Affiliate Programs: Step-by-Step Guide For Ecommerce Sites (2022)
Affiliate Programs: Step-by-Step Guide For Ecommerce Sites (2022)

Affiliate Programs: Step-by-Step Guide For Ecommerce Sites (2022)

Getting your products into people ’ mho hands and generating new sales is sturdy as a raw ecommerce commercial enterprise .
apart from organic ecommerce SEO which can take clock time, you ’ ll probably need to invest in pay dealings on Google or Facebook ( and advertise costs continue to rise ) .
You ’ ve credibly heard the term affiliate marketing confuse about, but with all of the unlike digital market tactics out there, it may seem a piece confusing or get lost in the shuffle .
here ’ s the effective newsworthiness.

By starting an affiliate market program for your ecommerce store, you can cursorily and affordably drive more traffic and increase sales from your on-line store. All while not paying a dollar upfront .
sound matter to ?
then you ’ ll want to learn more about affiliate market .
When you look at the stats below, it makes sense why many ecommerce brands are considering starting their own affiliate programs :
That said—what is an affiliate program ? How can you get started ?
beginning, let ’ s specify precisely what this class of performance-based marketing is .

What is an Affiliate Program?

Affiliate commercialize is the procedure of earning money by promoting another web site ’ sulfur products .
It ’ s a bare kinship between two websites : an advertiser and a publisher .
An advertiser ( you as the ecommerce store owner ) has products you want to sell, and a publisher ( affiliate ) promotes these products on their own locate and earns a commission on every sale .
The ecommerce store owner works with other websites who publish message and review products. Ecommerce merchants can leverage a web site ’ randomness influence, traffic, and expertness to generate sales for their business, and alone pay after the sale is complete .
Affiliates can read my how to start a blog guide for more information on how to start a successful affiliate web site this class .
The publisher uses their influence and world wide web traffic to make money from the advertiser .
They can earn a deputation from on direct sales, but can besides earn commissions based on a count of other actions taken on the web site, based on their agreement .

Examples of Affiliate Program Payouts:
  • Direct Sales. Earn a commission from traffic that drives a sale.
  • Leads. Earn commissions on actions like email sign-ups, social media follows, form submissions, content downloads, etc.
  • Clicks. An advertiser looking to generate a large amount of traffic might pay an affiliate on a cost-per-click basis.

What are the Benefits of Affiliate Marketing?

There are many benefits to pursuing consort selling for your ecommerce site .
The internet has become a very collaborative place and the more websites you work with, the wider your compass and electric potential web site visitors .
here are some of the key benefits you ’ ll receive if you get started with consort marketing .

1. Everything is trackable.

You can view data on impressions, clicks, leads, and sales all in dim-witted affiliate dashboards

2. Affiliate marketing has a strong return on investment.

One independent benefit of affiliate market is that it is all performance-based, and you set the rules .

3. Affiliate marketing has the ability to scale.

In unison with your other digital commercialize efforts, recruiting affiliates into your program will allow you to scale traffic faster .

4. It provides third-party validation and social proof.

By partnering with entrust influencers and high agency websites, you can improve your reputation and build consumer assurance .

5. You can focus on selling specific, high-value products.

When creating consort offers, on-line memory owners can have affiliates promote all of their products, or barely a blue-ribbon few. It ’ s a good mind to have affiliates promote your high-value products with firm profit margins. Plus, if you have a humble upset rate on certain products, you can use armory management strategies to promote your excess inventory, improving your sell-through rate .
It isn ’ thymine expensive to get started .
For many reasons listed above, consort commercialize is very cost-efficient .
so nowadays that you understand the basics of what affiliate market is, how do you start your own affiliate program ? How can you leverage this type of performance-based market to drive more clientele to your ecommerce store ?
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Things To Consider When Developing Your Affiliate Program

If you ’ d like to get started with an affiliate program, you ’ ll indigence to consider some key occupation aspects first .
You ’ ll need to research the competitive landscape, know your program ’ second goals and objectives, and calculate some samara metrics to ensure you ’ ra successful .
here are the crown six things you need to know to start your own ecommerce affiliate program :

1. Do competitor research.

Before you jump into the world of affiliates, analyze what your competitors are doing .
Make a number of your competitors and find their affiliate programs on Google .
You can create an Excel spreadsheet to keep track of their affiliate network of choice, committee payouts, incentives or bonuses, cost-per-action, and cost-per-lead .
You can even join their affiliate program to see what kind of emails, incentives, and bonuses they ’ ra offering their affiliates .
For example, if your rival pays 10 % per sale and you see his or her business on outstanding review websites, you can match the commission and target those sites .
many ecommerce sites offer commissions on product sales between 8 and 15 %, then reach sure you take margin into account while besides being competitive, based on your industry .
If you have a circumscribed budget, you can experiment with affiliates in different verticals, find affiliates that your competition does not have a relationship with, or maximize ROI with a few choice affiliate partners .

