An eCommerce affiliate program is a low-risk, high-reward way to drive qualified leads to your website.
When you have a network of reliable affiliates, it takes relatively little effort to get customers through your checkout. A well-executed affiliate program can boost revenue by a hefty 30% and you rely on your affiliates to handle acquisition and activation.
Even so, not all eCommerce businesses have an active affiliate program. If you don’t have an affiliate program yet, or if you have one but want to grow it, here’s a quick guide.
How an eCommerce affiliate program works
An affiliate program is when you use other people or businesses to promote your products or website, and pay a commission whenever they successfully generate a lead or sale.
This is usually achieved by assigning your affiliate partner a unique tracking URL. They then share that link with their audiences via blogs, social media posts, Google Ads, email newsletters, etc.
Once someone clicks that link and then converts (or takes whatever action you designate as the payout CTA), your affiliate gets paid.
Benefits of an eCommerce affiliate program
Affiliate programs are a hugely successful marketing tactic, especially for eCommerce stores. You get access to new marketing ideas, multiply your audience across your affiliate partners’ networks, get a cost-effective lead generation channel, and can leverage testimonies to get customers to your website.
1) Access to new marketing ideas
Affiliates are usually experienced when it comes to marketing new ideas to their niche audiences. They typically use blogs, social media, video, podcasts, PPC ads, and other marketing tools to acquire, activate, and engage customers. They may even have some unique ways of marketing that you haven’t tried before.
Having an affiliate program rewards creative marketers when they help your brand reach niche audiences in creative ways, getting you sales you wouldn’t have otherwise gotten on your own.
Your affiliate program is a great way to gain access to new and different content, channels, and customers. As you observe the tactics and success of your affiliates, you can glean new information that could even help you optimize your own marketing.
2) Expand your reach to others’ networks
Whether your affiliate partners are career affiliate marketers who are part of multiple programs, or avid fans of your brand who are only part of your affiliate program, your affiliates will all come with their own valuable networks.
These are networks that your affiliates will already have learned about, engaged, and built relationships with. Working with an affiliate gives your brand access to this new network, with the lead nurturing work already done for you.
3) Pay for what you want
When you create your affiliate program, you can determine what constitutes a payout. That means you decide what a lead needs to do in order to qualify for their referrer to be paid.
If you want a low barrier to entry, you can offer a small reward for website signups, or a percentage of all sales that come from a unique referral link. Rewarding a percentage of sales incentivizes your affiliates to send high-spending leads your way, since they get a direct proportion of sales.
Since you decide whether you pay affiliates per click, lead, or sale, you have more control over your marketing spend. You also protect your profits against unsuccessful affiliate marketing campaigns – no leads, no time or money lost.
4) Leverage social proof and trust
According to Nielsen, 92% of people trust recommendations from family and friends over other advertising.
A good affiliate partner knows what their audience would enjoy, and would have spent a long time curating their suggestions and earning their network’s trust.
Affiliate marketing allows you to leverage social proof from someone your target audience trusts, and extend that trust to your brand by association.
What to look out for in an affiliate program
An affiliate program has many benefits, but don’t rush in without understanding these few challenges either. It can be easy for affiliate partners to misrepresent your brand, make you look unprofessional, find loopholes that cost you money, or drive up your ad spend.
1) Terms and conditions
On the whole, affiliates are hard-working, honest members of the marketing community. However, there is a chance that some unscrupulous affiliate tries to increase their commission by finding loopholes, exploiting grey areas, or falsely inflating their numbers.
Protect your eCommerce affiliate program from fraudulent activity by having your terms and conditions drafted by a professional. Consult with a lawyer who can advise you on common affiliate program terms and those specific to your industry or niche.
Examples of conditions you may want to consider are:
- Affiliates cannot be employees or family members of employees (if you have a referral program, employees could be diverted there instead)
- Leads or sales cannot come from family members or anyone under your affiliate partners’ employ
- Returned products do not qualify for commission payments
- Payouts are sent periodically every 30 days
- New affiliates will receive a payout 30 days after signup, or the payout date after that (this is to cover any return policies you may have)
2) Professionalism and content quality
Just like an affiliate can promote trust in your brand by association, they can also damage your brand image by association. Poor marketing practices, such as spamming purchased email lists, using disguised links, or excessively posting on social media, can give customers a negative opinion of your brand.
