Affiliate Network vs. Affiliate Software: Which One is Better for Your Business?

So, you're an offer owner with an exciting product looking to enter the world of affiliate marketing but you're not quite sure how to get started.

Or, maybe you're just curious how you would tackle things if you'd decided to finally create that product you've been thinking about.

Would you choose an affiliate network like Digistore24, or go the independent route with an affiliate tracking software? It can be a tough decision, especially if you don't really know the difference between the two.

Affiliate marketing is one of the most effective ways to promote your products, but figuring out how to get started as an offer owner can be a little bit confusing. 

To have a successful affiliate marketing business, you need the help of trusted and vetted affiliates, as well as a system to keep track of all your affiliate marketing data & metrics. If you’ve never worked in this particular sphere of digital marketing before, finding the right system for your business to thrive in should be your priority.

In this article, we're looking at the critical differences between an affiliate network and an affiliate tracking software, and jotting down the pros and cons so you can make a better and more informed decision on which direction you want to take.

What is An Affiliate Network?

Before we jump into the pros and cons list, let's see what exactly is an affiliate network and an affiliate tracking system.

An affiliate network is an established platform that brings vendors and affiliates together online. Essentially, it's a digital marketplace where you (the vendor) can add your digital or physical products, and affiliate marketers can promote them. If they decide to promote your products, they make a commission from every sale.

These networks have a huge database of members, which usually include vetted & experienced affiliates with whom you can collaborate and build trusting and long-lasting professional relationships.

Affiliate networks basically serve as the middle man between vendors and affiliates, connecting them and creating opportunities for both parties. 

For example, Digistore24 is an affiliate network where vendors can add their products, and vetted affiliates can choose from a variety of niches to promote those products. We'll examine some of the benefits shortly, after we take a swing at explaining what an affiliate tracking system is.

What is an Affiliate Tracking Software?

An affiliate tracking software, sometimes referred to as an affiliate tracker or affiliate tracking system, is an alternative to affiliate networks, with more "leg room".

But what does that mean exactly?

Essentially, you source or develop your own tools, processes and solutions for running and growing your affiliate marketing business, as well as tracking your affiliates' progress.

You are 100% responsible in finding ways to recruit affiliates and choosing the tools to track and measure results. This might sound like a lot of work - and it most definitely is, compared to joining an affiliate network - however, it's not that hard to organize everything by yourself. And once everything is set up, it can get a lot easier.

By using an affiliate tracking software, you are the captain of your ship. You have the most control over the affiliates you work with, how you work with them and how you compensate them. And thankfully, there's a whole range of affiliate tracking solutions to choose from that will help you run your business smoothly.

Affiliate Networks vs. Affiliate Software: Which One Should You Choose?

Let's break down the advantages of both affiliate networks and affiliate software, and see which one you should go with. Depending on your skill level and experience, by the end of this list, you should have an idea which one would be a better fit for you.

Ready to find out?

Affiliate Network Advantages

1. Everything In One Place

By using an affiliate network, you can access everything from one central location. This makes a lot of processes easier, including finding affiliates, managing your business, interpreting data, setting up payment plans, and so on.

Plus, with platforms like Digistore24, you get full customer support and dedicated help from Account Managers.

2. Vetted & Dedicated Affiliates

When you sign up to an affiliate network as a vendor, you automatically have access to all the affiliates who also signed up to the network. Once your offer shows up on the Marketplace, affiliates are going to start promoting it. This can save you a lot of time when it comes to the recruitment process.

3. Easy & Straightforward Setup

Setting up your product on an affiliate network is quick and easy. You can start your affiliate marketing activities almost instantly. On Digistore24, for example, all you need to do is create an account and upload your offer following the platform’s guidelines. Once a member, finding new affiliates, paying them and measuring your performance is just a few clicks away.

4. Automation

Saving time is key in this business. An affiliate network will automate most of the processes so you can focus on your brand without spending too many resources on mundane & redundant activities. Plus, affiliate networks like Digistore24 also provide account management and consultation services. You essentially have dedicated people working to make your business better.

5. Strong Security

Another advantage that affiliate networks offer is actively monitoring fraud attempts. Fraudulent activities are pretty common in this industry, that’s why having a team monitoring exploits is highly important. If you’re using in-house tracking software, this task falls on you, the vendor.

6. Increased Trust & Payment Safety

Thanks to all the advantages mentioned above, there’s an increased trust among affiliate partners when it comes to affiliate networks. An affiliate network is generally more visible, and anyone who is interested in your business can view your activities, metrics and how well your offer performs. And most importantly, affiliates know for sure that their payment will be made, because a third party is also involved.

Affiliate Tracker Advantages

1. Full Control

Right off the bat, using an affiliate tracking system gives you more freedom to tailor your business to your liking. Being able to customize your business can feel empowering, as well as setting your own terms and conditions. With an in-house software, you have full control on the way you manage your brand.

