I recently launched a dream of mine…a brand new affiliate network. But why? It’s a massive investment, a huge time and energy drain, and there’s no guarantee of success. It all comes down to one big reason…
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Previous Episodes of The Affiliate Guy
Scaling Your Affiliate Program and Your Business Without Spending a Fortune
How to Expand Your Affiliate Army by Recruiting Non-Traditional Affiliates
2025 Affiliate Marketing Predictions
5 Affiliate Recruiting Mistakes That Are Costing You BIG Time
Behind-the-Scenes on Our Affiliate Promotion for Product Launch Formula
Why I Finally Started My Own Affiliate Network
So I recently launched a dream of mine, a brand new affiliate network. And of course the question is why? Like, why would I do something, something that’s such a massive investment of time and money and there’s no guarantee of success? Well, it all comes down to one big reason.
Let’s get started. So, as you may have heard, I recently did something big. I, along with our team, launched a brand new affiliate network called XP Affiliate. And XP kind of tell you a little bit of the story behind that in a second, the name and all. But I’m going to start with a call to action. Go to xp affiliate.com and check it out. All right, sign up as an affiliate, sign up as a merchant. We’ll talk about why I started this. And that’ll kind of hopefully tell you a little bit about maybe if it’s good for you as you get there and maybe as you listen, you might be like, you know what, that’s not the network for you. That’s cool.
It’s not for everyone. But I think it might be for you if you’re listening to this. So, you know, I mentioned a few episodes ago and I talked about how this was a dream for over 15 years. If you go back to sometime in 2009, actually, as I look at the Google Doc here, March of 2009. So coming up on almost 16 years, I created a Google Doc, one of the very first Google Docs I ever created. When I look back, at least it’s still around in my Google Drive. There’s only like seven or eight that are older than this one. And it was basically ideas that I had for an affiliate platform, an affiliate.
The first couple of years it was like an affiliate software. Then it became an affiliate network. And these were some random ideas, some that were well thought out. A lot of it was me complaining about the way things are, improvements, what ifs, wish I coulds, you know, all that stuff. And some of them, like I said, they were just, what if we could do this? What if an affiliate network had this feature? Wouldn’t it be nice if such and such. And this doc grew and grew. Initially it was like a page. I literally just jotted down like three ideas that I had. And then it was a month later I had a fourth idea. And every time we would talk as a team or I would be talking with Other affiliate managers or business owners who are running their own affiliate programs.
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And someone would say, you know, well, I wish I could do this, or what if, you know, I could do this or wouldn’t it be nice if this existed? Or they were complaining about features on other networks or complaining about improvements. No matter how half baked these ideas were, I would go and add them to this Google Doc. And then, you know, over time, some of the ideas that I added in say 2011, sure enough in 2016, Network A released that feature and then four months later Network B did. And you know, some of the big networks were adding some of these things. And so even though I didn’t publicize this list, I don’t know, 10 to 30% of them became realities. Why?
Because think about who I’m talking to. I’m talking to other affiliate managers and business owners who wish they had certain things if they’re saying the same thing to the networks. Some of those things got put into practice now, not all of them, in fact, not probably more than a third of them. And that’s kind of the problem.
That’s actually one of the reasons why we created XP was so we could be responsive to people who, they want certain things and we could add it. And the reality is, you know, going back in 16 years now, almost honestly after five or six years, I, I never thought it would happen. And so me adding things to that list became less and less frequent. Since, you know, about 2018, I went back and looked at some of the revisions. And again of those words, very few of those things had been put into practice by other networks.
But the reason why I stopped adding to the doc was because I never thought it was going to happen. You know, we looked at the development costs, it was in the millions and never happened to have millions of dollars of liquid money, you know, liquid assets lying around that we could invest in something like this. And I just finally kind of gave up on it. And again, I would add an idea periodically.
Most of the time it was like I would add it to that document just to get it off my head, out of my head, and I would add it to the document. Like if I mentioned it to other affiliate networks, like, hey, it’d be nice, and if they didn’t do it, I’d add it to that doc on the off chance that this would ever happen. Well, it finally did. And as I mentioned a few episodes ago, I finally found the right People who had the millions of dollars and access to more, who had a background in software and SaaS companies and are super smart and super connected. And we were able to do this.