2. Know your affiliate program objectives and KPIs.

After your competitive research, you need to set your objectives and key performance indicators ( KPIs ) .
This will determine the type of affiliates in your plan and your committee payouts .
Some common objectives could be :

  • To increase site traffic by 15% month-over-month.
  • To increase revenue by $10,000 by the end of the year.
  • To increase the average order value by $10 within two months.
  • To increase the conversion rate by 20% year-over-year.

once you have a set of objectives, think of the metrics to evaluate your advancement towards achieving your goals .
Some common KPIs include :

  • Click traffic – number of clicks your affiliate program received over a given time period.
  • Gross orders – total sales your program reported.
  • Net orders – number of gross orders minus orders that were voided due to complications such as customers returning the product, canceled orders, etc.
  • Commission – the amount you paid to affiliate marketers to promote your business.
  • Top affiliates and their share of total sales – the top affiliate partners that are driving the most revenue for your affiliate program.
  • Performance from each category of affiliate – the type of customers your affiliates are sending to your website. This includes the percentage of sales from coupon and loyalty affiliates, review sites, WordPress blogs, etc.
  • Conversion rate – the percentage of visitors who bought something from your site.
  • Total affiliates – number of affiliate marketers in your program.
  • Percentage of active affiliates – the percentage of affiliates that drive clicks in a given period of time.
  • Percentage of productive affiliates – the percentage of affiliates that drive clicks and sales in a given period of time.
  • ARPU – average revenue per order.
  • EPC – earning per 100 clicks. This is an important metric which reflects the earnings your publishers receive per click to your site. Publishers like to see healthy EPCs to continue working with you.

Pro Tip
If one affiliate spouse drives 50 % of sales for your program, then their deviation could importantly affect your sales .
To avoid this scenario, enroll more affiliate partners to have a goodly distribution of affiliate sales .

3. Have a defined commission strategy

next, number out your monetary value per skill ( CPA ) .
If it costs you $ 100 to acquire a regular customer, then you have to make $ 100 off that customer in arrange to break even, not including your gross margin .
A healthy consort come back on ad spend ( ROAS ) is 3:1. thus if you spend $ 100 on affiliates, you should make $ 300 in gross gross .
many ecommerce websites can run their affiliate programs at a ROAS of 10 or higher, as average commissions of 8-10 % per orderliness yield gross gross 10-12.5x higher than the commissions themselves .
Okay, so nowadays let ’ s discuss the formula for cost per acquisition ( CPA ) .
This is the monetary value of acquiring a newly customer .
basically, you divide your affiliate spend by the come of new customers gained :

( Marketing Spend/Customers = Cost Per Acquisition )

Let ’ s say that in your consort program you spend $ 10,000 and get 20,000 site visitors .
This means you spent about $ 0.50 per visitor .
If 5 % of these visitors fill out an electronic mail popup and convert into leads ( 1,000 leads ), then your cost per precede is $ 10 .
If out of those 20,000 visitors, 1 % convert into paying customers ( 200 customers ), then your cost per acquisition is $ 50 .
Coupling this datum with your average regulate respect ( AOV ), you can create a perpetration strategy in your affiliate program that takes into account price per acquisition, conversion rates, cost of goods sold ( COGS ), and crying margin in order to come up with a share you can afford to spend .
After all that, there are some final examination factors you need to consider when calculating commissions, including customer retention and life value .

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4. Know your customer retention rate.

Your customer memory strategies will play an significant factor in the commissions you can offer .
With a high retentiveness rate, you can afford to spend more in your affiliate program because the customers you gain will come spinal column to purchase more .
In contrast, a low memory rate means that you need to constantly acquire more customers to stay profitable in the long run .
To determine the customer retention rate, determine the postdate :

  • Number of customers at the end of the period – E.
  • Number of new customers acquired during that period – N.
  • Number of customers at the start of the period – S.

once you have those, use the rule below :

CRR = ( ( E-N ) /S ) *100

Let ’ s say you started the quarter with 100 customers (S), you lost 10 customers but gained 50 customers (N), thus when the period was over you had 140 (E) .
Using the formula, count retention : ((140-50)/100)*100 = 90
You have a 90 % memory rate, which is reasonably high gear. full job !

