SellFire is going to Affiliate Summit West 2012

By on November 9, 2011
This entry is filed under SellFire Business.

It’s been a while since I have posted anything so I thought I’d give a quick update on my progress. First, I’m happy to announce that SellFire will be attending Affiliate Summit West (ASW) 2012.  ASW is the premier affiliate marketing conference and it is being held in Las Vegas, Nevada from January 8th through 10th.  We don’t have a booth, but I am hoping to learn about the newest trends in the affiliate marketing industry and to make some new connections. Also, I’m currently targeting early January for a preliminary launch of the website, so I can use the conference as an opportunity to find our first customers.

 

Second, here is a rundown of things that I have been working on for the past few weeks.

 

  • Primarily, I’ve been focused on making progress on SellFire’s core software – the WYSIWYG Affiliate Store Builder. The software is coming along nicely and the core functionality is mostly complete. I am now focusing on adding secondary features that bring me to parity with the competition.
  • We contracted out work to a graphic designer to design the look and feel of the SellFire website. The mock-ups are mostly complete and I’m excited about the results.
  • I’ve spoken with a couple of different legal firms. I’ll need legal help drafting the site’s terms and conditions and privacy policy. I expect that those documents will be completed within a month.
  • SellFire is now officially a registered LLC in the state of Delaware. I formed the business entity using LegalZoom.

 

Lastly, I hope to start some initial beta testing within a month. If you would like to be a tester, please let me know.

 

 

 

Technology Platform

By on October 21, 2011
This entry is filed under Technology.

In this post I will give an overview of the different components that  make up the SellFire technology platform and the technologies that I am using. For my non-technical readers, this post will likely be indigestible for you :)

Data Feed Processing Engine

The back end of SellFire is a product data feed processing and normalization engine. SellFire will process data feed files from a multitude of affiliate networks. Each of these affiliate networks publish data feeds in a different format. In addition, within an affiliate network each individual merchant may have varying quirks in their feed. For example, they could be misusing columns or be encoding their content using varying techniques. In order to maintain a database of affiliate offers for SellFire customers to search against, all of these data feeds must be transformed into a single, normalized format and imported into a search engine. The SellFire data feed processing engine is responsible for this normalization and import.

The processing engine performs the following tasks:

 

  1. Recognizing when a new data feed has been published by a  merchant, either by monitoring a hot folder for push activity or by regularly polling a source location
  2. Normalizing the data feed into a format used by SellFire.
  3. Cleaning the data of any irregularities – e.g. encoding issues, unusable entries, duplicate entries,
  4. Quality checking the data feed for accuracy. This is done automatically by ensuring that each product data feed entry A) has all required field and B) points to a page that has content that appears to be correct.
  5. Comparing the data feed against the merchant’s previous version and alerting customers who have active advertisements that have been changed.
  6. Export the normalized feed into two data repositories – the advertisement repository, which stores the full advertisement, and the search engine, which only stores the searchable components.

 

The data feed processing engine is written in C# and runs as a Windows Service. I choose this technology platform mostly out of familiarity. The .NET API makes performing many tasks very simple. For me, the only downside to the technology choice is cost. It will cost me twice as much to run the service on a Windows machine than if it was written in Java and it was run on a Linux box. On the other hand, the service can normalize and import nearly 10,000 products a second, so there is not much need for more than one machine.

Data Storage

This is subject to change, but right now I am using three different technologies to store data.

MySql

I am using a MySql database to store a wide range of information about my customers, affiliate networks, merchants, and settings. For instance a MySql database contains all of the information about how to normalize a merchant’s data feed into the SellFire format and also what data sanitation operations need to be applied.

I choose MySql for this task because it is free, full featured, and integrates with .NET pretty seamlessly. I would have preferred to use Microsoft’s Sql Server, mostly because the GUI is much better, but it is absurdly expensive. It would cost almost 5x as much to run a SQL Server Machine in the cloud than a MySql machine.

MongoDB

I am using MongoDB as the advertisement repository. The advertisement repository will hold all of the advertisements from all imported data feeds. I expect that SellFire will quickly grow to over 50 million advertisements. I choose not to use a relational database for this task for several reasons. First, I was curious about using NOSQL databases and wanted to get some experience with them. Secondly, some tests that I performed showed that importing and reading advertisements from a MongoDB instance would be significantly faster than doing it on a MySql database. Lastly, the types of queries I will be doing on the advertisement repository are very simple. I will be looking up advertisements exclusively by their primary key. As it turns out, MongoDB also supports auto-sharding, which will make it easier to scale the repository over multiple machines as well.

