Advice needed for new merchant

[juiceman]

Hi

I run a fairly successful UK website selling juicers, blenders, water filters, etc and am considering signing up with an affiliate scheme in order to get affiliates to sell my products. I am a bit unsure whether on not this will work for me, so would appreciate some advice from some successful affiliates.

The products I sell range from about £70-£400 and I'm considering offering between 3% and 5% commission. This means that I will be paying affiliates about the same as it currently costs me (3%) to make a sale or a bit more (5%). If I gave 5%, I would need to get quite a lot of extra sales to make up for paying extra for each sale. I would also need to cover my monthly costs which I estimate to be in the region of £230/month. I don't want to end up making extra sales but the same net profit, as this will just mean extra work for no reward.

What I would like to know is...
1. Is 3-5% enough for affiliates to be interested and make enough money for themselves?
2. Are there any other companies selling juicers that offer affiliate schemes? There's no point me going ahead with this if the most I can pay is 5% when someone selling the same products is offering 7%.
3. I use google adwords at the moment. If affiliates used this as well, would it just end up pushing my costs up to a point where I wouldn't make a profit? For example, suppose I currently pay £10 to google for each sale. If an affiliate starts advertising against me, I may end up paying £10 to google and £10 to the affiliate because the customer bought from their ad instead of mine.
4. There are advertising methods that I don't use such as email marketing, banner ads, etc. How much use of these do affiliates make? Do you have a rough idea of the breakdown between the different marketing methods that affiliates use.
5. How much increase in sales could I expect if I set up an affiliate scheme?
6. Do affiliates need a minimum number of searches per month for a particular keyword? According to overture, there are about 35,000 searches for 'juicers' each month. Is this enough?
7. How many affiliates are individuals compared to companies? I was just wondering whether companies with large numbers of visitors per month signed up as affiliates and just showed the banners on their sites. If it isn't costing them anything to show the banner, they may as well join an affiliate scheme and advertise their products.

Any other help or advice would be very much appreciated. If I go ahead with this, I need to make sure it works for both myself and the affiliates who join.

Thanks

[Linda Buquet]

Hi juiceman,

Welcome to 5 Star. I just did a 5 second search on Google and found lots of programs that are paying 10% for juicers. Unfortunately that's what affiliates will do too. So unless you can pay close to 10 or have some other super advantage, it may be hard for you to attract top affiliates. You will also need someone sharp to manage the program and it's sounds to me like your budget and resources may be too tight to make it work.

There can be other costs involved you have not mentioned that you may need to really do it right. You will need to either buy software or pay for a network you'll need someone to set it all up and run it and make all the banners and other creative.

I am a super optimist when it comes to the advantages of running an affiliate program. For merchants that are equipped and willing to do it right it can be one of the best ROI sales channels. But you get back what you put in and it has to be a Win/WIn for affiliates as well as the merchant.

In the beginning it can be a total cash outlay to get a program going and it wont go very far if you don't have ther resources to invest in doing it right.
IMHO based on what you are saying it does not sound to me like you are ready for a program or maybe you just don't know enough about the upside to be able to commit the resources.

[juiceman]

Hi Linda

Thanks for that reply. It's helped put things in perspective for me. I now realise that I need to do a lot more research than I've already done.

I did a google search and found one site that pays 10%, but they are way down the Alexa rankings. Does that mean that they aren't attracting the right affiliates or that there's not much demand for their products? Can you let me know what sites you found as this is the only one I found. If I knew who the others were, I'd know if I could compete against them.

The figures I mentioned included joining a network and getting them to run my program. It also included money for banner design.

If I offered 10%, I'd be making a loss on many of my products, so that's not an option.

Cheers
Juiceman

[Linda Buquet]

Think I just Googled - juicer affiliate program and found several. No time to check right now sorry. Backed up on several projects.