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Difference between affiliates and resellers

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					Affiliate Marketing
Published date: September 04, 2007

Difference between affiliates and resellers
What do you choose: affiliate or reseller system?
Cristian Dorobantescu, Affiliate Network Coordinator, Avangate B.V. Affiliate Marketing, Published date: September 04, 2007

Every once in a while I get a vendor asking: "What's the difference between affiliates and resellers"? I couldn't find a reliable internet resource to support my usual answer about it, so I thought why not make an article of my own and see how well it goes in Google. So here we are. Actually the biggest issue doesn't come from choosing between resellers and affiliates, but mostly from vendors that are questioning the channel conflict that might happen between their resellers/distributors and the affiliates. The questions are especially important in the software industry where some of the sales techniques are shared by both resellers and affiliates. The fact is that we don't actually have a conflict because there are some fundamental differences between them. Not in a particular order: Affiliates only do online sales and marketing. Resellers have a physical office, they answer phone calls from customers and they take care of invoicing & billing locally and maybe do some technical support as well. Sure, some buyers might get the product online from an affiliate and not from the reseller, but still, the reseller has a different target and this is offline local market. Actually, if you think about it, a buyer that wants to purchase online, he can anyway skip the reseller by buying directly from your site.

© 2007 Avangate B.V. www.avangate.com

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Affiliate Marketing
Published date: September 04, 2007

Resellers are better for custom solutions/big volume purchases or complex packages that also include services. I can't really see or imagine an affiliate doing corporate, academic or governmental sales, or the way they could provide related add-on services in local markets. Affiliates don't train sales/technical people and therefore they might not be able to compete with the resellers who have in-depth knowledge about your products. Affiliates mean pre-selling, resellers do selling. Affiliates warm the site visitor and make him confident and willing to make the purchase on the vendor site. So basically, the vendor sells directly to the customer and makes a direct invoice to the purchaser. Resellers should do the sale on their own, they purchase bulk products from the vendor, then sell by retail to customers; the invoice they issue to customers on their account. It might be easier to get hundreds of affiliates through affiliate networks, but resellers are established companies. Resellers are a much more reliable and easy to control force as they work by the same economic principles as you (the vendor) do. Affiliates might come and go. Affiliates are more innovative and open-minded willing to try the latest marketing techniques. Acting as a one man show or as small companies, affiliates are less bureaucratic. Also, affiliate marketing is extremely competitive - they need to be up to date and more willing to take risks to keep up their revenues flowing. It's more costly to have resellers because of the overhead: you need to have contracts, make agreements, or do marketing co-ops.

© 2007 Avangate B.V. www.avangate.com

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Affiliate Marketing
Published date: September 04, 2007

Let me make a table now:

Affiliates Targeted market Channel

Resellers

Online - affiliate towards vendor's site Offline & online - physical location. The end-user buys directly from the vendor. Resellers buy bulk and sell further to the end-users. Focused Geographically Resellers serve customers in a specific area Reseller/customer location Complex packages Reseller sell customized packages, including add-on services Heavy The reseller system needs agreements, contract, invoicing and billing.

Reach

Unlimited Affiliates reach customers according to the their site exposure.

Sale Location Sale Type

Vendor site Standard products Affiliates sell products that are available online.

Overhead Costs and Efforts Light Costs and efforts are usually outsourced to affiliate networks

Business Model Easy

Complex

Implementation In the affiliates case, most tools, know- Resellers develop both in-house tools how and technologies are offered by and processes to sustain the reseller Affiliate Networks. Strengths Marketing Methods Innovative Reliable The main idea is to stay ahead of the Resellers rely more on proven channel.

© 2007 Avangate B.V. www.avangate.com

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Affiliate Marketing
Published date: September 04, 2007

competition.

techniques, under the vendor control.

Acquiring

Easy to get obligation.

Long term partnerships and reseller is contract based, there are targets to reach and sustainable developments.

Affiliates have no contracts to sign, no The relationship between producer

Value Provided Online add on value Affiliates do the pre-selling and on their site while the merchants do the selling. Number Big number In order to achieve better results, a greater number of affiliates is necessary.

Active presence on the local markets marketing actions, PR, sales/technical support. Selected partners Vendors must resort to multiple selection methods to get only the best resellers.

provide additional value to a product This could be recognized from

What would I do if I were you? I would try to run both affiliates and resellers/distributors and find the ways to eliminate any potential channel conflict by: Imposing market limitations (i.e. limit online sales in certain countries) Setting up different commission/discounts levels Offering different packagings Providing specific and different know-how for affiliates and for resellers

© 2007 Avangate B.V. www.avangate.com

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Affiliate Marketing
Published date: September 04, 2007

Happy selling! Resources: Affiliate marketing What is a reseller

Sign up now for the Avangate Digest Newsletter and receive our Internet marketing tips, shareware industry tools, techniques and resources as soon as they're released. E-mail this to a friend ***

Copyright © 2007 www.avangate.com all rights reserved. This article was written by an Affiliate Network Coordinator at Avangate B.V. This article may be reproduced in a website, e-zine, CD-ROM, book, magazine, etc. so long as the above information is included in full, including the link back to this website. Please e-mail at articles@avangate.com, before using the article. *** About Avangate B.V. Avangate B.V. provides solutions for electronic software distribution and reseller management, assisting software companies worldwide in successfully selling their products online and at the same time efficiently managing a distribution network. The company’s offer includes an eCommerce platform incorporating an easy to use and secure online payment system plus software marketing services and additional marketing and sales tools such as an affiliate network, automated cross selling options, software promotion management, real time reporting, 24/7 shopper support, and the myAvangate reseller management program specifically designed for software sales. More information can be found on the corporate website, at www.avangate.com Avangate B.V. Van Heuven Goedhartlaan 937, 1181 LD Amstelveen, The Netherlands Tel: +31 208908080 Fax: +31 202031309 Web: www.avangate.com Email: info@avangate.com

.member of GECAD Group, delivering innovative IT solutions Worldwide since 1992

© 2007 Avangate B.V. www.avangate.com

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Description: Learn more about the difference between the affiliates and resellers. The biggest issue doesn't come from choosing between resellers and affiliates but mostly from vendors that are questioning the channel conflict that might happen between their resellersdistributors and the affiliates.
Adriana  Iordan Adriana Iordan Web Marketing Manager http://www.avangate.com
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