One of the top questions I've been asked over the last 12 months is:

"how can I start an affiliate network?"

Unfortunately, there's been few options.

One of the big issues is that not only is it hard to get merchants AND affiliates to sign up when you have nothing to offer each other (chicken and egg problem), there's also a fairly high cost to set up the network itself.

Whereas the affiliate platform industry is quite fragmented, the affiliate network platform niche has been left to a few big players and some specialty script vendors.

The options have been

• build your own (expensive, e.g. CJ, Shareasale, Clickbank)
• sign up with DirectTrack or LinkTrust (each more affordable)
• give up

Until now.

There's a new player in town, and they're offering a white label affiliate network. There's no cost - until you reach a certain level.
 
With this low barrier to entry all that's left is your motivation and building of certain relationships - see interview link below.
 
I think this will open up the market even more for all of us. I see more specialty networks starting, as a result. e.g. someone might start up a network for just "family legal services" or "women's healthcare products" - so that the affiliates in that niche are attracted to the economies of scale that a network can offer them.

Getting some ideas?

I just interviewed Peter Hamilton, of Adappsolutions and you can catch the full interview (no charge) here - see link below.

The interview covered some great topics for anyone into affiliate marketing, and they're listed on the page below.

There are 2 parts.

Part 1 is below and to get the extra bonus Part 2 you simply subscribe for free to get a member account, login, and return here.

Part 1 (19 minutes) - Transcript below

• All about adappsolutions' launch of hasoffers.com
• Their unique marketing strategy
• Their product Audience, pricing
• Tips on starting an affiliate network

Listen:

Download (mp3)

Free Bonus Part 2 (13 minutes) - ^GroupText("Visitors",Link will appear below, See link below);

• How any online merchant can use this
• Current clients under the radar
• Catching fraud
• Contest re winning hasoffers pro
  

^GroupText("Visitors",For Part 2 Register here and login + return to this post, Thanks for logging in. Get your full access to Part 2 for subscribers here);

Part 1 Transcript

Peter Koning: This is Peter Koning from Affiliate-Software-Review.com, and I have with me today Adapp Solutions. I have actually Peter Hamilton from AdappSolutions, who's in charge of their marketing and support. We're going to be talking about an exiting new offering that they have that has to do with creating affiliate networks. I'm not going to give away too much. There is also a cool offer that I noticed on their website, just today. It's a little contest that they're having, as far as the first network system that reaches a certain limit. We'll get to that during the call as well. So, anyway with no further ado, welcome to the call, Peter.

Peter Hamilton: Thank you, very much.

Peter Koning: I'm really excited, actually, about this call, because I've been running my Affiliate-Software-Review, sort of authority site, for a few years now. One of the most common questions that seems to come up quite often is, "How can I start my own affiliate network?" There really hasn't been, up until now, a lot of different options. There are a couple of big players out there that are running most of the large CT networks. And then there is a couple of small, sort of script vendors. There hasn't been really anything else.

So, I'm really excited about this call. I have a bunch of questions here for you. But before we get into the HasOffers platform, maybe you could tell us just a little bit about yourself and how you fell into this position. Then, tell us a bit about the company itself.

Peter Hamilton: Right. Sure. I've been working with web applications and online marketing now for about four years. I joined up with Lee and Lucas Brown about three months ago, to get started on this new platform that they wanted to develop. Lee and Lucas have started a technology-based company called Adapp Solutions, where they intend to provide many different applications that are web-based and possibly, also, downloadable for everyone who's involved in online advertising, whether that's at the affiliate level or if they're merchants, advertisers or even networks. Yeah, so we decided to get started first on introducing ourselves into the space by releasing a network application that is very accessible, user friendly and with a low barrier to entry.

Peter Koning: So, can you tell us a bit more? This is HasOffers.com you're talking about, obviously.

Peter Hamilton: Yes. Sure, yeah. With HasOffers.com the basic idea is that it's a white label system, fully-customizable, online application that can look like your brand and look like it's completely integrated into your website and your current network. It gives you all the tracking support that you need and abilities to manage affiliates and to manage offers - well, all the features you need to do those things efficiently and successfully, and to make sure that nothing is falling through the cracks. It also helps you to update and adjust your network in real time, because all of our statistics are coming through in real time.

Peter Koning: Now, most of my visitors who come to Affiliate-Software-Review are looking for the ability to start their own affiliate program. But this is really at a whole new level, isn't it?

Peter Hamilton: Correct, yeah. We definitely are targeting people, at the beginning here, that already have networks, people that are just looking for some other software solutions. As you said before, Peter, there are several other major players in the industry. Some of them are at fairly high cost, and there's a fairly sizable financial barrier to get into those things. And then, also, there's a scalable cost that's associated with using these other applications. We wanted to make something that people that have been involved in the affiliate marketing industry for a while, whether it is at the network level or as affiliates, can easily make the switch over to a new platform that is up-to-date, that is sort of stepping out of the Stone Age and moving us on to the next level, [laughs] and also doing it in a way that is at low cost to get started.

