The basic motivator for entering into a retail affiliate program is to increase traffic and, in turn, revenue. Yet, whether its catering to the whims of webmasters or refining payout strategy, creating a successful affiliate program isn’t a case of all things for all people.
Are there central guidelines for creating a successful retail affiliate program? An obvious lack of textbook directives and out-of-the-box solutions make it hard to pin down a blueprint, yet by surveying the industry, perhaps we can try.
AVN Online quizzed some of the Adult industry’s finest about the trials and tribulations of operating a successful retail affiliate program.
Sextoy.com
According to Sextoy.com president Dave Levine, a central factor in ensuring the success of an affiliate program is the existence of a good system for tracking orders. "Many programs have holes where sales are not properly tracked or paid. When affiliates catch you skimming or find holes, they lose confidence in your entire system," he says.
"Affiliate programs have been around for many years," Levine adds. "To be successful, you will probably need something different or new or some large players who agree to work with you. Otherwise, why would an affiliate choose your new program rather than go to one that has been around for years?"
Sextoy.com is an affiliate program that sells sex toys, novelties, joke gifts, and Adult videos. The company started selling toys on the Web in 1995, and created the first affiliate program for Adult products in 1996.
"At that time, I paid 10 percent commission and people were signing up in droves, Levine says. "We consistently added features and flexibility to our program over the years. Now we have to pay 30 percent or more and have many competitors. The easy days for starting an affiliate program are over."
Asked about the key to running a successful affiliate program, Levine says, "Don't think it is easy. To start an Adult product affiliate program now puts you almost 10 years behind some companies, so make sure you have good reasons for thinking you can make money with this.
"Personally, if I were getting in the business today, I would become an affiliate rather than start an affiliate program. Sometimes when I send over $10,000 per month to an affiliate, I envy that affiliate. When we started we were splitting profits with affiliates; now affiliates get a majority of the profit on orders."
Levine also believes affiliate hosts need to provide many different ways for clients to customize their store or create different ways to link to the store. "Programs that only allow affiliates to link to the same front page are not flexible enough," he says.
"Listen to your affiliates and make changes or fix problems that they mention. Focus on making your system easy for others to use, for your site to get traffic from search engines or their existing customers. Where are you getting your product? To save money and lower risk, you may want a company to drop ship your orders directly to your customer."
PECash
As one of the oldest affiliate programs, launched in 1996, PECash (www.pecash.com) is widely regarded as one of the Adult industry’s foremost affiliate programs, owned and operated by GVA-TWN, America’s oldest distributor of adult merchandise, having distributed Adult products for 40 years.
PECash CEO Don Buckley reveals, "When formulating the affiliate program, I familiarized myself with the huge online retailers such as Amazon.com and Buy.com. I got to know what their business models were; I learned from observing their operations and their approach.
"We gathered momentum for the affiliate program by taking it to Internet trade shows. We underscored it as being a great way to supplement the income of a membership-based site, with the increase in traffic bringing increasing revenue streams," Buckley says.
Having long since superseded their mail order activities, the PECash online affiliate program is now the company’s key source of revenue, representing 85 percent of all orders.
"Back in 1996, people couldn’t get into the idea of affiliate programs," says Buckley. "Profit margins weren’t really that high and people didn’t want to send their traffic to others. Back then we offered the highest rate of commission; nowadays we have code written by ourselves with 35 percent commission built in. That’s a good deal when you consider that mainstream retail entities such as Amazon.com offer just 5 percent for their affiliates."
Asked about operating a successful affiliate program, Buckley says key ingredients include publicizing your affiliates through various channels and "giving your affiliates what they want. This could include artwork, promotional items, links to various products… also drill down to DVD; pay-per-click links Jenna Jameson DVDs, for example.
"The most common mistakes people in the industry make in regard to affiliate programs is a lack of phone number on the company Web site," Buckley adds. "This does not promote consumer confidence. I’ve had a strong background in Web sales. In order to sell DVD product online, customers need to easily view the box covers in an easily navigable context where it can be searched and sourced."
In terms of technology, Buckley says, self-efficiency is his policy. "Ninety percent of all the technology we use we have developed ourselves, including shopping carts, customer management, product management, and email newsletter generation and delivery.
"As a programmer, the thing I’ve noticed about other sites is the fact that they include poorly-written code. It is good for background, but there really are no key role models for what we do. It’s hand built from the ground up. We utilize Red Hat box enterprise for tracking of demographic information and traffic analytics, prolific traffic filtration to prevent DDoS attacks, worms and Trojans, and load balancing and redundant database servers in our network to ensure uptime and rapid connections."
When it comes to technical problems faced by affiliate programs, Buckley says ineffective search engines are often a problem. "Text links aren’t that effective, though thumbnails go a long way. Most reasonable Web sites use CGI and PHP script for programming, which is generally effective, yet many just use simple HTML, which isn’t.
Yourpaysite.com
Describing itself as an "all-in-one business opportunity to drive traffic to your Web site,"YourPaysite.com incorporates an empire of XXX sites, pictures, movies, cams, games, and more utilizing $250,000 worth of content. Affiliates can choose from 50 pre-built Web site designs or hundreds of domain names.
YPSCash.com is the affiliate program for YourPaysite.com. Online for almost seven years, YPS is a pre-built and maintained program that allows newbie partners to use all the tools and resources to get started promoting Adult Web sites for minimal capital investment.
YPS Cash head Andy Alvarez explains, "YPS Cash also allows webmasters the opportunity to sell this exciting product to practically any source of traffic. Since we've developed the companies in a crossover fashion, mixing business opportunity with Adult entertainment, the advertising directions are limitless. Affiliates are not stuck in the "adults only" section."
