How to use Affiliate Marketing To Benefit Your Ecommerce Business

02/02/2022 | Share:

It is hard for any long-standing ecommerce owner to ignore the power of affiliate marketing, and 81% of online businesses are now using this method in some form. It is becoming more apparent just how effective affiliate marketing is at driving growth for your ecommerce business. But what exactly is it? And, how can you use it for your ecommerce store?

In this post, we will look at what affiliate marketing is, how it can benefit your ecommerce store, and include some great tips to ensure this venture is highly effective for your business.

What is Affiliate Marketing?

Affiliate marketing is a way of advertising your company through a third-party website, with the objective being to generate leads or traffic to your products or services. The third-party sites are termed as affiliates, and you compensate them for promoting your company in authentic ways, such as product reviews or discussions about a product with a link to one you sell.

Amazon has popularized this practice through its affiliate marketing programme. This programme includes bloggers and websites linking to an Amazon product in return for a fee if a product is then purchased via the outbound link. In a sense, affiliate marketing is a paid-for method where advertising a product is outsourced to another website.

Statistics show that around 15% of ecommerce revenue can be attributed to affiliate marketing. So, if you’re not yet using this method, you could be missing out on a lot of custom.

Why Does Affiliate Marketing Work?

As with all marketing methods, affiliate marketing may require some adjustments along the road and will certainly need some research in the beginning. Choosing the right network is paramount to the success of this tactic.

Today, more companies than ever before are using affiliate marketing, so let’s look at why.

Low Cost of Start-Up

To start an affiliate programme, you don’t need an advertising team; this is the role of the affiliate. Your initial effort is to vet and select the right affiliate whose duty it will be to have a high-quality team of researchers, advertisers, writers, and marketers working on showcasing your product or service on your behalf.

You will likely find that once you have established a good working relationship with an affiliate, for the most part, the communication will be infrequent, which is highly convenient when you want to focus on other areas of your ecommerce store.

Low Ongoing Costs

Because most of the marketing activities for your ecommerce products will be done by your affiliate, they will also be the ones to bear the cost of advertising. This is a commission-based programme, which means that you will only pay for the sales brought in by the affiliate.

Since the affiliate is only compensated when their campaign is successful, you can pretty much guarantee they’ll be doing their best to advertise your products.

Many ecommerce owners will find this an easy to manage relationship that doesn’t interrupt cash flow or become overly timely, such as is the case with PPC advertising, where you’d have to pay a company for every click that leads to your site. You’re only paying for actual sales made from their programme with affiliate marketing.

Low Risk

Affiliate marketing is ideal for companies on a tight budget since there is little risk of financial losses; you part with money when money comes in due to a sale made because of this partnership.

Targeted Traffic

You get to choose the affiliate you want to work with, and this way, you can ensure that the traffic you receive is relevant; e.g., these consumers are interested in your products or services.

Flexibility

You’re the boss here, and if you want less or more from your affiliates, you simply have to ask. You could ask for blog posts to be more informative or include more of your products, or you could ask for additional websites to be used. Or, indeed, less.

High ROI

Affiliate marketing has been proven to have a much higher ROI compared to many other marketing strategies. The main reason for this is that your target audience is informed of your products from affiliates who already provide them with information they find valuable enough to influence decisions.

Trackable

Any company that runs an affiliate marketing programme is able to track the links that bring in traffic and see how many convert into sales. It’s a great way to see what is working for your ecommerce website (e.g., which website or blog, what type of content) and what is proving not to be so successful.

How to Get Started with Affiliate Marketing

If you’re eager to get started with affiliate marketing, there are a few fundamental elements to consider that will contribute to greater success. We will cover these briefly here.

Locate an Effective Partner

For many ecommerce owners, branching out to affiliate marketing will mean partnering with a large provider. These may include ShareASale, Impact, Avantlink, Clickbank, Rakuten, or, indeed, Amazon.

See who potential partners are currently working with, and if it isn’t one of the major players like those we have listed, it may be best to move on.

Commission Structure

On average, ecommerce commission tends to be over 5% and under 20%. Talk with various affiliate marketers to see what commission they charge, and don’t be afraid to talk to multiple and receive multiple quotes. Generally, these companies will be happy to discuss rates with you informally with no obligation to go further.

It is OK to use target market analysis too. You can find many discrete audiences and the affiliates who work in each space. You could then pay these affiliates accordingly to their level of expertise and success with your programme.

Influencers

It can be hugely effective to look for affiliates who have authentic traction with the audience you’re targeting. Although there are several ways to do this, the most straightforward is the most valuable: look for bloggers who write about the industry you’re in and see if they’ll be interested in a mutually profitable arrangement.

If you’re not sure where to start, search engines are a great place to begin. Just a few keywords you’re targeting should bring up bloggers with the highest-ranked content.

Focus on More Profitable Products

It doesn’t make sense to utilize budgets on small sales, so it’s logical to focus on the more expensive products, which could lead to smaller purchases in the future. This tactic will also simplify your affiliate programme since you will be making larger but fewer payments following successful sales.

The Bottom Line

Affiliate marketing isn’t new. Nor will it regularly appear in the top ecommerce trends, but this is certain to change as ecommerce continues to grow. By taking your time and looking for the right affiliate to work with, you should start to see the significant value this can bring to your ecommerce store.