So I knew that I wanted to start a network. Basically I wanted to scratch my own itch. And that’s how so many products are made. I was listening to a book recently by Reid Hoffman, the founder of LinkedIn, and he talked about Sarah Blakely, the founder of Spanx. And the whole idea was she went to a party and she had to like, again, not a woman. So I don’t fully understand all this stuff, but I had to like cut the feet out of pantyhose. And that was what she did. She’s like, she discovered thousands, millions of other women are doing the same thing.
She was scratching her own itch when she created the product. So I knew that I wanted to start a network because I wanted to scratch my own itch. But it needed to be more than that. So I met with, over the past year, met with more than a hundred people, met with affiliate managers, met with affiliates, met with small business owners who are running their own affiliate program. I met with CMOs who are running affiliate programs. I met with people who have said that they want to start an affiliate program but never have because I wanted to, you know, if that’s going to be the target audience, I want to know what they’re thinking. Not just the people who are running programs already. I met with people who are 200amonth affiliates and people who are over $50,000 a month affiliates. In fact, I met with a couple of six figure affiliates. Most of the affiliates I met with are making between 500 and $3,000 a month though.
But again, some smaller ones and some big ones. Some of the affiliate managers I met with are running $10 million plus a month affiliate programs. Some of them are running affiliate programs that are under a thousand dollars a month right now. And like I said, some of them don’t even have an affiliate program or they have an in house affiliate program. They’re not on a network. And I wanted to know why. So I went about meeting with these people and ultimately it came down to what problem are we solving? That was the big one for both merchants and affiliate programs and affiliates was like what problem are we solving? And it came down to one word. And it was the word that I had put in the Google Doc back in 2010.
But a year after I started it, I put it in the Google Doc. One word, complexity. Complexity. The thing I kept hearing over and over again was that the other networks and most of the software are just too dang hard to use. I mean, they kept over and over. Matt, I can’t even figure out how to do X. And X was always something basic like I can’t figure out how to send an email to my affiliates. I can’t figure out how much money we made yesterday. I don’t know who’s active and who’s not. I don’t know how to contact this affiliate. Or there’s four steps to get to this and I don’t want there to be four steps. I want there to be one or two steps. Or from the affiliate perspective, like how many clicks did I send yesterday?
You know, simple things made incredibly complex by the networks. And this was true of like, you think about it, of course it’s true of the smaller affiliate programs. Of course it’s true for them. Right? The affiliate programs that are being run by, you know, the CEO of the company and he’s got like a virtual assistant and one full time employee and he’s running his affiliate program in 75 minutes a day. So of course they’re too complex for him. That’s most companies, most companies don’t have a full time affiliate manager. As much as I would love for everyone who listens to this to hire our agency, the reality is less than 1/10 of 1% of listeners to this podcast will ever work with us.
That’s just the reality. I know that. And that’s okay. So of course it’s true for the small time affiliate programs. $1000 a month, $5,000 a month, even 20, $25,000 a month. Yeah. They can’t figure out stuff, they don’t know where to go for stuff they can’t remember. And then they move stuff and it’s like, oh my gosh, it’s so confusing. But I had a conversation in this process with it, I’ll never forget it, with an affiliate manager who I have known since 2009. He at that time ran a huge affiliate program and then switched over to another huge affiliate program. Well, now it’s huge. They weren’t actually that huge back in 2009.
Their affiliate program was probably a million dollars a year, $2 million a year. Again, big. But not just out of this world. I promise you. You have heard of this company and their affiliate program is unbelievably huge. This guy has won awards left and right. He is recognized in the industry and that’s all I’m going to say. Cause otherwise I might give away who it is and that I’m not going to do that. But this guy was literally saying, he’s like, matt, I log into and he named the affiliate network that he uses. He’s like, I can’t figure out how to do half the stuff. I’m messaging the people. I’m like, why did you name it that?
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Why is it there? Why didn’t you? You know, like, why is this? He’s confused. He thinks it’s too complex. And he’s running an affiliate program that needs a certain level of complexity. Because when you run a $10 million plus a month affiliate program, you need all the fancy tools and stuff that the average affiliate program doesn’t need. The same is true of bigger affiliates.