Integrating MongoDB into .NET was also astoundingly easy. The official C# driver worked right out of the box and since Mongo stores its records as JSON, serializing complete objects into the database is easy as can be.

Solr Search Server

The search component of SellFire will be powered by Solr. Solr is an open source search server that runs the Lucene search engine. I choose Solr because I have the requirement to support advanced, multi-term search. Solr supports compound searches, facet searching, replication, sharding, and much, much more. Again, integration with Solr has been surprisingly simplistic. Solr is also blazingly fast.

The Front End

The front end of the SellFire site consists, at a high level, of two components. The server side infrastructure and the client side infrastructure.

Server Side Infrastructure

The SellFire website is an ASP.NET MVC website written using the Razor view engine. I choose ASP.NET MVC for its simplicity and its strong separation of tiers. The Razor view engine is also a big step forward – writing complex, dynamic views is a lot easier with the abbreviated syntax that it offers.

The models and controllers of the system communicate with a business logic layer written in C#. The system communicates with the MySql database using Microsoft’s ORM technology – Entity Framework. I choose Entity Framework over nHibernate mostly because of the built in Visual Studio integration. However, on the downside, using it currently precludes me from moving over to running on Mono. However, Entity Framework has been working out pretty well for me and really does alleviate the need to write a lot of boiler plate code.

Client Side Infrastructure

At the heart of SellFire’s technology platform is a WYSIWYG Affiliate Store Builder. The store builder allows affiliates to search for products and create customizes product showcases in a point and click fashion. Creating the store builder requires a lot of client side code to be written. Of course, I am using Javascript, but I am using two interesting technologies to make the development go a lot faster.

CoffeScript

CoffeeScript is a great language that compiles into Javascript. It removes all of the semicolons and brackets and replaces them with a white space sensitive syntax. It also adds in some niceties, including higher level looping (for each) and a class inheritance model that is familiar to the world. Writing in CoffeScript feels a lot faster than writing in native Javascript. Also, using the Web Workbench VS plugin, you get built in compilation and syntax highlighting. On the downside, debugging a compilation issue due to incorrect white space can be pretty frustrating sometimes and the compiler seems to have a few quirks. Also, you lose VS 2010′s slick JS intellisense features.

Knockout

Knockout is an MVVM framework for Javascript. It allows you to build client side applications similar to the way you would build a WPF application – with a crisp separation of behavior and presentation. Knockout is a great framework, but I found it to have a difficult learning curve. Not surprisingly, debugging data binding issues in Knockout is as tricky as it is in WPF and can be pretty frustrating. That being said, two weeks into client side development I am happy with the technology decision.

 

What do you think? What technologies would you have used or investigated?

The Business Model

By on October 3, 2011
This entry is filed under SellFire Business. | 1 Comment

There are many different options for how SellFire can monetize it’s services.  In this blog post, I will give an overview of each of the different strategies and the pros and cons of each. Keep in mind as you read that these options are not mutually exclusive and its possible (even likely) that SellFire will employ multiple of them.

 

Affiliate Subscription Model

The affiliate subscription model is based on charging affiliates who use the service a monthly or annual fee to use the service. This model is used by SellFire’s two most serious competitors.  SellFire could also offer different subscription levels. More expensive subscriptions would unlock additional features or allow the affiliate to setup more stores or promote more products. Competitors offer subscriptions that range from free to $100 per month.

 

Pros
  • The affiliate subscription price model gives me the ability to increase revenue as my own costs increases. As the number of affiliates increase, hosting and support costs will also increase.
  • Simple for the affiliate to understand their own cost.
  • Different tiers of subscriptions gives me the ability to charge an additional amount for the features that my competitors don’t offer.

 

Cons
  • For many affiliates, having to pay for SellFire without any guarantee that the service will generate revenue for them will prevent a lot of users from signing up. It is my assumption that the average affiliate makes very little money from their affiliate marketing efforts, so even a small monthly payment may strike them as “too expensive”.  SellFire’s primary competitor offers a free subscription tier with limited features to give small affiliates a way to try the service risk free.

