There are over 10 million active online shops in the world, and over 800.000 in Europe. The online shops are dispersed all over Europe, a great share of these online shops belongs to Germany, United Kingdom and the Netherlands.[1] The large number of online shops put the individual online retailer in a unenviable position, meaning they have to find methods to increase the recognisability of their online shops.

There are many methods, and one of the better models from various perspectives is the implementation of the Affiliate Marketing Programme or Affiliate Partner Programme. This model can be used in the product as well as the service sector, regardless of the number of products or services in the online offer. The Affiliate Partner Programme can be introduced not only by the classic online retailers but also by the manufacturers of consumer goods as well as law firms, which market their services online, and also by translation agencies, advisory services, financial funds, insurance companies, publishers, restaurants and others, who had the knowledge to design their services as products or sales packages for selling their services online. Some characteristics of this affiliate marketing model are presented in more detail below.

 

Affiliate Marketing Gateway vs. Affiliate Marketing Software

 

Affiliate Marketing Gateways

Due to the increasing popularity of the Affiliate Partner Systems among companies as well as natural persons in the last years there has been an emergence of more or less quality Affiliate Marketing Gateways. These gateways connect advertisers (also called merchants / vendors / sellers) on one side and the interested publishers (also called affiliates / affiliate partners / referral partners) on the other side. These types of services simplify the relationship management between the two parties as well as increase their recognisability. For advertisers (online sellers) this mean:

  1. they no longer have to concern themselves with contractual relationships with individual affiliates, considering the contractual relationship is concluded between the marketing gateway and the affiliates;
  2. they have a choice of numerous potential affiliates within the gateway service (usually there are several thousand interested affiliates registered in the gateway, who are specialised for the promotion of various types of products and services);
  3. they can invite additional affiliates of their own choice to register in the gateway to promote their product or service, while the management takes place via the marketing gateway, which was chosen by the online seller as an intermediate between the two parties.

Affiliate marketing gateways usually offer free registration to the affiliates (publishers). The registration of the affiliates is usually conditioned only with the existence of marketing and sales channels and affiliate's website or blog, which both can be used by the affiliate in the promotion of products and services. Some of the gateways limit registration to affiliates considering their geographical location or country, and on rare occasions they request also a formal business status of the affiliate.

On the other hand, there are many differences regarding the registration of an online seller (advertiser) in the marketing gateways, particularly in the field of acceptance conditions, gateway's functionality, potential advertising and rewarding models and fees charged for gateway services.

Usually the more expensive gateways with more demanding online seller's acceptance conditions prove to be of more quality. There are also many gateways available with cheap products in their portfolio, which could decrease the value of your products and services. Therefore, it is necessary to be familiar with a range of possible affiliate marketing gateways on the market, analyse them (not including those, which you fail to register into considering the acceptance conditions) and access the selection of an individual or several gateways simultaneously according to your target market and group strategies, categories and attributes of the products and services sold and finally, according to your abilities to introduce an affiliate programme.

Considering the technical perspective of entering the individual gateway for the online  seller is simple and fast, of course only, if you meet the entry terms and conditions of an individual gateway.

 

Affiliate Marketing Software

Affiliate Marketing Software enables you to manage the affiliates and their promotion of your products or services entirely on your own. This means you manage:

  • the technical implementation of the affiliate marketing software activation (own development, rental of developed cloud solution or an installation of a purchased plugin or another software solution on your own server);
  • contractual relationship with affiliates, as well as
  • commission payments to the affiliates.

The independent management of the affiliate network should be performed in accordance with the legislation, e.g. if the affiliate partner is a natural person you must consider the legislation in the field of labour as well as taxation. The complications may arise if this natural person is located in another country. The technical implementation is not demanding, at least not, when you rent already one of developed solutions available in the cloud or your online shop is developed in one of the widely used software, such as Wordpress/WooCommerce or Magento, as they all have available many plugins and their installation and use are relatively simple.

