The Benefits of Joint Venture in Affiliate Marketing and Risk Involved
A joint venture (JV) is a business agreement between two or more companies to pool their resources for accomplishing a specific task. This task can be a specific activity of a project or a complete project.
Depending upon the agreement, the participants in the joint venture will have their share of Profits and are responsible for any business losses and costs. However, the Joint venture is an identity on its own and is separate from individuals business.
There are a lot of reasons for joining a joint venture like Cost splitting, utilizing special skills of all the participants required at different stages, and minimizing the loss percentage.
Affiliate marketing involves a lot of work and there is enough scope for forming Joint Ventures. Joint ventures are equally beneficial for new affiliate marketers and experienced ones.
Many affiliate marketers though prefer to outsource specific jobs like content creation, Social Medial Management, or web designing as they may not be fully aware of the benefits of Joint Venture in Affiliate marketing.
It is not possible for anyone to be master all the skills required for affiliate marketing as learning all the skills needs a lot of time, patience, and of course talent to learn everything.
It is also possible that someone may possess all the skills required for affiliate marketing but would be interested in taking the advantage of a Joint Venture for expanding the business.
Here are some of the benefits of Joint Venture in Affiliate Marketing.
Shared investment :
Every participant in the Joint venture Contributes a certain amount required as initial capital as per the Joint venture agreement. This will help in reducing the financial burden on each company.
Lend Unique Skill Set :
The benefits of Joint venture in Affiliate marketing can be derived from the combined knowledge of both or all the participants to achieve the ultimate goal of the venture.
One Person or company may be good at creating a website, Content writing, and SEO whereas the other may be more proficient in digital marketing and running social media campaigns.
A Joint venture between these two will ensure that the right person will perform the right task to achieve the goals very fast.
Increased productivity :
The main objective of any collaboration is to increase productivity and therefore keeping the product cost at the most reasonable price. A genuine joint venture aims to provide the best products and services to its consumers thereby staying ahead of competitors in the market.
The available resources and combined knowledge brings different opinions and a healthy discussion lead to better planning, scheduling, and managing the services.
In case the desired results are not achieved in some activity, less time is wasted in course correction and reorganizing the efforts due to the presence of knowledgeable resources in every field.
Penetration in New Segments :
The Joint venture in affiliate marketing enables the marketers to enter a new domain or segment quickly. It is not possible for affiliate marketers to have knowledge of each niche.
Some digital marketers have the skills to develop their own products, some others are more efficient in promoting the affiliate products created by others while few others may be happy in training the people.
A joint venture between them will help them to tap a new market very quickly.
Sharing the lists of Present Customers:
The outstanding benefits of a joint venture in Affiliate marketing are that you can share your customers or contacts. The product can be promoted to the combined email list of each affiliate marketer participating in the Joint venture. This allows all the participant to expand their circle of contacts, share them, and hopefully reach a much wider audience
Faster returns on investment :
As discussed the Joint venture would help in increased productivity and reducing the cost of the product, the return on investment will also be faster.
Networking is the backbone of any business. Arranging and attending conferences or webinars, interacting on Social media, Following businesses on LinkedIn are all examples of Social Networking.
A joint venture between two experienced affiliate marketers helps them in extending their Network and therefore will help in increasing their individual businesses also.
Tips For Entering a Joint Venture :
When you decide to enter into a joint venture with someone, It has to be for the mutual benefit only. Each of you should have some special skills or bring something unique to the joint venture.
Even if you are new and trying to enter into a joint venture with some experienced person, you must show another person what value you can add to the partnership.
Maybe you can handle the content writing better or can bring fresh ideas for marketing the products and therefore may look after the marketing activities.
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Disadvantages of Joint Ventures:
Joint ventures offer many benefits but they are associated with some risks as well.
Different Objectives :
You may have a different objective from the other partner. In some cases pursuing different objectives may threaten the success of the venture.
Therefore, it is important to frame and document the well-defined common objectives of the joint venture to avoid any confusion later on. The Common objectives may be communicated very clearly to all stakeholders.
Imbalance in Expertise and Workload:
In an affiliate marketing joint Venture, it is quite common that both the partners have many similar skills and would be interested in doing that task.
On the other hand, One person may possess more skills as compared to the other partner and have to take more workload.
In such a scenario, the partner contributing more may start feeling that a 50: 50 distribution of profit is not right. This can be avoided by clear communication and a well-drafted agreement before entering into a joint venture so that each person clearly understands – and readily accepts – his role in the JV.
Cultural Mismatch :
An affiliate joint venture may not be people living in the close vicinity or in the same type of society. The cultural mismatch may lead to different management styles and can lead to poor integration and cooperation.
This can be avoided by establishing a proper communication channel and removing any cause of differences that may arise.
Differences in Opinion:
It is not necessary that the partners have the same opinion about every aspect of the business. The Difference in opinion is actually not a bad thing but may sometimes become a cause of big conflict.
To avoid any conflict arising out of the difference in opinion can be handled by listening to others with patience. ANy opposing ideas must be evaluated logically and with a willingness to accept if it offers a better solution. Personal ego should be set aside for the benefit of the business.
How to Overcome Power struggles :
Power struggles can are part and partial of the business and can not be totally avoided. When it comes to running a joint venture with a partner, power struggles can range from selecting an idea or outsourcing some work or any other thing.
It is very important to equip yourself with ways to manage the power struggle and avoid negativity in business.
The simple and logical ways to avoid Power Struggles are
- Define Roles
- Respect each other
- Listen carefully
- Don's rush into the decision.
- Visualize the outcome
Are Joint Venture Good In Affiliate Marketing?
Joint ventures are formed to meet certain objectives. They are not long-term partnerships. By carefully entering into a joint venture the risk mentioned above can easily be avoided.
Joint ventures offer many benefits as explained above and if all the aspects have carefully been discussed and agreed upon, there is no reason why the joint venture should not work.
Partnering with other affiliate marketers is complex and it takes time to understand each other and build relationships but it is difficult to avoid all the issues.
The success of the joint venture depends on careful planning, clear communication, and a clear agreement
Success depends on careful planning and communication. A clear agreement is an essential part of building a good joint venture relationship. The arrangements should be fair to both partners.
The possibility of success can further be enhanced by
- Fixing clear responsibilities
- Setting realistic goals.
- Understanding the Business objectives.