Asked what are some dos and don’ts for people considering a retail affiliate program, Alvarez pinpoints two key actions: "Do pay on time, and don’t lie to your advertisers. Of course it's important to have a product that sells, but making sure your webmasters get paid in a consistent manner is also extremely important."
"Nowadays there are tons of programs fighting for banner real estate and advertising space... one late check or a bad week of conversions can send your webmasters and traffic running to another program. The key to success is doing everything it takes to keep them happy. Stay in contact and help them succeed, they are the future of your business."
Asked what technologies have aided his company, Alvarez says, "We're working on a massive support system that will hopefully automate many of the minor live support duties, and of course our Blackberry's and wireless laptops keep us all in touch and working wherever we are. I would go as far to say that technology is more than just an aid, it's a fundamental that makes this business possible."
Alvarez says advances in billing have really helped. "Our YPS system is built to be predominantly automated, so there's plenty of backend that has made the people processing much easier."
Xandria
Sex toy specialist Xandria (www.xandria.com)has been selling products, including vibrators, dildos, sexy lingerie, and fetish wear, to over 2.5 million loyal customers for over 30 years.Within the last year, the company has also made the transition to Web-centric sex toy retailer, providing a complete turnkey toy store affiliate program for webmasters.
"Whether you're providing information or entertainment, people visit your Web site because they respect your expertise and your point of view. They also come to you for help in finding further information, which you should be provided for your users by featuring a links," says Xandria CEO Jeff Rodman. "We believe that there is a strong synergy in a relationship with other Web sites that focus on providing quality content and/or information for their visitors."
Pornkings
Pornkings.com CEO Roger V. says he launched his product in 2000 to compete with the big four: iGallery, Babenet, CEN, and Python. "We decided to come out from under our rock and brand a program because our focus shifted to webmasters from buying per-click traffic and flat-rate deals.
"We have been through many programs in the past eight years, from Quickweb.com, EroticCash.com, FreeFreeProgram.com, EroticaMail.com, and few others pre-2000. Nowadays anyone can create an affiliate program but to be successful in 2005 is not an easy task.
"Everyone has there own formula to becoming successful," V. says. "There is already too much competition out there, but we have always focused on one-on-one webmaster support." V. also highlighted the importance of open communications, allowing affiliates the option of toll-free numbers and message boards.
V. believes the key to a successful affiliate program is having a good portfolio of sites, as well as a lot of marketing material, i.e., hosted galleries, banners, and exclusive content. "The most important factor would be paying on time and being honest with your affiliates; between everything else, making good business decisions and having a good bank roll can't hurt."
V. says it is also significant to have positive morale within a company. "There are so many variables, but I would say that's the key to success – having a crew that believes in you and wants to be successful. Having good employees who care about the product they are selling because you're only as good as your weakest link."
Adam & Eve
Adam & Eve (www.adameve.com), which is owned by parent company PHE, started its affiliate program in late 1999 as an adjunct to marketing Adult toy and videos online.In 2001, the company added internal staff and outsourced for the administration of the program. In 2004, Adam & Eve launched a program by which affiliates are able to build their own co-branded stores using an externally developed software platform.
Adam & Eve affiliates earn 20 percent on sales generated through their own links, plus a $1 reward for every new customer who registers on AdamEve.com and makes a purchase. Registrations are free to customers and commissions are paid monthly.
According to John Myers, affiliate manager of Adam & Eve, "Our affiliate program is a great way to get our name out into the market with a lower marketing cost than print ads, banner campaigns, TV infomercials, etc."
Myers says one key advantage Adam & Eve has is branding strength and reputation. "Today's buyers are concerned about online security and identity theft. Having been in business since 1970, we have a stable reputation. You need to have a plan in place for how to develop a recognizable product that's not ‘just another adult site selling widgets.’
"Besides being one of the few Adult programs that specializes in selling hard merchandise to consumers, we are also very unique in paying lifetime commissions to affiliates regardless of how a consumer returns to the site. Even if a consumer is responding to one of our in-house email marketing campaigns, we pay the affiliates who referred the customer," Myers says.
Client awareness is the key to ensuring success, Myers adds. "Its is important to have a flexible program that will meet the growing needs of webmasters, whether these are advanced, high-income affiliates or beginner webmasters." Other important factors Myers says are watching competitors promotions, optimizing product recognition for name brands, keeping affiliate offers straightforward, and maintaining a list of company strengths.
Also important, says Myers, is understanding competitors, "communicating with their webmasters, and clarifying the stumbling blocks to competing with them. Build a list of what your company does that no other company on the planet does; it helps when it comes time to write headline copy," he adds.
To potential new affiliate programs, Myers offers additional advice: "Prepare an ad budget for how much you can comfortably spend on recruiting new affiliates and know your profit level for when to turn off a program that is not producing results.
"You will generate more loyalty from your affiliates by doing what needs to be done to fix problems. Be prepared to go the extra mile to help out webmasters who are having any kind of linking/tracking/payment problems with their accounts.
"Affiliates are your first line of sight if there are any kind of technological problems with your program such as dead banners and links, or that a customer offer doesn't match what the banner says. Also be prepared to spend time chatting/messaging online to spread the news about your program – in webmaster message boards, etc. – and find ways to inexpensively promote your program without falling into SPAM.
Ultimately Myers says, remember the 95/5 rule: "For every 100 affiliates who are in your program, five of them will support the entire program. Keep those five affiliates happy."