5. Know customer lifetime value.

The adjacent step is to determine your customer life value ( CLV ) .
This determines the profit you gain from your median customer during the time they remain a customer .
affiliate programs CLV
reservoir : LinkedIn
To calculate CLV, you can use the formula below :

( average Value of a Sale ) X ( Number of Repeat Transactions ) X ( average retention Time in Months or Years )

Let ’ s say, you have an ecommerce subscription business and customers spend $ 15 per month for 2 years, then you ’ ve got this formula :
$15 x 12 transactions x 2 years = $180
This helps you realize that one new customer generated from an affiliate sale is actually deserving $ 180 to your business, not that initial $ 5 .
Of naturally, this is a very simplistic overview, but you get the point .
If you want to get a more accurate overview, you can section your customers and forecast the average customer life of each segment .
You ’ ll besides need to factor in bode revenues, estimate the costs of goods sold ( COGS ), arrant margin, and so on .
You can besides use the Compass Revenue Report to calculate your LTV instantaneously .

6. Calculate your commission payouts.

There international relations and security network ’ thymine a particular formula for commissions .
If you generate a fortune of sales from your affiliate marketing course of study and you can pay a 20 % on product sales, then go for it, but keep in thinker the previous factors we ’ ve discussed like customer life value ( CLV ), customer retentiveness pace ( CRR ), return on ad spend ( ROAS ), price of goods sold ( COGS ), objectives and sol on .
Your margins play a large divisor in what you can afford to pay affiliates. For exercise, if you ’ ra working with dropshipping suppliers or dropshipping on Amazon and your margins are 30 %, you should pay your affiliates less than if your margins are 40 %.

There are a fortune of factors to consider, but don ’ thymine beget overwhelmed .
If you ’ re not 100 % sure what your commissions should be, ask others in your battlefield and lean on what your competitors are doing to finalize your strategy .
That said—here are some of the tips you need to consider when determining your payouts :

  • Don’t pay based on clicks or impressions. Affiliates will prefer CPM payments over CPA because it offers the lowest possible risk for them. Don’t fall for this. CPM does not always translate into sales and you might be spending a lot of money without real results.
  • You need to persuade affiliates to choose your program. There are a lot of companies running high paying affiliate programs. That said—It’s your job to attract affiliates to choose your program through rewards, benefits, and competitive commissions.
  • Be generous with your affiliate partners. Don’t think, “How much do I have to pay my affiliates?”, but instead think, “What is the most I can afford to pay my affiliates?” These affiliate websites are your dedicated partners – you should treat them well, foster strong relationships, and pay them competitively. The higher the payouts, the happier your affiliates, and the higher your traffic and sales in the long run.
  • Strong commissions scale your program quickly. To scale your program, base payouts on customer lifetime value with a ROAS of 3 or higher, not on one individual sale. You’ll be paying more initially, but will generate the most possible sales over time.
  • Incentives affiliates with contests and promotions. Make sure to email your affiliate and reward them with higher tier payouts, contests, and bonuses to get them excited to promote you. This works especially well at fostering a good relationship when you’re first onboarding your new partners. You can also use a Gmail extension to track emails that you send affiliates to keep your data in one place. 
  • Set up commissions based on your competitor analysis. Analyzing competitors is crucial because you need to identify the standards for your niche, the number of commissions paid, and their strategies. Understanding your competitors will help you determine how to attract quality affiliates for your program.
  • Start with an affiliate network. If you don’t know where to start, look at affiliate networks. They can take a cut of your sales or require a monthly fee but can provide everything you need to run your program.

Common Affiliate Program Challenges

now that you ’ ve set up your own consort program, there are silent some challenges you should be aware of .
How do you recruit the right affiliates ? Who will manage your program and what software will you use ?
In this section, we ’ ll discuss the most common challenges and how to overcome them .