Peter Koning: The cost is low. I mean, it's free, is that correct?

Peter Hamilton: Correct. It's especially true because this beta phase, we wanted to make sure it was completely free to everyone. And people that signed up during the beta phase, it will always remain free. There will never be any additional cost for those people. We did come out with some new pricing structures, just recently--actually, yesterday--because we've found that some of the larger networks are really wanting the security and reliability of knowing that they have their own dedicated server for their system.

And in order for us to automatically implement that, we do need to have at least some cost. So we've created what's called the HasOffers Pro version. So, up to a million clicks, when people are not so worried about having a dedicated server, it's still completely free. And we decided people that are out a million or more are probably going to want that security and that level of reliability, so we've created that Pro version for people who are above that amount of click volume.

Peter Koning: OK. So, if you're on the free version, you're running off the same server as other free customers, I assume.

Peter Hamilton: Possibly. I mean, it depends on when you signed up and who came on at the same time and how much hardware we're throwing onto our system. We're obviously going to make sure that you don't have a problem. [laughs]

Peter Koning: Right.

Peter Hamilton: But just for the peace of mind for some of these larger networks, they like to know that they're on something that's dedicated.

Peter Koning: Yeah. If someone's doing like a million clicks, you can assume that even if their offers are converting pretty poorly, and they're maybe making even one cent per click, which is pretty sad, right? [laughs]

Peter Hamilton: Right. Right.

Peter Koning: That'd be like $10,000 a month that they'd be generating.

Peter Hamilton: Right.

Peter Koning: Even at that level, which is extremely conservative, at one million, they would easily justify paying up...

Peter Hamilton: Right. We really believe so. We're charging $799 a month for the Pro version. And it's not scalable, so once you've crossed that million-clicks-a-month barrier, you go to 10, 15, 30, it doesn't matter, you're still paying 799 a month.

Peter Koning: OK. And now, as far as the variable costs. Typically, at least if you're an advertiser and you're in a network, there is some fee that you pay based on the actual revenue that you do. Do you have any of that in your Pro version calculation, or is it strictly really just to justify the hardware costs and there is no variable cost based on revenue?

Peter Hamilton: There is no variable cost based on revenue at all.

Peter Koning: OK.

Peter Hamilton: Yeah, we think that that's not really necessary. And we want to introduce ourselves into the space in a really great light, and provide something that's really robust and helpful and not be trying to take our slice of the pie here at the beginning.

Peter Koning: Right.

Peter Hamilton: We really feel like we are a new technology in the space, and we want to create a great rapport, and we think this is the way to do it. We will, as time goes by, introduce new products, for affiliates and for advertisers themselves and for the networks, some that might be internal, with something like HasOffers or another application we create for affiliates. Or they might be totally external tools. And some of those will be paid, and some of them won't. We'll just continue to try to build our tool sets and increase the value of our brand and show people that we create fantastic technology for this space.

Peter Koning: Now, from everything I've learned over the years in this space, as you know, it's a huge industry. It's growing. It's probably one of the best-growth industries, even with the economy as bad as it is when we're doing this recording.

Peter Hamilton: Sure.

Peter Koning: There's big growth. But there's also a ton of different technology solutions. I mean, it's very fragmented. At least on my website, I've got over 90 different options. If someone wants to start an affiliate program, they can go with a network, they can go with a script, they can go with a hosted version. Now there's the sort of build-your-own-network niche that you're playing in. Of all those different solutions, is there sort of one area that you're really trying to carve out a niche in? Because I'm just thinking, if I'm in a software company selling some affiliate-tracking scripts, for merchants that want to just set up their own little private affiliate programs, is this a threat to me, or is it more of a threat to some of the bigger players that are out there creating affiliate networks for their clients?

Peter Hamilton: Well, there are a lot of things that go into having a successful affiliate network, obviously. And we think that the things like relationships with the right merchants and the right affiliates should be the things that make you succeed and the things that separate great networks from not-so-great networks. We don't think that, really, the technology should be the barrier. And to a large extent, it sort of has been, over the last several years. A lot of people that could very well produce fantastic networks aren't doing it because they don't really want to shell out the cash and also split up their piece of the pie, just for the platform.

So, yeah, it's important to us that those people are empowered. And we think that that's only going to enhance the industry, as a whole. It's going to allow those people that have created some new relationships with possibly new merchants that haven't even entered the space until now a place to put their offers, and a place for the great affiliates out there to come and snag those offers. And these networks that start up if they're new ones with new merchants, they'll possibly develop relationships with other networks and maybe get bought out. I think it all sort of adds to the overall value of the industry.

