll find the most difficult as you build the affiliate network. While every affiliate network has its own commission structure, there are some general considerations when setting prices:

• Benchmark against competitors to understand the industry average, which will help you set your own prices.

• Analyze your profit margins to get a better idea of what you can afford to pay the affiliates without going over budget. This will help you establish a sustainable pay structure, like Pay per Sale or Pay per Lead.

• Factor in special offers like recurring or lifetime commissions for high-performing affiliates and how much they could potentially cost you.

Once you’ve set your goals, calculated your budget, and established KPIs, you’ll have a clearer picture of what your commission structure should look like.

How to Decide on Commission Rates

For specific commission rates for affiliates, you’ll have to take into account their popularity, conversion rate, niche, and more. For example, high-ticket products have smaller commission rates (around 5%) because they result in a much bigger profit. However, the rate for a fashion influencer may be 10%-15%.

Another thing to factor in is how often people purchase these products. High-ticket items like electronics are rarer than general items like makeup and clothing. You’ll have to find a way to balance this while keeping the affiliates motivated to sell.

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Step 5: Provide Effective Resources and Support for Affiliates

You can teach someone how to be a successful affiliate by providing them with resources to build their knowledge and become a better salesperson. For example, you can provide free courses to affiliates who need help with conversion rates.

The Importance of Marketing Materials

Giving affiliates access to marketing materials is vital for their success. Plus, it will make you stand out from other affiliate networks because affiliates want to work with someone who will support them through their marketing journey and not just watch from the sidelines.

For this reason, make sure you have a section dedicated to affiliate resources with marketing templates, high-quality images, link generators, etc.

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Step 6: Monitor and Optimize Performance

Once your affiliate network is up and running, you’ll have to opt in regularly to see how your affiliates are doing. Here are some things you can do to make this process easier:

Tools to Track Affiliate Success

You can completely automate this step using tracking and analytics software, which will give you:

• Customer touchpoints after conversion

• Real-time insight into affiliates’ performance

• Your spending on each affiliate link, and more.

From here, you’ll be able to analyze your profit against your costs and save money if possible.

Optimizing Campaigns Based on Data Insights

Once you have data for the success of each affiliate, you can work with them to improve their results. For example, if you have an affiliate with lots of impressions but very few conversions, you can help them adjust their strategy to better support their efforts.

Preventing and Detecting Affiliate Fraud

Finally, no matter how good the results you produce, they’ll go to waste if you don’t have a robust affiliate fraud detection system. This software can help you identify link fraud, spam clicks, and bot activity, so make sure to implement it as you build your affiliate network.

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Step 7: Maintain Strong Relationships with Affiliates

Staying in touch with your affiliates is key for long-term partnerships. Here are some ways to get close to your affiliates and create a good connection:

• Create a group chat where everyone can share news and success stories for mutual support

• Send out email newsletters with new features in the affiliate network

• Reward your best affiliates with gifts and cash bonuses

• Help your affiliates find brands to partner with by providing personalized recommendations.

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Building Trust with Consistent Communication

Communication is the most important part of your relationships with the affiliates. And don’t worry about being overbearing – the more information you share with them, the better they’ll feel about your network.

One idea is to have biweekly or monthly virtual meetings where every affiliate shares their pain points, and you can work on resolving them together. You can learn how to build affiliate network relationships yourself by looking up resources and learning new strategies.

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Conclusion on How to Build Affiliate Network

Affiliate networks are an excellent way to make passive income. Instead of running ads on Google, for example, you give affiliate links to social media influencers who come up with an engaging script to get people to buy.

Affiliate marketing is attractive to businesses primarily for its cost-effectiveness. The affiliates don’t get paid until they do, and once the business is paid, you receive a percentage of the sale. This strategy is also time-effective in that it doesn’t require you to sit down and create ads – this is the job of the affiliate.

There are many ways to build an affiliate network, but our 7-step guide is a good starting point. Don’t forget to make proper adjustments that suit your business’s needs, and you should have a productive start.

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FAQ

How much do affiliate networks make?

Affiliate networks can make as little as a couple thousand per month to millions per year. This depends on the scope of the network, the number of brands and affiliates, the niche, etc.

How can I create my own affiliate program?

You can start by setting goals, after which you’ll brainstorm ways to achieve them with specific KPIs for each. Then, you’ll need affiliate software to track these KPIs and adjust your strategies as needed.

Are affiliate networks worth it?

Yes, affiliate networks are worth it because they can deliver quick results at low costs. And as an affiliate network creator, you have the advantage of making money passively by receiving a percentage of each sale or brand you acquire.