1. Recruiting the right affiliates.

The Pareto Principle ( or the 80/20 principle ), when applied to the business world, states that 80 % of sales will come from 20 % of your customers .
The same is true of affiliate marketing – 80 % of sales will come from 20 % of your affiliates .
so how do you find the best affiliates that will contribute to those sales numbers ?
A good tip is to recruit based on your business objectives and the affiliate ’ s potential .
You ’ ll want to analyze each web site to view their likely. Just because a new blogger is building a newly affiliate web site and doesn ’ t have a lot traffic so far doesn ’ thyroxine think of they don ’ t have future tax income potential. here are some factors to consider when looking into an affiliate ’ mho potential :

  • Website traffic. The more traffic an affiliate can generate, the more potential sales they can bring you.
  • The number of active campaigns. With an affiliate network, you can track the number of active campaigns an affiliate is running. The more, the better.
  • Consistency with your branding. Does the affiliate website look professional, polished, and in line with a partner you’d like to work with?
  • Affiliate verticals. If you are an ecommerce retailer selling housewares, look for affiliates in the home and lifestyle categories. If you’re selling travel gear, find affiliates that write about travel gear and accessories that have a large following on their blog or Instagram account. Their audiences will best match those interested in your products and you’ll generate higher conversion rates and more sales.
  • View the search landscape. If an affiliate is ranking highly for terms related to your products, they could bring in a lot of web visitors already looking for what you’re selling.
  • Look for review and comparison sites. Affiliate sites that review products in your niche are a perfect target for affiliate recruiting. Comparison shopping engines can also bring in revenue by linking to your product pages.
  • Domain Authority (DA). Domain authority is a search engine metric that predicts how well a website will rank on a scale from 0 to 100, with 100 being the best. Many affiliates focus on link building and writing high-quality guest posts to improve this metric.
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To look into web site traffic, use tools like Similarweb, SEMRush or Ahrefs to see how much organic and paid traffic each web site is generating monthly .
Based on these numbers, can you estimate how many bring page visits your site will receive ?
And finally, based on your locate ’ south conversion rates, can you guess how many sales you will land from this web site ?
Pro Tip
Remember, just because a web site is getting 2 million visits/month, that doesn ’ thymine think of you will get a lot of traffic .
In fact, some sites that generate millions of monthly visitors may alone be able to send you a few hundred clicks .
You need to know which landing pages you ’ ll be on and how long you will be on them .
Make sure to run individual land pages through on-line tools to view page-specific metrics, and ask your partners how a lot traffic they estimate you will receive .
You need to evaluate their performance to understand which ones you ’ ll retain in your program .
With affiliate networks, you can view metrics like clicks, sales, spend, ROAS, and more. You can besides build a Balanced Scorecard to rate them in terms of information, commission request, affiliate type, sales funnel, timbre of traffic, volume, and traffic rescue rush .
affiliate programs balance scorecard
source : Smart Insights
Use these factors to find exchangeable affiliates, or to offer evening better incentives to your best affiliates to keep them around .

2. Find the right affiliate management technology.

How do you manage your affiliate marketing strategy ?
Most businesses use affiliate commercialize software or platforms to manage hundreds of affiliate partners .
The ideal platform should be able to aggregate orders from different vendors, collate different offers for affiliate marketers, set up tracking links and standard ads, and handle the administrative tasks .
There are a lot of affiliate platforms to choose from .
A good topple is to select a chopine based on its quality of serve and on-line reputation .
You can check out our affiliate selling integrations to jumpstart your search and besides find other ecommerce tools to accelerate growth. At BigCommerce was use Impact to manage our consort program .
While some early companies use a combination of different tools. For example, Cloudways uses both Post Affiliate Pro and the Shareasale network ampere well to manage their affiliate plan .

3. Have someone to manage your affiliate program.

Choosing the right affiliate coach is a difficult summons .
A successful affiliate coach needs to balance many unlike disciplines, including digital market, sales, relationship build, abridge negotiation, account management, and web coding/HTML .
feel affiliate managers know how to build modern relationships and maintain relationships with the publishers in their network .
You can have either an in-house affiliate director or an outsource course of study coach .
There are pros and cons to each approach .
An in-house affiliate director is a extremity of your team that will understand your product inside and knocked out .
They are dedicated to the consort program 40 hours/week and will handle the overall strategy, recruit, onboarding, active agent affiliate management, electronic mail newsletters, finance, charge, and more .
Consider the chart below when deciding between hiring in-house and outsource .
affiliate programs in house versus outsources
reservoir : Consorte Marketing

4. Ensure you do not hurt other marketing efforts.

Affiliate market is only one piece of the puzzle .
once potential customers reach your web site, you have to maintain their interest through the be strategies :

