It’s a critical question, but fortunately the best answer can be easily deduced performing a quite simple cost-benefit analysis. All you have to do, is to quantify both sides and the easiest way to do it is by answering a few logical questions. Here they are:

• Are there suitable and reliable affiliate networks that can be aligned with your products or services?

• How much time would take for you to build your own affiliate platform from scratch using the good, old DIY approach? How much will cost you? And how much will cost you if you are going to need external professional help?

• Do you have the knowledge, the time and the resources to manage your in-house program? Which one is cheaper and more effective: to hire an affiliate manager to run your in-house affiliate platform or to use an affiliate network?

You should also consider a few – not so quantifiable, but quite important – pros or cons before taking a final decision:

• With a self-hosted in-house platform you’ll have to make huge efforts to prove your value and to build your credibility; the reputation of a legitimate, reliable and well-known affiliate network can be a huge advantage.

• Finding new affiliates for an in-house platform can be difficult and time consuming; finding the right affiliates is even more difficult; a reputable and trustworthy affiliate network with a large number of affiliates will definitely increase your exposure.

• In exchange for all the benefits and advantages provided by an affiliate network you are going to loose the control and the autonomy on how your program works and operates.

• Certain network solutions won’t allow you to establish a direct, “personal” relationship with your affiliates; this is a great plus for a private in-house solution.

If ultimately you’ll decide to start an affiliate program for your business using an affiliate network, you’ll have to find the perfect partner for your business. A network that can be aligned with your products and your financial resources. There are many available options out there, but you’ll have to choose carefully. After investing a considerable amount of time, effort and money in building your affiliate program, it would be quite painful to kill your chances just for choosing the wrong partnership.

There are 10 truly important factors when you are trying to choose the best network for your affiliate program:

• The very first touch-point with your potential customer: the homepage and the website of the given network. Aanalyze it carefully through the eyes of a new customer. Check out every single element that could create a negative impression (content, functionality, usability, mobile-friendliness, security issues, etc). Pay special attention to any attempts or methods that can “reroute” your potential customers (Amazon widgets, links to other networks, AdSense units, etc).

• The reliability and the reputation of the given network. Check out related blogs and forums, search for reviews and review sites, and try to find out ANYTHING you should be aware of (rewards, complaints, delayed payments, etc).

• The outreach level is a key component for your success. If you are aiming a global target audience in a retail sector, you won’t achieve your objectives with a network focused on a certain geographical area or a specific vertical.

• The client list of a given network also can be a valuable source of information and you can use it in two different ways. First and foremost, it can help you to avoid some “bad company” (for example, if you are focusing on B2C marketing you won’t be interested in a network that is specialized mainly on B2B offers) or certain vertically specialized networks (for example, outdoor product only). Secondly, with some big companies and well-known brands on that list the reliability and the trust shouldn’t be a question anymore.

• Without detailed real-time statistics, reports and metrics you can’t optimize your strategy. A solid and adaptable reporting system with advanced tracking capabilities (for example, mobile transactions, tag management, etc) is a must if you want to maximize your conversion rates.

• The reporting system is a must, but is useful only if those numbers are real, otherwise you are spending your money for fake traffic and unreal conversions. If you want to acquire real customers without throwing money out the window, you’ll have to choose an affiliate network with a powerful end efficient fraud detection system.

• The management platform is one of the biggest advantages among all those provided by an affiliate network. You should evaluate carefully the whole “package”, because it will vary from network to network, and believe me, I am talking about important and significant variations. Will they help you with recruitment and on boarding? Do they have categorized affiliate directories? Will they monitor irregular affiliate activities? How deep, efficient and powerful the tracking system is? What is the reporting frequency? Are there any non-performance clauses? And so on …

• Outstanding 24/7 support; without efficient communication channels and a truly dedicated support even the most reliable and competitive affiliate network can easily become an unwanted partner.

• The cost; the price – I mean the amount – is obviously a major factor, but is not the most important angle! Your goal is to pay on performance, so try to avoid setup fees, maintenance fees, banner serving fees or other hidden costs charged by certain networks. Pay special attention to the so-called override arrangements used by many networks to get an override percentage commission (or transaction fee) after every single commission paid by you to your affiliates (for example, if your service level agreement – SLA – is linked to a 25% override rate and you have paid a $40 commission to a given affiliate, you are going to pay an extra $10 to the network as an override commission).

• Lastly but not least: technical requirements. Your goal is to find a professional system that can be set up in a few hours. A well-chosen affiliate network should save you not only time, but also a lot of overhead and headaches. If you must expand your tech department hiring two new IT-nerds just to complete the implementation process and to supervise the ongoing activities, you obviously haven’t made the perfect choice.

A logical question may arise …

Once you have decided to use a network to start an affiliate program for your business, a new, logical question will appear in front of you: should I run my program on multiple affiliate networks or not? It’s a highly debated question. My very short answer: it’s completely up to you. No doubt, with more networks involved you have real chances to increase or even multiply your outreach, on the other hand, you’ll be forced to spend more time and money, and the increased outreach will remain nothing more, but a dream if those affiliate networks won’t provide you recruitment services (fact is, the affiliate networks usually won’t handle your recruitment campaigns). My recommendation: as a first step you should focus on growing your new affiliate program to it’s maximal potential using only one network; you can test the other approach later, when your – not so new – affiliate program has become a fully functional and well-received profit generator platform.

I couldn’t find any affiliate network that suits my needs! Now what?

Obviously, if you really can’t find an affiliate network that suits your needs, you’ll have no choice, but to launch your own in-house platform. And of course, – with enough time and resources – you can anytime decide to build your own affiliate program, even if you have found some acceptable affiliate networks for your products. But you should know, that you’ll need to “sacrifice” a lot of resources to create it, to launch it, to run it and to make it profitable.

So, here is the question again: which one is better for you: an in-house program or an affiliate network? And here is my final conclusion …

It depends on your objectives. It depends on your particular needs. And it depends on your resources too. However, if you want to start an affiliate program for your business and you are serious about developing, launching and running a successful affiliate program, I strongly recommend you to use both solutions. Build your own well-structured, flexible and fully controlled in-house affiliate program, and boost its performance with a smartly-chosen, reliable and cost-effective affiliate network.