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Direct vs affiliate marketing: the differences & the pros & cons

At E-Commerce 4 IM, we provide online merchant services to high risk businesses. We’ve helped site owners with their credit card processing for over a decade and try to inform and assist however we can. This is why we want to address two questions: what is direct marketing, and what is affiliate marketing. We’ll also discuss the pros and cons of running an affiliate program versus direct sales from a business owner’s perspective.

If you already run an affiliate program but need a payment gateway or payment solutions, please feel free to reach out to us here. If you run a direct marketing campaign for your product or services but need help processing credit cards, you can contact us here.

Before we look into the benefits of these common marketing methods, we’ll start by quickly giving a short definition for each.

What is direct marketing?

Direct marketing, or direct sales, is when the business itself runs the marketing efforts and control the entire process. You can, of course, hire companies to execute SEO, email marketing, content marketing, or other online marketing efforts.

At the end of the day, you’re in charge. Your sign-off is required, and there are clear agreements as to what is, and is not, appropriate in terms of how your business is represented and promoted.

Benefits of direct marketing

One of the clearest benefits of direct marketing is your level of control. It is by far the biggest of the “pros” you get with direct marketing and sales. You can more easily avoid misrepresentation and ensure that high-level customer support is offered whenever necessary.

Drawbacks of direct marketing

Although direct marketing offers greater control, there is often a comparatively slower growth curve compared to what’s possible with affiliate marketing.

Note: if you are considering direct marketing you should also be aware of these 5 practices that could cost you your merchant account.

What is affiliate marketing?

Simply put, affiliate marketing is when you put an affiliate marketing program in place. This program offers incentives for other companies to market and promote your business, where they receive a commission for each purchase resulting from their marketing efforts on your behalf.

At its core, it’s an excellent way for you to grow your business quickly and efficiently. When done right, affiliate marketing can dramatically boost your customer base.

Benefits of affiliate marketing

One of the biggest pros of affiliate marketing is the growth potential that comes with it. When you get many affiliates promoting your company, products, or services, your sales can grow exponentially.

Additionally, you generally don’t pay out anything to the affiliate marketers without getting a return on that investment in the form of the sales they provide.

Drawbacks of affiliate marketing

The main catch with affiliate marketing is that you’ll, necessarily, give up quite a lot of control. Independent affiliate marketers will decide the method and context they use to bring up/recommend your business, products, or services.

You can certainly issue and outline terms and conditions for an affiliate marketing program. However, monitoring and enforcing these terms can be extremely time consuming, and potentially frustrating.

Affiliate programs do carry inherent risks, but there are ways to address these. You can read more in our article on how to lower risks of affiliate marketing.

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The credit card transactions and payment processor side

If you run a subscription-based e-commerce site, sell high risk products (like nutra-products or health & beauty products), or process a number of credit card affiliate payments – there are some things you should be aware of.

Considerations to make when running rebilling and subscription-based sales

With direct marketing continuity subscription e-commerce, such as high ticket mastermind coaching, you’re very likely to fall within the high risk category. This means that you need an online credit card merchant account that can actually meet your needs. Similarly, having a high risk friendly payment gateway is crucial. If you need help with either, we’re more than happy to assist. You can reach us here.

What to keep in mind when achieving high volume sales

Running affiliate programs, ideally, results in a large number of referrals and sales. This means that you’ll possibly start processing high volumes of payments. From a growth point of view, this is great. However, high-volume e-commerce sales do require high risk merchant services in order to accept high volume credit card payments successfully in the long run.

Run a high risk small business but need processing advice?

At E-Commerce 4 IM, we can help you accept credit card payments for the many sales you’ll generate from your marketing efforts. If you want to know more about direct marketing or affiliate marketing, we recommend these resources:

If you’re ready to start selling and processing payments, don’t hesitate to get in touch. We look forward to assisting you and your business! You can contact us here or give us a call at 1-800-570-1347.

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