The Ultimate Guide to Starting a Successful Affiliate Program for Your Ecommerce Brand

If you are looking for new, more cost-effective ways to acquire new customers, promote our brand and drive more sales to your store, it may be worth exploring affiliate programs for ecommerce. 

Affiliate marketers are becoming super popular, especially now with the rise of social media. Bloggers, influencers and anyone who has expertise in a certain niche area along with a well-build audience can help you in your efforts to drive more sales-qualified traffic to your store.

A few key things to know about affiliate programs

An affiliate program is a reward-based system, where your partners promote your products and are rewarded with a commission when their promotion efforts result in a sale. 

The obvious benefit from running an affiliate program is that you don’t have to do the sales yourself, but you can rely on the expertise of the partner. Another benefit is that the costs of getting that sale are relatively small and very targeted; you’re only paying when a successful sale occurs.

Your profit margins play a huge role into whether an affiliate program is right for you. If they are small, you may not be able to pay the commission to the affiliates. 

What are some popular use cases that affiliate programs can support?

Increasing store traffic - when you’re working with an affiliate who has built an audience or people who are your potential customers, you can significantly increase the traffic to your store, with relevant visitors. This is important, because you’re not just looking to drive any type of traffic to your store, but people who are actively looking for what you offer.

Build brand awareness - if this is your goal, then using an affiliate program might be a very good idea. Affiliates usually work in a specific niche because most often than not, they have some expertise with the products. That means their audience are people who are interested in the product or service and are potential buyers. Having them promote your brand puts it on the map of these people who might be ready to buy now, or are going to buy in the future. 

Promote new product launches - a lot of brands use affiliate partners to promote the launch of a new product. This immediately pushes the product in front of a large target audience, people who are interested in your offer. 

These are just a few use cases where an affiliate program may be interesting to try.

Ready to launch yours? Keep on reading. 

What you need to know to launch your affiliate program

Define your commission offer

The reward you give to the affiliates for driving successful sales to your store is called a commission.  The commission can be a percentage of sale, flat rate per sale or a tiered commission structure. The most popular commission type is percentage of sale and this usually varies between 5% and 30% of the sale.

Bonus tip: when defining your commission offer, start with your profit margin - how much can you afford? Next, do some research: take 2-3 of your competitors who do affiliate programs and check out their offers; are they close to what you’ve determined? This is enough material to get you up and running on defining your offer for your program. 

Find an affiliate program management software

The hard part in managing an affiliate program is assigning affiliate links and codes and then tracking affiliate sales effectively. This is why getting an affiliate management system is important and highly recommended if you plan on doing a scalable affiliate program.

You can choose from many different types of affiliate software; there are apps on the market that are dedicated entirely to affiliate management and then there are the more comprehensive tool sets that combine loyalty, referral and affiliate marketing programs. This type of software may be interesting for bigger brands with a big loyal customer base that can serve as a pool of potential affiliates.

Recruiting affiliates

There are 2 ways you can go when thinking about recruiting affiliates: start and own the recruitment process from scratch or join an affiliate network and connect with partners in your industry. 

Both ways are interesting in their own way and have their own pros and cons. 

Owning the recruiting process

The pros of this way is that you control who can become an affiliate for your brand. You can ask for as much information as you need to qualify an affiliate application and decide whether you want this partner to promote your products. 

You have the freedom to customize the recruitment process, to provide as many promotion materials as you deem necessary and to be creative in the nurturing campaigns for your partners.

Another pro here is that you’re entirely responsible for building and nurturing the affiliate network, meaning, you’re not paying a commission to a third-party provider for finding you affiliate partners. 

The cons of this method is that it requires a resource to be dedicated to designing and managing the program in all its aspects: creating the offers, screening the applications and affiliate orders as well as sending out payments. There’s also the most important part, nurturing your affiliate network.

Using an existing affiliate marketer network

It’s easy to find an existing affiliate marketer network that has expertise in your niche area. The obvious pros here start with the ease of finding the affiliates - you don’t need to reach out to them or do ads to attract them to apply to your program, the network provider instantly connects you with the ones who fit your needs. 

