Is the cost too high?

[Gajandra D]

Is affiliate marketing costing your company too much. Well there are some smaller affiliate networks that do not charge too much and most often waive the monthly fee. If you wish to make a big splash with the big guns they will also splash out your pockets. I would suggest going with the smaller networks and grow with them and invest some time with your affiliates. Time for yo take a step back and review what affiliate marketing can do for you and what you can do for your affiliates.

[Tephus]

Hmm...I think advertising wise, affiliate marketing is the most cost effective, and cheap medium to market your wares fast.

[Gajandra D]

Affiliate marketing if setup properly can be of help. There are a lot networks aimed at the little guy in need of help. Assuming of course that your product has appeal and there is a market for your products. Pricing your products to compete with the more established merchants also helps. You can always try a low cost network to gauge the growth of your affiliate marketing channels. Try an experiment and then check your progress steadily to see if it is making any real difference. Some merchants get disillusioned when they do not see any real growth and get discouraged real quick. It takes time and effort to promote an y program and don't forget you have to play an active part in the promotions because who knows better that you about the product.

[David Tan]

Huge network = huge no. of merchants = huge competition ===> you gotta be ones having the best offers and performing exceptionally well.

Banners - get really good designs out that are catered to attract visitors.
commission - need to be the highest
and so forth.

Why? Because the good ones with good offers will perform well in the network. Their EPCs will provide potential affiliates to sign-up or switch to them. The rest of the merchants who don't have that extra 'price advantage' will lose out.

So in really huge network, you gotta pay serious money to ensure that your program is bringing out the best offer, the best creatives and managed by the best program managers. Otherwise, it's money down the drain.

[Gajandra D]

The bigger networks always charge a higher price due to their reputation. But the down side to this is that they will charge extra for the services of a program manager. True that you will have to compete with merchants that offer the same services or products as you. You will definitely have the competition within the network itself for affiliates who now have more options and can pick from so many programs. The nice thing about the smaller networks is that you get individual attention and less competition. a smaller network may have fewer affiliates but if you take the time to nurture and develop a strong relationship you will do better.

[David Tan]

Also, even if you're thinking of doing it internally, it may be better to start with a network for a time before starting your internal program. Firstly, it's easier to manage an affiliate program through a network because the network will help you out with alot of the nitty gritty details. You can take time to learn as well as monitor how the program can grow with the influx of affiliates.
With a large number of affiliates, you can also test and fine-tune your commission structure and program settings to see what generates the most referral sales. The no hassle service of a network frees up time for you to do things you might not normally be able to do like to test marketing on different banner designs.

Lastly, time is money. Do you have the time, resources to do this? Is your business model suitable for affiliate marketing? What are some of the skills or knowledge that you are lacking? Questions, questions and more questions that will be answered faster with a network than the slow pace of an internal program. The faster you know all this, the better for you to make informed decisions and take quick actions.

[drasticfantastic]

I agree affiliate marketing is a cost effective way of advertising, however, like David mentioned, you do need to put some time into monitoring your program and make sure you're not ripped off by rogue affiliates. Also, coming up with new promotional material will require some effort and time on your part.