They need some of the fancy tools that most affiliates, 99.9% of the affiliates don’t need. So what we did was we made the Networks for the 99.9% and we built an affiliate network that does four simple things. The first thing is we handle all the tech. So the tracking is flawless. This is the most basic part of an affiliate program. Does the tracking work? No tech nightmares, no complicated integrations. So that’s what we did. I was like, guys, we have to make this simple. This isn’t meant. At least now for the multibillion dollar company who has a tech team, integration takes three days. Who cares? They need fancy tracking. Who cares? Like they can do that. They’ve got 13 developers, 25 developers.
They can devote two of them entirely to this project for a month if needed. That’s not who we’re trying to serve here. The second thing is we handle all of the affiliate payments. So every month you have an affiliate that’s in your program and maybe he’s an affiliate for two other programs that he earns money on. And so they earn $300 on each of those programs. At the end of the month, we send them 900 bucks. Actually, every two weeks we send them 900 bucks. In that case, if it’s, he did 300 in that period of time.
And so we handle it all. We pay twice a month. So your affiliates get paid very fast. And we do all of the accounting and stuff, so you don’t have to do any of that. And sometimes that’s like a barrier, those logistical type things. The third thing is we handle all of the tax paperwork, all of the 1099, all the W nines, all the legal stuff, all the compliance, so you don’t have to worry about that. And then the fourth thing was we wanted to make it easy to do the things that the average affiliate manager or business owner who’s spending one to two hours a day max on their affiliate program, make it easy for them to do the things they want to do.
They don’t need all the complicated tools, they don’t need to navigate around them. They need to do the simple stuff. So we made it easy for them. So from an affiliate manager perspective, that was it. And then from an affiliate perspective, we wanted to, number one, make it easy for you to find affiliates. Number two, make it easy to grab your link. You don’t have to dive in and go four layers deep to grab a link. And then third, just make it easy for you to get paid frequently to be able to run reports and know the basic stuff and not super complicated.
That’s it. Simplicity, removing that complexity and making things simple. And so a few episodes ago, I answered the question, should you be on a network or run your program in house? And I basically shared the pros and cons of both. Right. You know, so for in house, the pros where you have control over everything, you have that branding, consistency. It’s a little bit cheaper than being on a network, typically, not always, but 99% of the time it is. The cons were just the management overhead, again, paying affiliates, the tax stuff, the compliance, all those things, technical expertise.
Like I said, most companies don’t have tech teams and a lot of in house Software nightmare from a tech standpoint. And then just the scalability again as you grow. You now need a full time bookkeeper just for the affiliate program. You need a full time person in charge of compliance. You need programmers and assistant affiliate managers and quality control people. And it becomes, it’s unmanageable. And then the pros of the network was I said it was easy to use, very easy access to established affiliates and that scalability. But I didn’t mention things like again, handling all the logistics and handling the tax stuff and the compliance side, these are huge.
Like the compliance side is. So look at this. One of the things that is an advantage on a network is number one, we have fraud detection on our side. So every time somebody clicks on an affiliate link it is detecting is there frau possible fraudulent activity here. And essentially if it’s a red flag, which is only about 0.01% of the time, it doesn’t work, it will not let that activity go through. Then there’s green flag like okay, there’s a 99.999% chance this is a valid click and a valid transaction. Just let it go. But then there’s the yellow stuff which we review and we use tools over time that like as we manually review it we can go that was a valid transaction.
Boom. Okay, that was a valid transaction. Same is true with affiliates. So if merchant A says this affiliate, I’m kicking them out of the program because they’re bad. Well then we can look at it. Okay, what did they do that was bad? Well, they did this credit card fraud. We caught them making unsubstantiated claims that are going to get us in trouble with the ftc.
We caught them doing this. Boom, we can kick him out of the network. They’re no longer in any of the affiliate programs. We’ll let you know of course and we’ll say hey, we kicked this guy out because here’s what he was doing. And then maybe it’s. Well, they say he’s bad, but it requires some investigation. We’ll investigate it. So you get the benefit of the network knowing if somebody’s good or bad.
So let’s say you have an in house program and somebody is going to, they find your program and they’re going to sign up with your program. Well, you have no vetting process other than I don’t even know what you would have. We have a vetting process. They actually have to get through the affiliate network first. So when they sign up for your affiliate program we’re able to say, wait a minute, that guy’s already got an account with us and he’s bad. Like, he’s been red flagged by two other affiliate programs. Don’t let him into this program. You can’t sign up, basically. And so there are all kinds of things that we can do on the network side that allows you to protect your brand and protect your affiliate program.
