In order to start doing affiliate marketing, you must first invest money. The money you need to invest in this business depends on many things that we will write about in this text.
We will now describe in steps what you need to do to get started and what costs you can expect in those stages.
Affiliate management platform charges
The first thing you’ll need to start doing affiliate marketing is an affiliate program management platform.
An affiliate management platform enables you to create and manage affiliate programs:
- It automates creating affiliate links (and/or coupon codes) for the affiliates.
- It tracks those affiliate links to identify referral sales and map them to the right affiliates.
- It reports important affiliate program KPIs like affiliate revenue, top affiliates, etc., to help you keep track of your affiliate program progress.
- The reports also enable you to find opportunities to plan further affiliate program growth.
You have two options when it comes to choosing an “affiliate management platform.” And the costs of running your affiliate program vary vastly depending on which you choose.
Joining an affiliate marketing network or affiliate marketing program
First, you must log in to the affiliate network or program and select an offer. This part can be paid or even free, but it requires research on the topic and preparation.
Most affiliate networks charge a fixed initial one-time setup fee ranging from about $500 to over $2,000. This includes the technical setup of the account.
All affiliate networks charge a transaction fee, which is just a small percentage of the commission paid out to each affiliate for each sale. What you need to look out for is the monthly minimum, that is the amount in transaction fees an affiliate network requires each month. So if the monthly minimum is $150, and you only pay the network $100 in transaction fees, you will owe an additional $50 at the end of the billing cycle.
Cost of Affiliate app/SaaS
An affiliate app enables you to create your own affiliate program. It gives you complete control over your affiliate program and saves you from relying on third-party networks.
A typical affiliate app/SaaS costs way less than affiliate networks.
Affiliate commissions
Affiliate commissions are often the biggest “business cost” for successful affiliate programs.
But unlike most of the other costs associated with running an affiliate program, you pay commission based on performance. So, if affiliates bring zero sales, you pay $0 as affiliate commission.
The typical affiliate commission rate is between 10%-25%.
Investments in traffic
When you have massive organic traffic and plan to monetize it with classic affiliate marketing, you won’t normally spend any money. However, if you’re a CPA marketer you will need to pay for traffic, then you will need to worry about every dollar spent. Generally, $300 is enough to run a few tests and earn some money.
Here it is very important to test various things because this is an expense that can skyrocket and become the biggest expense you will have. That’s why it is very important that the traffic is well optimized and that the money that goes into it starts to be returned as soon as possible. If you see that the money is not returned, immediately be ready to make changes.
Tracking tools
You’ll probably also need to purchase some software to help you track how your campaigns are doing. This software is paid on a monthly basis and will probably cost you around $100 per month.
Be well informed before you buy any of the software, because it is important that the software gives you the right data and results so that you know at all times how you are progressing.
Spy tools
You can also use some of the competition tracking software and see what your competition is doing so that you can improve and have new ideas.
This kind of software can cost you around $50 per month.
Translating tools/agencies
According to experts on iAmAffiliate, If you do campaigns in several different languages, you may need the services of translators, which you can find on popular sites such as Fiver, Upwork, and others.
This is not a big expense and unnecessary because you can also use free translators such as google translate.
Creatives and images
Creatives and images for your campaigns can also cost you. This is not a big expense but it is better to buy them than to use the free ones that can be found on the internet.
Landing page builders
You should check if your affiliate network offers ready-made landing pages before investing in a landing page builder. If they don’t, a decent builder may cost around $20.
Hosting
When doing affiliate marketing, hosting is another cost you can expect that is not high. It is best to find the cheapest hosting and host all the landing pages you will create and send traffic to.
Try to find referral links because they usually have a discount so you can save on this item.
Affiliate manager salary
If not initially, after a certain point in your affiliate program growth journey, you’ll need an affiliate manager.
An affiliate manager’s job involves recruiting affiliates, vetting affiliate applications, negotiating deals with top affiliates, managing relationships with affiliates, helping new affiliates, ensuring affiliates get paid on time, and identifying growth opportunities for the affiliate program.
They also coordinate with other teams to ensure the affiliate program works smoothly. For example, they work with copywriters for email copies, graphic designers, etc.
The cost of an affiliate manager depends on how you fill the seat — you can outsource the whole job to an affiliate management agency, hire someone hourly, or hire a part-time/full-time employee. For some idea, though, this statistic might help: According to salaries websites, the average hourly wage of an affiliate manager is $31.
Doing affiliate marketing in 2023 – conclusion
As you can see, doing affiliate marketing is not too expensive and a small amount of money can get you started. To begin with, you don’t need all the things we have listed, you can invest in them when your business grows and you start making money.
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