  • Focus on creating killer content. Write actionable blog posts and send newsletters to encourage people to return to your website regularly. Also, make your posts engaging with rich media content. You can find new photos with a tool like DepositPhotos and videos with a tool like Adobe Premiere CC. 
  • Spice up your social media profiles. Encourage first-time site visitors to follow you on Facebook, Twitter, Instagram or LinkedIn. 
  • Craft an email list. If someone isn’t quite ready to buy a product on your site, make sure there is an easy way to let them opt-in for an email list. And make sure to offer them an incentive – 10 or 20% off their next order will have them coming back for more.
  • Create AdWords ads and target site visitors across various online channels. Set up retargeting campaigns to site visitors. You can even set up retargeting based on people that visited individual category or product pages and send them custom banner ads. If you need assistance setting up a custom AdWords campaign, one of our Agency Partners can assist you.
  • Conversion rate optimization. Make sure you are providing your affiliates with the highest converting landing pages to send traffic to. The higher the conversion rate, the higher the earnings per click and revenue for your site.

Don ’ thymine forget that while affiliate marketers can introduce people to your business, it ’ s your job to guide them along the sales funnel and encourage duplicate purchases .

Examples of Software to Manage an Ecommerce Affiliate Program

With a wide diverseness of businesses who work directly with affiliates, most businesses opt for software to easily manage and onboard consort marketers to their program .
here are some examples of highly-recommended affiliate software options .
once you ’ ve signed up, LeadDyno sets you up with your own Affiliate Website right away .
You can then receive traffic from affiliates and get your own hosted and customizable page where you can track customers, leads, visitors and AdWords political campaign .
The best separate ?
once you recruit newly affiliates to join your network, they get access to their own unique consort dashboard .
This will contain all of the data they ’ ll indigence to promote your business .
affiliate programs leaddyno
LeadDyno offers a 30-day release test along with setup plans from their team .
Their paid price options start at $ 49 per calendar month for the starter package .
They besides have a Biz Builder ( $ 59 per month ) and Accelerator ( $ 79 per month ) .
The Affiliatly app can help you set up a amply functional affiliate program, where you can manage your affiliate partners .
You can use it to choose how affiliates earn money, pull off affiliate earn percentages, pay affiliates cursorily, view stats, and upload promotional materials ( i.e. banners ) that affiliates can use to market your business, among many other tasks .
affiliate programs affiliatly
They offer plans based on the number of affiliates you have .
These include Starter ( $ 16 per calendar month and up to 50 affiliates ), Advanced ( $ 24 per calendar month and up to 200 affiliates ), Professional ( $ 39 per calendar month and up to 500 affiliates ), pro 1000 ( $ 59 per month and up to 1000 affiliates ), pro 2500 ( $ 79 per calendar month and up to 2500 affiliates ), Pro Unlimited ( $ 129 per calendar month and inexhaustible affiliates ) .
All of their plans have a 30-day release trial .
Refersion is a knock-down consort market chopine that you can launch in minutes .
Whether you want to connect with bloggers, influencers, or other websites, Refersion will help you recruit, traverse, and pay your affiliates in one easy-to-use platform .
They besides have a frame-up lead that will help you get started with zero technical cognition required .
affiliate programs refersion
They offer a barren 14-day trial to test the benefits of their paid plans .
impact is a well known and powerful affiliate selling platform that enables global brands and agencies to work with media partners in a scalable way .
It features a fully-integrated cortege of affiliate track and tag management options, media attribution, e-mail marketing, and potent analytics .
It can besides track cross-channel marketing efforts and data insights to drive gross growth .
affiliate programs impact
They are a more expensive option but offer best-in-class features and confirm for a growing affiliate program .
Affise is an excellent performance market platform that lets you manage, track, and optimize affiliate marketing campaigns in real-time .
They feature a custom-made UI, lots of third-party integrations, and over 50 reports to compare and breakdown data .
Affise Affiliate Platform
They operate in a lot of different verticals, including ecommerce, mobile, bet on, gamble, dating, nutra, crypto, finance, and more .
If you ’ re fix to get started, they have an onboarding team that can walk you through the wholly process .

Executive Summary

Affiliate marketing can be one of the most cost-efficient and scalable ways to make money for your ecommerce web site .
You ’ ll be able to leverage the abilities of early web site and influencers in your recess to promote your products, only paying them once they deliver results .
You ’ ll be able to grow promptly without investing a batch of money upfront .
finally, you will generate more sales while being viewed as a trust store on reputable third-party sites .
It ’ s a win-win-win .
To get started nowadays, learn what your competitors are doing and develop a scheme based on your business goals .
future, get familiar with the numbers behind your commercial enterprise, like customer retention rates and life value, so you earn money out of the gate .
last, reach out to and recruit modern affiliate partners, building real relationships with other web site owners in a mutually beneficial way.

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