 

Merchant Subscription Model

The merchant subscription model is based on charging merchants who publish data feeds a monthly fee in order to access information gathered from the affiliates that are using SellFire’s service. For example, SellFire could charge merchant’s a fee to see how many affiliates are promoting their competitor’s products, how many “clicks” competitor’s products are getting, and where those clicks are being generated from.

 

Pros
  • The merchant is usually an established business and has deeper pockets than the affiliate.
  • The data they will access is proprietary to SellFire, they won’t be able to get it anywhere else

 

Cons
  • Unsure of the demand. A merchant’s needs for reporting and analysis might already be being met from a variety of other services, including the affiliate networks.
  • Selling data regarding the actions of the affiliates that use our service may make some merchants and affiliates unwilling to work with us, particularly merchants.
  • Would presumably require a lot of active affiliates to use SellFire before the data we had to sell was valuable.
  • The data they would access wouldn’t change too much over time. This may mean that subscriptions would be cancelled quickly.

 

Click Sharing

In the click sharing model, the affiliate does not pay a monthly fee to use SellFire’s service. Instead, they “share the clicks”  that their stores receive with SellFire.  For example, let’s say Bob has a store that he created using SellFire. Under the click share model, every fourth click on a product in Bob’s store from a visitor would be treated as a “SellFire click”. This means SellFire, not Bob, would receive the commission from any potential sale. Of course, the end user of Bob’s site does not know whether his click is a SellFire click or not.

 

Pro
  • Like the affiliate subscription model, revenues would increase with usage, which helps ensure profitability.
  • Affiliate doesn’t have to pay anything to use the service, which could help generate  a large number of users

 

Cons
  • Could foster distrust and conflict between SellFire and affiliates. Affiliates would have to trust that SellFire was only taking an agreed upon percentage of clicks.
  • For successful affiliates, any click sharing model would make the service very expensive to use since they would be losing a percent of their revenues. This means that to attract power affiliates, SellFire would need to offer the flat subscription based model in addition to the Click Sharing model.

 

Ad Embedding Model

The ad embedding model is similar to the click share model. In the ad embedding model, the affiliate does not pay any monthly fee to use SellFire’s service. Instead, SellFire embeds its own advertisements into the stores that it generates for affiliates. If SellFire’s advertisements are clicked, SellFire would receive a commission. This is slightly different from the click share model because it is more transparent to the affiliate how SellFire is making money because it is linked to a particular advertisement.

 

Pro
  • Like the affiliate subscription model, revenues would increase with usage, which helps ensure profitability.
  • The affiliate doesn’t have to pay anything to use the service, which could help generate  a large number of users

 

Cons
  • Adds complexity because SellFire would have to figure out how to select advertisements to embed that were relevant to the store’s content.
  • Affiliates may not like having content on their site that they do not have control over or profit from.

Sizing up the Competition

By on September 21, 2011
This entry is filed under Entrepreneurship.

Every business has competition. If you find yourself thinking about launching a business into a market that has no competition, chances are either you did a bad job in your competitive search or you’re solving a problem that doesn’t exist. Over the past few months, I’ve done a lot of research on SellFire’s major competition. As it turns out, doing a competitive analysis is a time intensive task. However, having gone through the exercise I now have a greater understanding of my competitor’s strengths, weaknesses, and size. This is valuable information that I will use to decide my direction. In this post, I am going to go over the general methodology that I used to piece together the competitive landscape in the affiliate marketing industry. I’m not going to talk about my specific competition in this post, that will come later.  My hope is that people will be able to use these tips to assess the competition for any internet based industry.

 

During my analysis, I was focused on finding, assessing, and sizing my competitors. During finding mode, I was trying to just become aware of all of the competitors in the field. During assessing mode, I did a detailed analysis of their service or product and of the public sentiment towards the company. During sizing, I was trying to ascertain  how many customers and how much revenue my competitors have. In addition, I was also trying to assess how big the market is in general. To accomplish my search, I used a variety of tools and techniques. I’ll explain each one in detail.

