Build strong ties with affiliates in order to grow, e-tailers told

<p>While many in Asia's Internet space ponder Amazon.com's formula for </p><p>Web success with envy, a factor often overlooked has been the e-tailer's </p><p>failsafe business backbone: to build ties with affiliates and watch </p><p>business grow from strength to strength. </p><p><BR><BR> </p><p>"It's no longer enough that you actually have a product that can be sold </p><p>through the Internet, you now have to productise the business processes, </p><p>and you can, with affiliate marketing," said Mr Hisham Isa, </p><p>vice-president of sales and marketing at BuzzCity. </p><p><BR><BR> </p><p>Speaking at the recent Internet World conference in Singapore, Mr Isa </p><p>outlined the outdated business trap that Asia's Internet start-ups were </p><p>falling into. </p><p><BR><BR> </p><p>"The value call when most of us built our businesses was 'if you build a </p><p>site they (users) will come', but while this still works, you're also </p><p>going to have to take your product to the customer." </p><p><BR><BR> </p><p>Interestingly, only 17 per cent of all websites showed awareness of the </p><p>power of affiliate marketing by signing up with a programme. </p><p><BR><BR> </p><p>Cornering the Internet market, according to Mr Isa, does not solely </p><p>involve "a big rush to get your business off the ground, get started and </p><p>get noticed". </p><p><BR><BR> </p><p>Categorising websites who had tapped into affiliate marketing potential, </p><p>and mushroomed their business as a result, he earmarked sites such as </p><p>information 'wholesaler' GoEvents.com. </p><p><BR><BR> </p><p>"GoEvents syndicates content in various forms with partnerships it has </p><p>with content owners, developers and manufacturers which distribute this </p><p>to other affiliates who, in turn, distribute or retail content to Web </p><p>users. </p><p><BR><BR> </p><p>"This is a good example of how to start your business using an affiliate </p><p>programme - getting content from the event organisers for free and </p><p>distributing it through channel partners also for free," said Mr </p><p>Isa. </p><p><BR><BR> </p><p>In this case, money was spent on the value-draw of the website, rather </p><p>than on the affiliate partnerships themselves. </p><p><BR><BR> </p><p>Brandishing content developer CNet's affiliate marketing model as a </p><p>"win-win situation", Mr Isa said that additional partnership trends </p><p>swayed towards affiliate accumulation of free content, in place of </p><p>revenue. </p><p><BR><BR> </p><p>A third model - the retailer-to-retailer affiliate relationship - </p><p>identified websites which employed specific programmes which linked the </p><p>sale of used cars on the Internet with the indispensable services of </p><p>insurance companies, for example. </p><p><BR><BR> </p><p>"They (the websites) have taken the time to set up their businesses, to </p><p>think through the business process and packaged their affiliate </p><p>programmes, so they're easily understood by users and their various </p><p>partners alike," said Mr Isa. </p><p><BR><BR> </p><p>With the defining factor for an affiliate programme to "start small and </p><p>test it in the field", he advised owners of websites to "stress-test" </p><p>their business. </p><p><BR><BR> </p><p>"It needs to be proven and it needs to be something that other people </p><p>see has been proven," he said. </p><p><BR><BR> </p><p>"You need to have a relatively well-known brand, people have got to know </p><p>you and trust you in order for them to buy into your affiliate programme </p><p>- this takes money and time." </p><p><BR><BR> </p><p>However, potential problems arise when, due to lack of training, </p><p>programmes fail to deliver revenue promises or fulfill the expectations </p><p>of affiliates and websites alike. </p><p><BR><BR> </p><p>"Affiliates need to be trained, because they don't necessarily know how </p><p>to integrate your content and your products into their Website or </p><p>businesses," he said. </p><p><BR><BR> </p><p>First and foremost, noted Mr Isa, the understanding and definition of </p><p>the affiliate sale was crucial to the smooth-running of the </p><p>partnership. </p><p><BR><BR> </p><p>"You need to define exactly what is revenue - do you make a sale because </p><p>somebody's bought a product, or do you make a sale even when somebody's </p><p>returned it?" </p><p><BR><BR> </p><p>The biggest challenge lies at grass-roots level - preparing and building </p><p>the necessary organisational infrastructure and the business functions </p><p>to support an affiliate network. </p><p><BR><BR> </p><p>"Many think that having an affiliate programme means we need thousands </p><p>of affiliates - not necessarily," Mr Isa said. </p><p><BR><BR> </p><p>"We want to have the right affiliates who'll help build the right track </p><p>record for our brand." </p><p><BR><BR> </p><p>With the various programmes on offer, including the pay-per-click </p><p>scenario, the pay-per-referral scenario and the commission/ </p><p>revenue-share scenario, Mr Isa cautioned against an over-reliance on </p><p>technology as an enabling factor. </p><p><BR><BR> </p><p>"Any affiliate tracking software is only as good as your business </p><p>processes," he said, adding, "a S$10,000 Rolls-Royce edition </p><p>isn't necessarily what you want when you could be served best by the </p><p>S$1,000 edition." </p><p><BR><BR> </p>