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

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 Speaking at the recent Internet World conference in Singapore, Mr Isa outlined the outdated business trap that Asia's Internet start-ups were falling into.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

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