 

Internet Forums and Blogs

When sizing up the competition, internet forums and blogs that focus on your niche or customer segment will be your best friend. These sites tend to attract the die-hard customers and players in your industry. The contributors to these sites have in depth personal knowledge and experience and they are giving it all away for free. In addition to reading new posts on forums and blogs, you should also search through their archives for helpful posts.  The posts on forums can help you uncover competitors you’ve never heard of. They can also give you the inside track on what your competitor’s customers think about their product. In the internet affiliate marketing space, the most popular forum is abestweb.com. It has been a wealth of information for me.

 

Good For: Finding and Assessing

 

Compete.com

Traffic estimation sites like compete.com and Alexa help give you an idea of how much traffic your competitor’s sites are receiving. This information can give you insight into the relative popularity and success of each company. Also, if you draw up some assumptions about your competitor’s AOV and conversion rate, you can come up with a rough estimate for their revenue as well.

 

Good For: Sizing

 

Search Engines

Of course, Google is indispensable when conducting any type of search online. However, there are a couple of tricks that I used that can help you uncover valuable content and customer sentiment. The first trick is to search for a few of your most prominent competitor’s name in a single search. For example, search for “dell hp apple gateway”. This type of search usually brings up content that is comparing and contrasting the company’s products or services. Very valuable information.

 

The second trick I used is to search for a competitor’s name along with both positive and negative adjectives like “awesome”, “stinks”, “expensive”, and “affordable”.  While the returned content is the most valuable part of the search, the number of results returned by each query can give you a non-scientific inclination towards customer buzz.

 

Good For: Finding, Assessing, and Sizing

 

Market Research Firms

Perhaps the most direct way to go about assessing your competitors is by commissioning a market research firm to do it for you. I didn’t go this route because it’s very expensive (expect to spend more than $10k) and it also would not leave me with the intimate, first hand knowledge of the industry sentiment I got by doing it myself. However, if you have the cash but not the time, it might be something worth considering.  However, in my research I did benefit from a research paper published by a marketing research company about the affiliate marketing industry in general.  These papers can be a less expensive way of getting projections on market size and direction. You should search forrester.com for any papers that may be relevant to you.

 

Good For: Assessing and Sizing

 

SEC Forms/Investor Reports

If any of your competitors are publicly owned, then you will find a wealth of information in the reports that they are obligated to submit to their investors and the SEC. These reports can tell you information on a company’s revenue, customer count, growth, direction, and risks. In my industry, all of the primary competitors are privately owned so I couldn’t use investor reports to size up the competitor. However, by looking at the reports for companies that are in the general affiliate marketing industry I was able to get an idea of how big the market is in general.

 

Good For: Assessing and Sizing

 

Open Site Explorer and SEO Tools

SEO tools like SEOMoz’s Open Site Explorer are great way to assess who is linking to your competition and where they are getting their “juicy links” from. This can help give you an idea of  the “presence” each company has in the industry. This information can also be used to help you formulate a marketing plan.

 

Good For: Sizing

 

Google Alerts and Google Trends

Google publishes two helpful competitive analysis tools. The first one, Google Alerts, is a tool you can use to keep up to date about what people are saying about your competition. You simply create an alert for each of your competitor’s names and you will get an email from Google anytime they discover a page with a new mention of that name. Google Trends is a tool that you can use to determine how often people are searching for your competitors and how it has changed over time. However, it seems to only work for terms with a larger search volume. For that reason, Google Trends wasn’t too helpful for me.

 

Good For: Finding, Assessing, Sizing

 

Your Competitors Themselves

Perhaps the most obvious way to size up your competition is  to become a customer of them yourself. Put yourself in the mindset of the customer and use their service as a  customer would use them. Where do you find yourself being delighted, excited, confused, underwhelmed, or unsatisfied? How is their customer service? How is their ordering process? Being a customer of your competitor will help you see them in a whole new light.

 

Good For: Assessing, Sizing

 

So, those are techniques and tricks I used during my competitive research. As you can see, it is still ongoing. A successful company always needs to be keeping an eye on the competition. So what about you? What techniques have you used?

What does SellFire do?

By on September 18, 2011
This entry is filed under SellFire Features.

In my first blog post, I explained that the internet start-up I am launching, SellFire.com, competes in the internet affiliate marketing industry and I described at a high level how that industry works. In this post, I am going to explain the services that SellFire will provide. If you haven’t familiarized yourself with how the affiliate marketing industry works, you should read that post first, otherwise you might be confused.

