Affiliate Marketing For eCommerce – How Does It Work?
As the owner of an eCommerce business, the shoe now is on the other foot. Getting your products into people’s hands, working on your organic SEO, investing in paid ads can all be confusing and hectic.
But here’s the good news.
Affiliate marketing for eCommerce can quickly increase your brand’s exposure and online sales without even paying a dollar upfront.
Continue reading if you want to learn:
Affiliate Marketing is, by definition, a marketing model based on commissions from sales. It is a cooperation between two figures, the advertiser (eCommerce business) and the marketer (affiliate).
Marketers earn money by selling a brand’s products. They get paid when a consumer to whom they have promoted a brand purchases a product or service of that brand or takes a certain action.
Affiliate marketing for eCommerce in numbers
Let us have a look at some stats:
81% of brands use affiliate marketing programs.
Affiliate marketing accounts for approximately 15% of all digital media industry’s revenue.
38% of marketers consider marketing one of the top customer acquisition methods.
In 2015 Amazon’s revenue surpassed $100B, and affiliate marketing accounts for $10B of its sales.
Advantages of affiliate marketing for eCommerce
- Use a talented and experienced sales force but only pay them when they sell. You just have to set a percentage of your product’s price designated for affiliates.
- Everything is trackable
- High return on investment.
- Increase the brand’s exposure.
- Social proof, especially when partnering with trusted bloggers and influencers.
- Increase in online sales
- Acquisition of new contacts
- Increase site traffic
Disadvantages of affiliate marketing for eCommerce
Affiliates can compete with your marketing efforts: organic searches in search engines like Google, SEO, and PPC.
A 2011 study showed that 60% of affiliate marketers use Pay Per Click to drive sales and promote their affiliate links.
But either way, it is better to compete with your own affiliates than with market competitors. Affiliates can still bring sales while competitors won’t.
Another drawback is that affiliates can negatively expose your brand by using sketchy tactics such as email spam, misleading advertising, trademark infringement, and any other low-value practices. Establishing strict promotional guidelines and monitoring your affiliate partners will give you more control and make sure they remain compliant.
Is your business suitable for affiliate marketing?
The fastest and easiest way is to check if your competitors are already running one. They will likely have placed a link in their website footer to their affiliate program if they have one. If you find competitor affiliate programs, look at their commission rates to understand what affiliates expect in your market.
If your competitors run a program and you can afford to compete with their commissions, that might be a great option to add to your online sales plan.
Affiliates want to work with sites that convert, so your website must be optimized for sales and have a high conversion for affiliate marketing to be a realistic option.
If you have highly sought-after products and a good margin on sales that can allow you to offer attractive commissions to affiliates, especially if your competitors don’t have their own affiliate program, it could be a great move to create yours.
Affiliate Networks: What are they?
Instead of manually creating your affiliate program, the typical experience is to use an affiliate marketing network to set everything up. The process is pretty straightforward: you find a network with terms that work for you and send a product feed. The network then creates personalized URLs for registered marketers and begins tracking the resulting sales.
How do you choose the right affiliate network?
Look at things like success rates, fees, product specialties, the number of marketers, and how user-friendly the platform is.
Affiliate networks settle between affiliates and businesses, adding a third party to the sales mix.
They indeed make life much easier as they connect affiliates with products they may not find on their own and provide sellers with an extensive database of potential partners to work with. But, as you can guess, this comes at a price.
Your affiliate program terms must comply with that of the network, and a significant portion of the money goes into their monthly maintenance.
Most of the big brands are part of an affiliate network. Rakuten Marketing and ShareASale are two well-known examples. Other more accessible affiliate networks include Amazon and Skimlinks.
What are the best affiliate programs for eCommerce?
According to Business Insider, revenue from using affiliate programs has grown 10% annually since 2015, and this is expected to continue through 2021. In addition to Amazon Associates and its well-known affiliate program, many eCommerce businesses have similar strategies.
Etsy Affiliates: Despite its low 4% commission, Etsy has one of the most attractive affiliate programs, with a large variety of products that appeal to a huge audience.
eBay Affiliates: With very high commissions, between 40% and 80%, eBay’s affiliate program competes with Amazon’s, offering various solutions to monetize third-party websites and applications.
The Zalando Partner Program: Zalando’s affiliate commissions are 8%, but it has a wide selection of clothing, accessories, and shoes with a community of customers and a recognized brand, which brings added value.
AliExpress Affiliate: With a variable commission of up to 50%, AliExpress competes with the previous ones, although it was launched in 2010.
Affiliate marketing examples that will inspire you
Amazon: The “Every Day Carry”
Amazon affiliate program is not about the commissions earned, but for the variety, security, and prestige of Jeff Bezos’ eCommerce. One of the best examples of affiliate marketing strategies is the Every Day Carry, an interesting review site for articles and utilities to carry every day that can help resolve incidents or emergencies.
In Every Day Carry, it is possible to find Swiss army knives, watches, torches, gadgets, backpacks, notebooks, and other products, which are indispensable in the adventurous public’s luggage.
Home Depot: The Consumer Search Site
Consumer Search is a product recommendation and analysis site created in 1999 to eliminate the commercial exaggeration and dishonesty of brands on the Internet.
By examining each new product, Consumer Search can recommend the best of the best from each category and niche. Consumer Search revenues come from affiliate links of The Home Depot, a popular US retailer of DIY and home products. While Consumer Search earns a commission for every sale, The Home Depot increases visitor traffic and builds powerful backlinks.
The above affiliate marketing examples are certainly very inspiring. But startups and midsize businesses shouldn’t think this marketing strategy is out of their league. Regardless of their size, industry, or product, all online retailers can successfully launch their own affiliate program.