2. Flexibility

There are no set of rules you need to follow - only your own. Changes to campaigns don’t need to go through filters and you can easily create custom upsells, seasonal promos, time-sensitive deals and more for your affiliates that they can use instantly.

3. Hand-Picked Affiliates

You have complete freedom to choose who you work with. You can onboard affiliates who are aligned with your vision and focus on growing these relationships that will ultimately benefit you both. Finding relevant partners to promote your offer will guarantee your business continues to grow successfully.

4. Cost-Effectiveness

Usually, affiliate networks charge a certain percentage of your earnings. Or, there could be a sign-up fee or a monthly subscription that you need to pay. Each affiliate network has its own business model, but by using an in-house affiliate system, you might be able to cut some costs. Plus, if you develop your own system, it’s even more affordable, because you’re not paying for some else’s technology.

5. Freedom to Make Changes

If something’s not working for you, if you have new ideas or strategies, it’s easier to implement them if you’re not tied to an affiliate network. As a vendor, you can easily make changes and tweaks to better fit your business’ needs. There’s no rule book to follow - except your own.

However...

Even though you have more freedom with an independent approach, it's not always the best solution, because there's a lot of manual work involved on your part. And if you're mostly interested in getting your offer online ASAP and start making money, affiliate networks like Digistore24 are the safest bet!

Plus, signing up to Digistore24 is completely free!

Disadvantages of Affiliate Networks & Affiliate Trackers

To provide a balanced view of both affiliate networks and outsourced or independent affiliate trackers, it's important to highlight not just the advantages but also the potential drawbacks of each option.

Below you can find five disadvantages for affiliate networks, as well as affiliate tracking software.

Disadvantages of Affiliate Networks

1. Less Control Over Affiliates

When you use an affiliate network, you have less direct control over who can promote your products. While networks do vet affiliates, you cannot hand-pick each affiliate, which may result in partnerships that do not fully align with your brand values or marketing goals.

2. Fees and Commissions

Affiliate networks often charge fees for their services, which can include a percentage of sales made through affiliates. These costs can reduce your profit margins, especially if the network's fees are high or if you generate a significant volume of sales through the network.

3. Competition

Within an affiliate network, your offer is listed alongside many others in the same or similar niches. This competition can make it harder for your offer to stand out and may require additional efforts or incentives to attract and retain top-performing affiliates.

4. Bound by Network Rules

As a member of an affiliate network, you must adhere to its rules and terms of service. This can limit your flexibility in how you run your affiliate program, including restrictions on commission rates, promotional methods, and interaction with affiliates.

5. Dependence on Third-Party Platform

Relying on an affiliate network means your affiliate program's success is tied to the network's platform and policies. Any changes in their service, fees, or terms could directly impact your affiliate marketing efforts.

Disadvantages of Affiliate Tracking Software

1. Resource Intensive

Setting up and managing your own affiliate program using affiliate tracking software requires a significant investment in time and resources. You'll need to handle every aspect of the program, from affiliate recruitment to payment processing and fraud prevention.

2. Technical Challenges

Using affiliate tracking software involves technical setup and maintenance. You may need to deal with software integration, troubleshooting, and updates, which can be daunting without technical expertise.

3. Recruitment Challenges

Without the built-in network of affiliates that an affiliate network provides, you'll need to actively seek out and recruit affiliates. This process can be time-consuming and may not yield a large or as experienced an affiliate base as a network might offer.

4. Increased Responsibility for Compliance and Security

Managing your own affiliate program means you are solely responsible for legal compliance, data security, and fraud prevention. This can be challenging, especially for smaller businesses without dedicated legal or security teams.

5. Lack of Built-in Support

Unlike affiliate networks that offer account management and support services, with affiliate tracking software, you're largely on your own. This means you won't have easy access to expert advice or assistance in optimizing your program unless you seek external consultants or services.

Verdict: Affiliate Networks or Affiliate Software?

Each option has its trade-offs, and the best choice depends on your business' specific needs, resources, and goals. But for beginners, we strongly recommend considering an affiliate network. It's way easier to get started and involves less work on your part. You just onboard your offer, and work on improving it without spending countless hours working on other aspects.

As a beginner, your focus should be on making money, instead of building something from scratch - and then making money.

So, which one should you choose?

Are you just starting out and want to be part of a network and list your offer on a digital marketplace, work with vetted affiliates and have dedicated people help you scale your business?

Or…

You already know your way around the industry and want full control of your business, personally overseeing every aspect of it and handpicking who you work with?

If you go with an affiliate network:

If you go with an affiliate tracking system:

Conclusion

So, as you can see, both options are viable, and it only boils down to preference.

If you're experienced and want to be the sole captain of your ship, we recommend that you choose an affiliate tracking system.

If you want easy access to vetted affiliates, cutting-edge services, as well as the help of dedicated account managers, we recommend that you choose an affiliate network.

We hope this article will help you make an informed decision. And if you want to join an affiliate network, give Digistore24 a spin.

We can’t wait to meet you!

Want to become a Digistore24 vendor? Simply go here to register for free.