 

SellFire helps affiliates monetize their website traffic by giving affiliates tools that allow them to find, merchandise, deploy, and monitor advertisements on their website.  Let’s break down each of those features into something more specific.

 

Find

Using SellFire, affiliates will be able to search a large database of products, promotions, and advertisements that merchant’s are offering. If you are asking yourself, “Isn’t that what the affiliate network allows affiliates to do? Find things to promote?”, then you are right. However, SellFire offers two added advantages when it comes to locating products to promote. First, it allows affiliates to search an advertisers product catalog. To understand what I mean by “product catalog”, lets take a look at the various types of affiliate advertisements that are in use. There are four primary types of advertisements:

 

  • The Banner –  The banner advertisement is an image that an affiliate embeds on their site. If you’ve been on the internet for only a few minutes, you have likely seen dozens of them.
  • The Text Link – The text link is just a piece of promotional text that the affiliate places on their site. This type of ad is a lot less common.
  • The Coupon - The coupon ad is a promotion that enables the buyer to receive a special promotion or pricing when they enter in a special code on the merchant’s site. You may have seen websites that have an “Enter coupon code” text box during their checkout process.
  • The Product Placement - The product placement is a promotion regarding a specific product. Many merchants release to affiliate networks a file called a product data feed that contains detailed information about all of the products that they sell. The data feed will include a description, price, image, and other details about the product.

 

At first, SellFire will specialize in product placement advertisements. Traditionally, using product placement advertisements has required that an affiliate be pretty computer savy. This is because many affiliate networks do not let affiliates run searches against merchant data feeds. The networks also do not make it easy to tell when the product data feed has changed or become inactive. SellFire will give affiliates advanced search capabilities.

 

Second, SellFire allows affiliates to search multiple affiliate networks at once. To see why this is important, let’s take the example of an affiliate who wants to promote sunglasses. If this affiliate wants to make sure they find the best product with the best commission structure, they would need to join and then search for sunglasses on  several affiliate networks.  However, SellFire integrates with all of the largest affiliate networks. This lets affiliates be sure they have located the advertisements that is best for them in a single search.

 

Merchant Consolidation

SellFire consolidates advertisements from multiple affiliate networks

 

Merchandise

In addition to improved search, SellFire offers affiliates  tools that allows them to build web pages and components that display their advertisements in a professional and effective manner. To understand the value of this feature, you first need to understand more about product data feeds. As I explained earlier, a product data feed is a file published by a merchant that contains information on the products that they sell. If you were to open up a product data feed file, what you would see is something that looks like this:

 

Product Name Description List Price Image URL Buy URL
Sony 42″ LCD TV This TV is great. Has a beautiful picture! $1000.00 http://www.jaystv.com/image1.jpg http://www.jaystv.com/sony42
Samsung 60″ LCD TV A 60″ TV will have you feeling like you’re at the movie theatre! $2000.00 http://www.jaystv.com/image2.jpg http://www.jaystv.com/sams60

 

Obviously, the data feed file is not in a format that can be presented to users of the affiliate’s website. The content needs to be transformed into an advertisement that is compelling and easy for the site user to read. SellFire’s software allows affiliates to build storefronts and product pages in a point and click manner. Using the software, affiliates will be able to easily turn the information in that same data feed file into a professional looking product results page like this:

 

Sony TV

Sony 42″ LCD TV

Now only $1000.00!

This TV is great. Has a beautiful picture!

 

Buy Now!
Sony TV

Samsung 60″ LCD TV

Now only $2000.00!

A 60″ TV will have you feeling like you’re at the movie theatre!

 

Buy Now!

 

In addition to simple product advertisement generation, SellFire will offer additional merchandising tools and services which I’ll talk about more in a future post.

 

Integrate and Deploy

The third benefit SellFire provides is that the software makes it easy for affiliates to deploy the advertisement displays built on the SellFire site onto their own site. The affiliate can choose from multiple ways to integrate their advertisements into their site. They can add a simple blurb of Javascript, use a WordPress plugin, or for the more technically inclined, use  a web service API. Their is no complicated code to write or HTML to maintain. SellFire does all of that for you.