Another pro is that you don’t have to spend too much resources on managing the network, the affiliate data or the nurturing process - the network will handle all of that for you. 

The cons on the other hand, start with the fact that you don’t own your precious affiliate data - you can’t access it to analyze it and draw conclusions from it which might help you in some business aspects. 

Another con is that there’s usually a fee that the network charges on top of the commission you have to pay to the affiliate partner. So if you’re just starting with affiliate programs and have small profit margins, this may not be the best way to start. It can impose a huge financial burden on you, and it will not produce the results you want to see. 

Educate and nurture your affiliate network

Assuming you decide to own your affiliate network, you’d want to make sure that you’re building relationships in the long-term. 

For that, you want to make sure your affiliate partners are very well prepared with promotion materials for your products or services, understand your value proposition and can effectively communicate this to their audiences. 

Besides the basic training, you want to make sure you constantly communicate updates to the affiliate partners - keep them in the loop with anything new that happens in the company, and they should be aware of. A good practice here is to send a weekly or monthly newsletter with all the updates and exciting news that affiliates would find valuable. 

Finally, go a step further and reach out to them directly from time to time; whether it’s a phone call, a Zoom meeting or an email. You want your affiliates to know they can count on you should they need any help or have a specific question they can’t answer themselves.

Measure and track performance of your affiliate program

If you’re using affiliate management software, this should be easy to do - the system should produce detailed reports with information on how well your affiliate program is performing. 

Here are some metrics to keep an eye on:

ROI - tells you how successful your affiliate marketing program is for your brand. It is a key indicator of the effectiveness of your affiliate program.

The formula to calculate your affiliate marketing campaign ROI looks like this: (Affiliate Marketing Value Generated – Affiliate Marketing Investment) / Affiliate Marketing Investment x 100 = ROI %.

Average order value - this is a very interesting metric to look at carefully. Is the average order value of affiliate orders bigger than orders coming organically to your store? Or smaller in value? This should give you an idea of where to direct more of your resources and attract more of the audience that spends more on average. 

Order count - how many orders are coming in from affiliates in a given time period? Is this an effective sales channel? If so, how can you scale it to increase this number even more?

Program promotion - how to build your affiliate network

The more affiliates you have working with your brand, the higher the opportunities for increasing sales, spreading the word about your brand and driving more relevant traffic to your online store. So, make sure affiliates know about your program and can easily apply to become part of it. Here are a few tips on how to best achieve this:

Give information about the program on your website

Don’t bury your affiliate program somewhere on your site where only a master browser will find it. Remember, this is a brand asset, and as such it should be very easy for interested applicants to access it. 

Create a dedicated page with an explanation of why affiliates should apply to work with you and then provide your offer details. 

Offer an easy to fill out application with as much relevant information as possible for you to easily qualify it.

Ads

Depending on your product and the market you’re trying to reach, ads to promote your affiliate program may be a great way to build your network. 

Where are the popular affiliates you want to work with communicating and looking for affiliate opportunities? Promote your program there. 

Instagram Highlight

Just like you’d do with your loyalty program, creating an IG highlight with all the details and some testimonials from successful affiliates can increase the amount of applications you receive. It’s a great way to increase program visibility but also to add to the value of your brand. 

Direct reach out

Sometimes directly reaching out to an affiliate can be the best way to ensure you work with the right people. This approach gives you a lot of freedom to target the people you believe are a good fit for your brand but also, to explore opportunities within your existing customer community. For example, a customer who drives a lot of referrals for your brand, may be interested in becoming an affiliate as well. An encouraging nudge from you may be just the right approach to gain another member to your affiliate network. 

Wrap up

Affiliate marketing is a very powerful tool for growing an e-commerce business because of the way it presents products and services. The detailed visual and contextual explanation of the various use cases a product can solve for from the point of view of different user types that customers can relate to, is probably the best strategy you can deploy to make sure your products are loved by the right people. 

With a solid program in place and a detailed plan of how to manage the program’s assets (its affiliates and product materials) you can start driving affiliate sales for your brand and grow your business.