To avoid this, define the marketing standards expected from your affiliates at the beginning of each relationship. You should also regularly monitor their activity to ensure they’re representing your brand accurately and professionally, and raise any associated complaints immediately.
Tip: Look out for warning signs such as a high number of clicks, but no signups or sales.
3) Increased ad spend
It’s common to see your ad CPC increase when running an affiliate program for your eCommerce business. This is because your affiliates will likely be using CPC advertising methods too, giving you a little extra competition to bid against.
This isn’t necessarily a bad thing, but if you want to avoid it, you’ll need to define what keywords your affiliates are allowed to bid on as part of your affiliate program. For example, you can say that affiliates cannot bid on your brand name or trademarks in any advertising campaigns.
Be sure to add these requirements into your terms and conditions that all affiliates must agree to prior to joining the program.
How to set up an eCommerce affiliate program
Now that we’ve covered the basics, the benefits, and the risks of affiliate marketing, let’s look at how to set up an eCommerce affiliate program.
1) Determine how to run your program
First, you need to nail down the logistics of your affiliate scheme, including tracking, tools, and payouts.
1. Choose your tools
As with all aspects of your eCommerce business, you can choose to run your affiliate program manually using supportive software, or by using all-in-one software. Here are some tools that can help.
If you’re manually managing your program, you can trace conversions back to the relevant affiliate using:
- Google Analytics to identify the source of the conversion
- Your eCommerce platform to create unique landing pages
- A discount code generator to assign unique codes
Tip: When you give your affiliate a unique coupon code that provides a discount on first purchase, you can track sales from that affiliate using that code.
Platform tracking software
An affiliate platform automatically attributes sales to the relevant affiliate, and many come with a variety of useful tools and features for managing your program.
Three popular tracking tools are:
- Post Affiliate Pro – A user friendly tool that comes with multiple tracking options, fraud protection, ad tracking, advanced reporting, and commission payments. You also get access to banners, discount coupons, and smart links.
- Cake – A robust affiliate tool that comes with a full suite of features, including link tracking, fraud prevention, mobile measurement, product-based tracking, and conversion capping.
- Everflow – An easy-to-use platform that comes with clickless tracking, automatic fraud prevention, drill-down reporting, and instant Shopify integration.
Platform tracking tools typically charge a monthly or annual fee.
An affiliate network tool
An affiliate network tool is a more comprehensive option for running your affiliate program, and usually includes their own affiliate network. These are all-in-one tools for finding, managing, and tracking your affiliates.
- An affiliate database where you can access affiliate networks or advertise your scheme
- Tracking tools for tracking conversions, leads, or clicks
- Payment handling of all relevant commissions and tax
- Reporting functionality
Being an all-in-one tool, affiliate network tools cost the most, and usually involve a setup fee, monthly fees, and ongoing transaction fees.
2. Decide on payout
You must also decide when and how much you will pay your affiliates. Typically, a commission is paid when a customer makes a purchase via your affiliate’s URL.
However, there are many gray areas you must decide on, such as:
- When a referral becomes a hot lead but hasn’t yet made a purchase
- When a referral leaves your website but later returns to make a purchase
- When a referral makes multiple purchases in the future
- When a referral uses a coupon or discount code at the checkout
And then you need to agree on how much to pay your affiliates. The average affiliate commission rate falls somewhere between 5% to 30%, depending on factors such as:
- The industry
- The niche of the product they’re promoting
- The product price and profit margin
- The experience and audience reach of the affiliate
Ultimately, it’s about striking a balance between your affiliate’s time investment and your ROI. You may have different commission rates and structures for different products, affiliate groups, and seasons.
3. Define your terms
The terms of your affiliate program define what you and your affiliate should and shouldn’t do throughout the course of your relationship.