In case of independent management of affiliates, you also have to be concerned with, whether your affiliate rewarding system is noticed by those, who would be interested in the promotion of your products. Of course, you can leave this to coincidence and patiently wait for the interested persons to notice your post or an invitation into your affiliate marketing programme on your website; or you can actively approach the issue via advertising on online social networks or via other, more direct, methods. Without your proactive role the success of this independently managed affiliate programme is questionable.

 

Choosing the "affiliate gateway" or the "independent software solution"?

 

WOTRAguidelines enAll of the above listed possibilities introduce a question on how to select the most suitable model, gateway or software solution for you. Many options depend on your currents situation, the country of your company and online shop presence, targeted groups and countries, categories of your products and services, affiliate commission rates, which can be intended for affiliates, quality and traffic of your online shop, etc. If your online shop holds a very narrow selection of services or products, or your online shop is poorly visited, your choices of selecting the gateway are usually limited. Many quality gateways condition the acceptance of the online seller with the number of visitors to the online shop or with the selection of products or services sold in the online shop. There are many gateways and there is a solution to any example. When this is not an option the solution is the independently managed affiliate system, i.e. independent software solution. However, none of the models are free-of-charge. The individual gateways and solutions differ in the price, as well as the payment methods.

 

All of the mentioned once again confirms the need for a systematic analysis of the options and a planned selection of the most suitable solution or in some cases the available gateway for your specific case or the selection of any other solution.

 

For more details, please see the "Guidelines for Introducing the Affiliate Marketing Programmes to Increase Online Sales" available in our bookshop. We also invite you to contact us by phone or "Enquiry Form" for additional information and assistance in establishing the affiliate marketing system for the needs of your online sales.

  

[1] Source: Ecommerce News Europe

 

Services

As regards the development of the ecosystem of modern online shop and digital sales channels, we also offer consulting services tailored to each client, including:

  • designing and developing an online (and/or traditional) sales strategy for an individual client, taking into account the diversity of sales channels and, where appropriate, for a particular purpose, an individual product group or service, an individual market and/or target group;
  • reviewing and evaluating the existing solution and preparing proposals for renewal or improvements;
  • taking over the management of an online shop development project in your company;
  • co-ordination of the development or renewal of the online shop with a development team;
  • mentoring your team in the process of online shop development or its renewal.

For more information on our additional services, visit the WOTRA website.

About the Author

Irena Rezec, M.Sc., MBA

IR 400x400Irena Rezec is an experienced expert with more than 30 years of experience both in the public as well as in the private sector in Slovenia and abroad. She has gained experience and knowledge in the field of information solutions development, entrepreneurship, European and global business ecosystems, business collaboration and partnership approaches as well as in internationalisation of companies, all by obtaining the University (information systems) and Master's (international management) degree, by managing the Euro Info Cenre in Ljubljana (currently titled Enterprise Europe Network), by cooperating in various working groups in Slovenia and abroad, and within the last 16 years in the role of the Managing Director of the company WOTRA also by implementing a big number of consulting projects and seminars in Slovenia and other countries in the world. For the past 16 years, she has also regularly evaluated EU project proposals (EU H2020, URBACT, and other EU funds) in the fields of ICT and industrial clusters development, and occassionally in the field of urban and rural economic development.

In addition, she was in-depth training in:

  • collaborative relationships and partnership management (Rhythm of Business, OECD, Chamber of Commerce of Eastern Flanders);
  • open and systematic innovation (CREAX, ECSB);
  • digital marketing and online sales channels (Amazing);
  • regional economic development (Flemish Government, OECD, InWEnt Germany, Assembly of European regions);
  • quantum techniques (Tadej Pretner);
  • systemic dynamics in organisations - systemic constellations in business (a licensed faciliator certified by the Institute for Systemic Constellations Slovenia in cooperation with Bert Hellinger Institute of the Netherlands).

Among others, she is a member of:

  • Advisory Board of the Cluster House – an umbrella organization of the Balkan and Black Sea Cluster Network;
  • TCI Network– The Competitiveness Institute Network;
  • Association of Industrialists and Entrepreneurs of Slovenia which is a member of the ICIE Congress – International Congress of Industrialists and Entrepreneurs;
  • ERENET – Entrepreneurhsip Research and Education Network of Central European Universities.
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