Affiliate network vs Affiliate software: Which is better?

Once you have decided to start an affiliate program, the next big decision is to decide whether you will work with an affiliate network or an affiliate tracking software. This article will go through the pros and cons of each, and help you to come to a decision.

What is the difference between an affiliate network and an affiliate software?

An affiliate network works in much the same way as tracking software. Sales are tracked and allocated to the affiliate that referred them, and you as a brand get to see your data in a dashboard. But there are some key differences between the two.

Fees

Affiliate networks:

Fees are the biggest differentiator between affiliate networks and affiliate software. With an affiliate network, there are 3 things to consider

• Setup fees
• Monthly fees
• Override fees (a percentage of the commission paid out to affiliates)
  

Setup fees can vary from network to network. Some are free and you will have to do the work to get it set up. Some charge money to set it up for you and that can vary from anywhere between $500-$2000+.

Monthly fees are very common at affiliate networks and prices vary. Depending on the size of the network and their location it can be $250+ per month.

Override fees are a percentage of the commission that is paid out to affiliates, usually between 1-2%

Affiliate software

With affiliate software like Tapfiliate, there is no setup fee. We have 30+ simple integrations that can be done in a couple of clicks, plus comprehensive documentation. If you have a custom cart or website we have documentation to help get you set up.

The monthly fees are much lower than with an affiliate network. It’s value for money because the software still provides you with the tools you need to run your own affiliate program.

Tapfiliate charges a small click overage fee per 1000 clicks, and this is much smaller than the 1-2% override fees that affiliate networks charge. Many of our customers that switch to us save between 10%-30% per transaction just by switching to affiliate software. With these savings, you can easily offer your affiliates a more attractive commission rate.

Additionally, there is more pricing transparency with software as prices are listed on the website. And Tapfiliate gives you a free, 14-day trial to test it out.

Here’s a quick pricing comparison table

Affiliate recruitment

Affiliate software: With affiliate software, you manage your affiliate program yourself, including the recruitment of affiliates – this does mean spending time finding and approaching affiliates to promote your brand. But it also means you have a say in who promotes your brand and how. Plus, it gives you a direct relationship with your affiliates, which will help you to grow your revenue

Important to know: You can invite your customers to join your referral program and this can be automated with Tapfiliate.

Affiliate networks: With a network, there is a pool of affiliates that can apply to your program. Sometimes they are automatically approved and are allowed to promote your program (depending on the network), and you have less control over how you are promoted online.

Additionally, with a network acting as a middleman, it can be more difficult to nurture direct relationships with your affiliates, and depending on the size of your business, it can mean that you get overlooked for promotional opportunities. Additionally, an affiliate network can also get involved if there are disputes between you and your affiliates.

Data ownership in a network vs a software

There are some key differences between a network and an affiliate software when it comes to data ownership. That is because with a network the affiliates sign up with them, not you. That means that they own that data. With affiliate software, it is 1st party data that you own.

Affiliate networks: You can download your transaction data easily, but you can’t download your affiliate list and their contact details, as you do not own that data yourself. It belongs to the network, and they are especially protective of people who want to do that because it usually means they want to move to software, or another network so they do their best to avoid it happening.

Affiliate software:

You own all of your data, and you are able to download your affiliate information, transactions, and whatever other data you require with affiliate software. This is because it’s all first-party data, and it belongs to you.

Payment of your affiliates

Affiliate network: With an affiliate network, you pay the network, and the network pays the affiliates their commissions (as long as a transaction has been approved, and the payment minimum has been met)

Affiliate software: With affiliate software, you are responsible for making payments to your affiliates. You can automate this with the Tapfiliate API, or you can download the transactions and pay them via your preferred payment method.

Agreements

There is a difference between an affiliate network and affiliate software in regard to agreements.

Affiliate network: Depending on the size of your business, you may have a 1-year exclusive contract with a network. That means that you can’t move to another network during the period of that contract. Additionally, depending on your plan you may be tied in for a set time period. Always check your agreements before you sign.

Affiliate software: With Tapfiliate, you can cancel at any time, and there are no tie-ins with agreements. The exception to that is if you are on the enterprise plan. This contract is for a year, but it is not an exclusive contract (that can be created by an online contract generator), meaning that you can work with other providers too if you want to.

What are the pros and cons of affiliate software?

Affiliate software pros

✅ Simple integrations and support

✅ Lower fees

✅ More control over your affiliate program

✅ You own your data

✅ Cancel any time (for enterprise plans you have a yearly agreement, but you are free to work with other providers during this time)

Affiliate software cons

⛔ Need more time to spend on growing your program

⛔ If you are not set up with the API, affiliate payments need to be done manually

⛔ It can be a learning curve when you first start, but our blog has plenty of content to help you get started

What are the pros and cons of an affiliate network?

Affiliate network pros

✅ Help with setup

✅ Pool of affiliates waiting to promote you

✅ Easy payment of affiliates

Affiliate network cons

⛔ Pricing

⛔ Less control over how you are promoted online

⛔ You don’t own all of the data

⛔Can sometimes have an exclusive contract that ties you in for a full year

Here’s a quick overview:

How to choose which is better for your business

When it comes to making a decision for your business, there are three things to consider. Your goals, the amount of time you have to spend on it, and your budget.

What are your goals?

When starting your affiliate program, what are you looking for? Do you want quicker growth, or are you happy to build that up over time? Do you only want to work with content creators or other affiliate types? How strict are you when it comes to promoting your brand? Do you want to own your own data, or are you happy with not having access to some of it? These are important questions to ask when making a decision.

How much time do you have to spend on it?

All affiliate programs take time to build up regardless of whether you work with a network or affiliate software. With affiliate software, you don’t have a built-in pool of affiliates waiting to join your program. You have to do the outreach yourself, which can be time-consuming.

What is your budget?

How much money do you have to spend on your affiliate program? If you are on a budget, affiliate software could be the right answer. If you have more budget, it is essential to look at other factors to determine what is right for your business.

Start your self-run affiliate program today

Choosing the right thing for your business is essential for the success of your affiliate program. Take into consideration the key factors – fees and pricing, affiliate recruitment, data ownership, and payment of affiliates and think about your goals, budget, and the amount of time you have to spend on it.

Here at Tapfiliate, we offer a free 14-day trial to ensure that we are the right fit for your business. You can try all of our features to get a feel for it, and see what we can do to help you grow your business.