Peter Koning: You're not really taking away something, you're just building on to what's already there.

Peter Hamilton: Right. I like to look at it as similar to what happened to the music industry, with people being able to do recordings at home and not necessarily needing big record labels all the time. It hasn't totally destroyed the people that really have fantastic connections in the music industry. Those people are still very powerful and always will be. But what it has done is make a medium of finding out about so many new things out there -- new bands and new phenomena that are happening and the major players and see the phenomena happening and they can do something about it.

So it's not that it's creating necessarily more competition for networks but just providing more people with the opportunity to provide more offers and for more merchants to be reached and for more affiliates to reach those merchants.

Peter Koning: OK. That's the way I was thinking about it as well. That it's not really a zero sum gain. It's contributing to the overall industry.

Peter Hamilton: Right, right. And providing the technology to do things right is going to be important for everybody. It's going to be important for everyone. It enhances the trust of affiliate marketing as well; making sure that there's not some kind of shady scraping going on or some sort of manipulation of clicks. And having fantastic fraud detection and making sure that you know from both ends that the advertisers' numbers are matching up with the affiliate numbers.

Peter Koning: You mean there are shady things happening in affiliate marketing? [laugher]

Peter Hamilton: Oh no, I wasn't saying that. [laughter] Oh no, no.

Peter Koning: We'll get into fraud in a minute because I actually wanted to get some of your input on how a merchant can prevent fraud. I guess the one question I have is if someone is looking to set up an affiliate network - let's say they have some really good relationships with a few merchants; those merchants, they have products; they're converting well and maybe a couple of them have had their own private affiliate programs, and this person maybe knows some really good sources of traffic so they could approach those as affiliates - and they're basically ready to start up a network.

This sounds like it would be a really good solution for them because it's kind of cracking the chicken and egg problem that a lot of affiliate producers have. They can't really approach the affiliates because they don't have the networks up, they don't have the merchants in there. They don't have merchants because they don't have affiliates, right?

Peter Hamilton: Exactly.

Peter Koning: So this would be a great way to get started but I guess my question is: as you know and as you mentioned earlier it's not just the technology and it's not just the relationships either, there's other things you can do or other investments and plans they should have around your whole affiliate strategy. What kind of advice would you give someone that's got the ideas, they've got the relationships, maybe now they're willing to go ahead with your platform. What else do they need to do to really be successful in this place?

Peter Hamilton: Sure. Well I think in this industry testing goes a really long way. So if you have a relationship or a few relationships with some great merchants who have some interesting ideas for offers, help them test these things, possibly at no cost. Just get it started. If you have any kind of capital in that way that will help you tremendously to be able set up their offers on your system. Contact these affiliates that you have relationships with and say, "I want to try out these new things. I want to test this and see what kind of conversions we start to have." We can show these merchants, "This is a viable source of income."

If you can do that in any way, there are many different ways you can go about that in trying to test these offers. You are going to have to work with merchants to show them, "My network really can bring traffic. And you might have to be a little bit creative, and that is for a lot of people, sort of the hump. Trying to figure out how to build trust in that way.

From my experience so far, in talking with various affiliates, they are willing to play around with some of these things with you if they are going to become profitable.

Peter Koning: It goes back to the relationship because at the same time you are building trust and relationships with both the affiliates and with the merchants.

Peter Hamilton: Exactly, it goes both directions. And some of these affiliates might also be willing to work with you, knowing that they are going to be first in line for these offers as soon as the merchant is convinced that this is a really viable way of getting their brand out there. That is definitely a big part of the game. Trying to figure out how you can introduce these two people, the affiliates and the advertisers to each other in a way that shows both of them, "Hey, this is going to be a really valuable thing, lets try it out for a second and then lets let it go."

I would highly recommend that sort of thing, if you can get any offer on board and get some affiliates testing it out, or even using it and getting some great conversion on it. Then obviously now you have a whole base, a whole set of statistics you can show new merchants and new affiliates.

It is just getting that first one going and getting some statistics formed. You can't really argue with statistics. Trust definitely goes a long way, but if you can show someone some hard numbers they are much more likely to want to be a part of your operation.

end Transcript Part 1

Part 2 (13 minutes) - ^GroupText("Visitors",Link will appear below after login, See link below);

• How any online merchant can use this
• Current clients under the radar
• Catching fraud
• Contest re winning hasoffers pro
  

^GroupText("Visitors",For Part 2 Register here and login + return to this post, Thanks for logging in. Get access to Part 2 for subscribers here);

--- (Edited on 8/5/2009 3:48 pm [GMT-0500] by Peter) ---