Again, not to mention all the logistical stuff that we handle and things like that, connecting you with more affiliates. And then one of the cons that I talked about was the diluted brand. Right. Like in a network, your program is one of many in house. You’re the only one. Right. And this can dilute your brand a little bit. But this is something that we’re addressing at xp. This was the negative that I most wanted to address with our network that’s completely different from every other network. And that’s something that we’ve addressed at xp. I’m going to share more about that in a moment.
So again, it all comes down to this. It comes down to simplicity. The vision that I painted for our team is I want our affiliate network to be one that an affiliate manager can run from their kids soccer practice. And not if you’re like me and you’re coaching, that would be a little too difficult. But you’re your kids soccer practice, you can run it. Eventually we’re going to create an app, but on the mobile version it’s super easy to use. We want it to be easy to manage for affiliate managers. We want it to be easy to connect with affiliates.
We want it to be easy for affiliates to find affiliate programs. We want it to be easy for affiliate managers to manage their program, to run reports, to have everything they need and nothing they don’t. Because the nothing they don’t gets in the way and complicates things. Want it to be easy to see what you want to see without clicking 9 links deep. You know, as I was telling our team the other day, are we going to eventually have feature creep? Yes, but we’re going to do everything we can to prevent that. And we’re going to do everything we can to prevent feature creep. And one of the ways that you get feature creep is doing something positive that we do.
We are responsive to our merchants and our affiliates. If you want something, ask. If you want to add a feature, ask us. If enough people want it, we will add it. Now again, we have to be careful and balance that with feature creep. Feature creep, by the way, if you don’t know, is just if you’ve ever had a software where it’s like on day one it was really simple to use and then they added a couple things and you’re like, yeah, that’s cool. And then they added a couple more and you’re like, well, I don’t, I’ll never use those. And then they added like five more things that you never use. And now all of a sudden the things that you do need are like I said, four layers deep under a submenu. Submenu, submenu. And it’s hard the features creep in.
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Right? So really ultimately where we’re at, we’re a small but mighty company. We’re kind of a scrappy startup and thankfully we got the funding, which is awesome. We’re signing up merchants, we’re signing up affiliates, we’re growing every day.
It’s been a really fun journey so far. So one of the things that we’re able to do, this benefits both sides. Something that as we get bigger, we’re not going to be able to do and most other bigger networks aren’t able to do that. Do. What I’m about to say is every merchant that signs up, we’re featuring them. We will make sure every affiliate knows about your program. And that’s something that again, we’re not going to be able to do in a year or two. But right now we can. And so we’re invested in our merchant success, we’re invested in our affiliate success. We got all kinds of amazing things. Some exclusive training I did, I just alerted our people on my email list which by the way, if you’re not, go sign up on mattmcwilliams.com but I sent an email out and one of the things that we’re doing this year is we’re releasing new, a brand new version of no Product, no Problem.
And every affiliate that signs up for XP is going to get access, early access to that brand new version course is going to sell between 500 and $1,000. It’s our affiliate premium affiliate marketing training and we are going to offer that for free before it even comes out. It’s probably going to come out in the fall of this year sometime, you know, this spring or early, early summer I guess. Early summer is like late June. So no, it would definitely be late winter to mid to late spring. We are going to release a new version of no Verdict, no Problem and every affiliate on XP is going to get access to it. And we’re going to be doing monthly trainings and all kinds of other stuff.
So make sure that you get signed up as an affiliate if you want to get that training and this is exclusive training, so go to XP affiliate.Com, click on affiliates or merchants. You can sign up there. You can also check out the blog. We’ve got some awesome stuff, some unique content on there. Jake and our team is pumping out some amazing content on the blog. So again, training, all kinds of good stuff on there. But that’s the quick story about why I started this network was ultimately simplicity.
Let’s make things easy for people to run affiliate programs and be affiliates. That’s what we’re all about. So again, check it out. XP affiliate.com if you haven’t yet, make sure you hit subscribe so you don’t miss the next episode. It’s going to be a good one. And if you got any questions about XP or anything else. 260-217-4619 text me If you’re thinking about signing up as a merchant or becoming an affiliate you’re not sure yet, just text me 260-217-4619 See you next episode.
See you soon.
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