This includes the legalities and payment terms mentioned above, as well as information on:
- Channels – What channels can be used to promote your business
- Regularity – How often affiliates can or should share their link
- Content – Whether the affiliate has free reign over content, if you’ll provide appropriate copy, or if their content will be subject to your review
- Images – Whether the affiliate can use their own images or must use branded images
- Disclosure – How and when the affiliate should disclose their relationship with your brand
4. Test your tracking
Finally, it’s important that your link tracking methods work. Test all of your links and software before going live – it will save you a huge headache later on.
2) Find affiliates
Once you’ve nailed the logistics of your affiliate program, it’s time to get affiliates into it. There are a few places you can begin to look for affiliate partners to recruit.
1. Professional affiliates
Professional affiliates are people who conduct affiliate marketing for a living. This might be because they’re an active influencer on social media, an expert on Google Ads, or a well-established marketer.
The benefit of using a professional affiliate is that they’ll know how to reach and convert your target audience. The negative of using a professional affiliate is that this expertise usually comes at a cost and they may not be relevant to your industry.
2. Industry voices
Prominent voices and influencers in your industry are great potential affiliates who understand your business and product, and likely already have access to the audience you want to target.
Ideally, they’ll already blog about relevant products, enjoy a related hobby, have a large social media following, teach a course, run a masterclass or community, or host a regular podcast.
The benefit of using relevant industry voices is that they’re usually a better fit for your business, which means it’ll be easier for them to generate your company leads. However, unless these industry voices are already experienced with other affiliate programs, you may need to coach them through the process.
Affiliates don’t always have to be people. Businesses that complement your brand can also become affiliates for your store (make sure to specify whether or not this is acceptable in your affiliate terms and conditions).
For example, if you run a horse riding equipment store, you can partner with a local horse riding center.
The advantage of using other businesses as affiliates is that you get access to a highly relevant audience. However, some people can be skeptical about inter-business recommendations.
4. Existing customers
Finally, you should look at your existing customers. These are people who already know and love your products, and have something great to say about you.
While these people might not have the most marketing experience or the biggest following, their real-life honestly about your brand is invaluable. And if it doesn’t prove successful, the beauty of affiliate marketing is that you only pay for results.
Once you’ve found potential affiliates, conduct a vetting process that examines their suitability for your brand. This includes looking at their work, speaking with their other clients (if relevant), examining their audience base, and evaluating whether their persona complements your brand image.
How to gain more affiliates
While marketing a marketing program may feel a little strange, it is necessary for expanding your affiliate base, gaining more partners, and growing your eCommerce business. You can do this through social media, your existing customers, or affiliate marketer networks.
1) Social media
Social media is a great place to find bloggers, influencers, high-follower accounts, and your everyday shopper who can join your affiliate program.
You can do this by contacting people directly, sending out a call for affiliates, or sending free gifts.
Remember, your affiliates don’t have to be high-traffic influencers or run their own blog or podcast. If you sell weight training programs, an affiliate who’s an average person documenting real-life progress can share links along the way. It’s about finding people your audience trusts enough to follow their advice.
Note: Don’t forget to read and follow each social media platform’s guidelines on contacting affiliates and using affiliate marketing.
Your existing customer base is a great place for finding affiliates who already love your brand and products. Here are a few ways you can invite customers to join your affiliate program.
- Run an email campaign announcing your affiliate program (and highlighting the rewards)
- Putt a banner on your website that shares your program details
- Add an affiliate invite to the post-checkout page, or use package inserts (remember, don’t split the CTA! Your affiliate invite should be after they make a purchase, not during)
- Add an affiliate sign-up link to all company email signatures
- Train your sales, customer service, and engagement teams to spot potential affiliates and invite them to the program directly
3) Affiliate networks
Finally, there are many affiliate networks for finding and connecting with people relevant to your business.
- Specialized online directories to market your program or search for affiliates
- Internal directories included with your affiliate platform or software
- Affiliate marketing conferences for connecting with people face-to-face
There’s a lot to take into account when setting up an affiliate program for your eCommerce store. But, if you take the time to understand the process, perfect your logistics, and find the right ambassadors, the results can be phenomenal.