As I was writing a recent post, it occurred to me that explaining complicated technology products is a skill in great demand. The affiliate business model I previously proposed for e-commerce would apply just as well to, for instance, SaaS products, Cyber Security products, and many other technology products and services.
Now, I am thinking of writers becoming affiliates of a specific genre of technology products.
I would like to see a few entrepreneurs develop some new, highly curated affiliate networks for Cyber, SaaS for Small Businesses, Marketing Technology, etc.
For each network, there would be, say, 50-100 affiliate partners, and 20-50 technology vendors that sell those products online.
The writers - affiliates - would write about the products of the 20-50 vendors that they represent, including how to maximize the utilization of those products, use cases, usage hacks, etc. Traffic would develop through organic search, and ongoing relationship with the readers. As the products sell, the writers (affiliates) will get paid affiliate commissions.
For an affiliate partner to make a good living, the network needs to help generate $100k in affiliate fees for the year. At 10% affiliate commission, that entails selling $1M worth of products.
For recurring fee SaaS affiliates, for example, the ASP could be $500 a year, in which case they only need to sell 2000 units to make the numbers. If the affiliate network is set up such that partners make ongoing commission, they would be incentivized to keep writing about the nuances of how to make best use of the products over time.
The network, if it operates on a business model of 10% off the top-line, would make $5M (10% of $50M) with 50 affiliates, and $10M (10% of $100M) with 100 affiliates.
Is it a win for the vendors?
On average, if the 50 affiliates are generating $50M for 20 vendors, then the average revenue per vendor is $2.5M. The vendors are paying 20% commission (10% to the network and 10% to the affiliates), so $2M post-commission margin.
Not bad at all.
Let's get going.
Photo credit: Petras Gagilas/Flickr.com.