Make an informed decision for your affiliate program management strategy: do it yourself or outsource?

Once you decide to start an affiliate program, you should immediately start working on managing the affiliate program. For some, this means doing it yourself. Others will want to outsource the task. Still others will want to use a combination of the two. To make an informed decision, business owners need to know the facts.

Affiliate management do it yourself

Obviously, the “do it yourself” style of management will be the cheapest. It will also be the most time consuming. However, those on a strict budget will find that doing it yourself is not a bad way to go.

When you go this route, you’ll need to track (at a minimum):

• Tax records for members (W9/1099)
• pay for affiliates
• Cost of prizes and promotions.

Also, you’ll want to keep track (although highly recommended, not 100% necessary)

• affiliate sales
• Affiliate Program Progress
• affiliate recruiting
• Success of prizes and promotions

At this point, it is important to note that if you do not have a signed W9 for each enrollee, you will be responsible for paying taxes on your benefit. Therefore, it is highly recommended to never pay an affiliate without proper documentation.

DIY Affiliate Management Software

Once again, although it is not 100% necessary, it is highly recommended to use a DIY software. The affiliate management software will keep track of W9s, 1099s, and rewards and promotions for you. It has the ability to keep all information stored, including digital signatures, along with the accessibility you need to retrieve documents at tax time.

Ideally, you’ll want a software program that manages approved and unapproved affiliates. You must identify which affiliates have completed the proper tax forms and therefore qualify for immediate payment. Also, you’ll want to identify those who haven’t filled out the forms and don’t qualify for immediate payment. Your software should notify affiliates. Also, once the forms are completed, you should add them to the “approved for immediate payment” ranks.

Outsourcing the management of your affiliates

The benefits of outsourcing are numerous. When you outsource, you are hiring trained affiliate marketing professionals. They can track your programs, recruit new affiliates, recommend and implement promotions, and basically anything your affiliate program needs.

The downside to outsourcing: cost. The more you ask the affiliate management team, the more it will cost you.

Outsourcing can be quite expensive if you have them do it all, so a combination of both is often used.

Combination of Services

Since tracking payment and tax information for affiliates is so easy (and the software is free), many startups decide to keep this aspect in-house. They leave program monitoring and affiliate recruiting to the outsourced company. This approach frees up some time and costs less money.

Ultimately, the choice will be yours. What are you comfortable doing? What are you comfortable letting others do? Once you answer these questions, the do-it-yourself or outsource answers will be much easier.