Building your e-commerce success is a costly and time-consuming endeavor. Especially new players struggle to grow sales and attract new customers. Naturally, there are several solutions to this problem, and affiliate marketing for e-commerce is one of the most effective ones. After all, you need quick and measurable results. Affiliate marketing (AM) allows you to attract new customers, measure your efforts, and, ultimately, grow sales. With no upfront costs! How is that possible?
If you are an aspiring e-commerce entrepreneur, you realize how important it is to devise a comprehensive growth strategy. Without new customers coming to your store every month, you are in dire straits. Affiliate marketing is the solution you ought to be particularly interested in. Why? And what are the benefits of affiliate marketing for e-commerce? Read on!
What does affiliate marketing look like?
The general idea of affiliate marketing for e-commerce is relatively straightforward. There’s you–an advertiser, and there are publishers (affiliates). You, as an advertiser, have a product you want to advertise and sell. On the other hand, publishers have space (a website, a Facebook profile, etc.) and already grown communities of followers. Affiliates promote your products, and they receive a commission every time someone from their community places an order in your store.
Generally speaking, settlements in affiliate marketing for e-commerce are based on three models. As an online store owner, you can pay for every:
- Sale: The commission is only due after someone places an order in your online store.
- Lead: You pay for other actions like, for instance, newsletter sign-ups, social media follows/likes, ebook downloads, VIP club applications, etc.
- Click: Affiliate marketing can be settled on the CPC (Cost Per Click) basis. If you’re after driving more traffic, it’s your best bet.
What are the benefits of affiliate marketing?
Affiliate marketing is a strategy that offers some significant benefits for both parties. Let’s analyze the essential ones:
Almost no upfront costs
First and foremost, there are virtually no upfront costs. All you have to do is devise a decent affiliate marketing strategy and find publishers. If you are at the very beginning of your e-commerce journey, you can do that yourself or use GrowthHero to build, manage, and optimize your partner programs.
A scalable solution
In affiliate marketing, like nowhere else, economies of scale play a crucial role. The more partners (publishers) you have, the more traffic flows through your website. As a result, you sell more.
You pay just for the result
When it comes to affiliate marketing for e-commerce, everything is transparent and clear. You pay just for the result (new customer, new lead, more traffic, etc.). You can track and measure your efforts and results. Affiliates are also safe. They can generate custom affiliate links and use them to promote your products. Every time someone buys through such a link–the commission is charged.
Supposedly, your publishers will be well-recognized in their communities. Through years of hard work, they’ve gained trust and respect. And now, you also have the opportunity to share that reputation. If your partner says that it’s worth buying in your store–the vast majority of their followers won’t question that opinion and simply place an order.
The possibility to expand your offer
Lastly, affiliate marketing facilitates your business development. Whenever you want to expand your offer and reach a new target audience, you can! All you have to do is find new publishers that will open the door of this new niche for you.
Affiliation programs on the rise
The e-commerce entrepreneurs understand and value the affiliate marketing’s potential. It’s clearly visible in numbers:
- 81% of brands rely on affiliate programs
- 84% of bloggers (publishers) use AM to grow their audiences
- 73% of the merchants (advertisers) reported that their affiliate revenue met their needs
- AM accounts for 15% of all digital media revenue
All of these stats tell one story–affiliate marketing is your must-have. Did you know that even Amazon has their own affiliate marketing program? Therefore, you should too!
Now, your job is twofold:
- Devise a perfect affiliate marketing strategy
- Find an affiliate marketing platform that meets your needs
Devise a perfect affiliate marketing strategy
There are a few things you have to take into account when thinking about your affiliation program:
Do some research
Try to find out what affiliate programs are prevalent in your sector. Make a list of your main competitors and look for the affiliate section on their websites. You can even sign up as a publisher for some of them and see the terms of cooperation.
Calculate your CPA
CPA (Cost Per Acquisition) is your starting point. You have to know how much you pay for each new customer and how much you can AFFORD to pay to keep your business profitable.
Set your goal and a commission rate
Your goal should be measurable and straightforward. For instance, you could want to increase revenue by 5,000 USD by the end of the year. Only when your goal is measurable you can verify if it has been achieved and when.
Next, calculate your commission rate. Take your margin into account as well. If the commission rate is too low, people will not be interested in promoting your products. On the other hand, if it’s too high, you won’t make any money. Find your golden mean. Typically, a commission in e-commerce is between 5 and 15%.
We encourage you to read more about our affiliate commission calculation strategies.
Know how to attract affiliates
The whole point of a successful affiliate marketing strategy is based on a developed network of affiliates. Generally speaking, you have to make your strategy as attractive as possible. Keep in mind that your competitors try to get to the same publishers! If your affiliate program is not attractive enough, affiliates will go somewhere else, where they will have the opportunity to make more money. Think about what you can offer them. Again, some research might be useful. Try to find out what conditions are considered agreeable in your sector.
For instance, take a look at our Campaigns section. It can be a great way to reward your affiliates for their extra efforts! And here’s another idea: You can “upgrade” your affiliates’ profiles when they reach specific goals or meet your conditions. We call that Partner Tiers, read more about this approach.
How to find an affiliate marketing platform for your Shopify store?
If you want your AM activities to be effective and measurable, you need a platform that will enable you to:
- Track affiliate orders
- Manage your partners
- Generate and distribute affiliate links or discount codes
- Analyze data and results
We designed GrowthHero to be intuitive and versatile. No matter what kind of e-commerce business you run–our solution will meet your needs. And if you need some extra features–just drop us a line and explain what you’re after. Most likely, we will be able to deliver you such a feature!
THE SHOPIFY AFFILIATE PROGRAM
If you run an online store on the Shopify platform, you probably wonder if it’s possible to start a Shopify affiliate program. Luckily, yes! In fact, you can start by simply installing a GrowthHero app for your Shopify store.
All you have to do is go to GrowthHero – affiliate marketing for Shopify, type in your Shopify address, and start a free trial integration. From there, our platform will take you through an onboarding process that will prepare your store for the brand new Shopify affiliate program! Affiliate marketing plays a more and more significant role in the modern e-commerce industry. Make the most of it and start your GrowthHero free trial today!