 

Monitor

The fourth benefit provided by SellFire is that it monitors the advertisements on its members sites to ensure that they are both enabled and accurate. The advertisements on an affiliate’s site can become deactivated or inaccurate for lots of different reasons. The merchant selling the product or service could run out of stock, go out of business, change the price, or remove the example image. If the two become out of sych, or if the merchant stops selling the product all together, the affiliate is wasting valuable advertising space with an ineffective or broken ad.

 

SellFire’s monitoring service constantly checks the affiliate and merchant web sites to make sure that the advertisement that is on an affiliate site stays up to date with the product description on the merchant site.  When the service detects a difference, the affiliate will be notified. Without this service, affiliates would have to manually check each of their links to ensure that the advertisement is active and accurate.  This would be a serious time drain since many professional affiliates maintain hundreds or thousands of links.

What is Internet Affiliate Marketing?

By on September 15, 2011
This entry is filed under Affiliate Marketing.

When I tell my friends, family, and coworkers that I am leaving my full time job to launch an internet startup, the obvious question I hear most often is “What is your company going to do?”.

 

A dozen or so blank faces later, I’ve found out that my business idea is not easy to describe to those that are not indoctrinated into the world of internet affiliate marketing. This is definitely a risk to the business. How am I going to sell customers my service if they cannot understand it? So, before I write in detail about the services that SellFire will provide, I figured a good inaugural blog post would be an in-depth explanation of the industry where SellFire will play.

 

SellFire competes in the internet affiliate marketing industry. In order to understand the affiliate marketing industry, you have to know about the three major players: internet merchants, internet affiliates, and affiliate networks. An internet merchant is something that everyone is already familiar with. These are companies that sell something online. Think Amazon.com and Overstock.com. Those are two examples with name recognition, but of course there are literally hundreds of thousands of companies trying to sell their products and services on the internet.

 

An internet affiliate may be a concept you haven’t heard of, but if you browse the web regularly you have definitely seen their work. An internet affiliate is a person who markets the products or services of a merchant. In return for their marketing efforts, the merchant compensates the internet affiliate. All internet affiliates work solely on commission. Merchants only pay affiliates when the affiliate’s marketing efforts result in either a sale or a visit on the merchant’s website. Internet affiliates generally own and operate their own websites and blogs. Affiliates place advertisements and product reviews on their website. If visitors to the affiliate’s site click an advertisement and subsequently place an order, the affiliate gets paid by the merchant.

 

Let’s try to make this really simple by showing an example interaction as a picture.

Affiliate marketing description

The interaction in the example above is:

  1. A person visits a website blog
  2. The blog is owned by an affiliate who advertises for Amazon. The blog has Amazon advertisements.
  3. The person clicks the Amazon advertisement on the blog and then buys something from Amazon.
  4. Amazon pays the affiliate a commission on the sale

 

Here is a “live” example of an internet affiliate:

 


If you click that link and buy anything from Amazon, then Amazon will give me a commission.

 

So, now you understand what an internet affiliate and merchant is. But, how do affiliates and merchants find one another? How are these business relationships made? There are three primary means in which a merchant and an affiliate can connect:
 

  1. The merchant finds the affiliate site via a search engine or other form of research, and contacts the affiliate directly.
  2. The affiliate recognizes that their website traffic represents a target audience for a merchant, and contacts the merchant directly.
  3. The affiliate and the merchant are connected via an affiliate network

 

Affiliate networks are the middle man in the affiliate marketing industry. Successful affiliate networks work with thousands of merchants and tens of thousands of affiliates. You may have heard of some of them such as Commission Junction or Share A Sale. The networks provide the following services:

 

  1. Act as a place where merchants and affiliates can connect and find one another. Merchants can search for affiliates and affiliates can search for merchants.
  2. Provide merchants with tools to upload information about their advertisements and promotions to the network
  3. Provide affiliates with a search engine to find advertisements and promotions relevant to their website’s audience.
  4. Provides tracking software and acts as a neutral third party to ensure that the merchant is paying the affiliate the correct amount

 

This is the industry where SellFire will play, internet affiliate marketing. The major players in the affiliate marketing industry are affiliates, merchants, and affiliate networks. In the next blog post, I will describe what service SellFire will provide to these parties.