Are you wondering how to start an affiliate program to increase sales in your e-commerce store?
You may have heard that affiliate marketing is a great way to get more traffic to your e-commerce site, but it’s not as easy as just recruiting affiliates and having them put up banners for your products on their website.
There’s so much more that goes into affiliate marketing and, having been on both sides of it as a merchant AND as an affiliate, as well as an affiliate manager for a few brands, I wanted to create this guide to share with you everything you need to how about how to start an affiliate program for your e-commerce store, whether you use Shopify, BigCommerce, WooCommerce or any other e-commerce platform.
According to the BigCommerce blog,
- 81% of brands use affiliate marketing programs.
- 38% of marketers call affiliate marketing one of the top customer acquisition methods.
- In 2015 Amazon’s revenue surpassed $100B and affiliate marketing accounts for $10B of its sales.
What is affiliate marketing?
Affiliate marketing is a type of performance-based marketing in which you reward your affiliates for each customer brought by the affiliate’s own marketing efforts. In other words, you pay a commission each time someone uses a special affiliate link to refer a sale to your website (this is tracked via cookies and pixels automatically).
How to start an affiliate program – six easy steps
1. Choose your affiliate platform
Before you decide on an affiliate platform to manage your program, ask yourself a few questions:
- What is your budget for affiliate marketing?
- Do you want to pay monthly fees or a one-time fee?
- Do you prefer to do most of the affiliate recruitment, payment, and management yourself or do you prefer an all-in-one solution?
- Do you prefer to have a stand-alone affiliate marketing program or to have your program be part of a larger affiliate network?
The affiliate platform that you will ultimately end up choosing will depend on the answers to the questions above, especially your budget:
- smaller budget (less than $100 per month), you'll probably want to choose an affiliate plugin such as AffiliateWP (for WordPress-based eCommerce sites) or an affiliate platform such as Post Affiliate Pro, Ambassador or LeadDyno. These have a lower cost to entry and they charge either a low annual or monthly fee. Both of these will seamlessly integrate into your website.
- medium budget ($100 – $250 per month), my absolute favorite affiliate platform is ShareASale. They are extremely affordable compared to some of the other major affiliate platforms and it's super easy to get started. The best thing about Shareasale is that they already have a huge database of potential affiliates for you, so you will bring more affiliates on board sooner. They also manage all your affiliate payments, so you don’t have to deal with sending checks every month.
- large budget ($250+ per month), you can join a bigger network like CJ or Rakuten. I don't recommend this unless your business has at least multiple six-figure sales or more.
2. Decide what commission you will offer
The commission you offer your affiliate partners depends on a few things, including your margins, your price structure, the types of products you offer and your budget for affiliate marketing. Most e-commerce brands offer a 10 – 15% commission, but some are as low as 2 – 5%. Keep in mind that the lower your commission, the less incentive your affiliate partners will have to promote your products.
Offering a 20-25% commission will increase your chances of having great affiliate partners, but only do this if you have healthy profit margins.
When I had my affiliate program for my t-shirt brand, I offered a 15% commission on all sales.
In addition to your commission percentage, you should also think about the duration of your affiliate cookies. What this means is that if you have a 10-day cookie, for example, if an affiliate sends a visitor to your website and the visitor purchases within 10 days, the affiliate will get that commission. If they visit the website today and make a purchase 14 days from now, their purchase will not count towards that affiliate's sales.
The standard cookie length for e-commerce brands is 30 days, although many offer 60 or 90-day cookies as well. Once again, the longer your cookie length, the more inventive your affiliates have to promote your products.
Another thing to consider is whether you want to pay per click, per lead or per sale. For e-commerce brands, I recommend paying per sale only.
3. Create an affiliate resource center
It's important to have a dedicated affiliate area on your website that is visible from your site's navigation menu because you want to make it easy for your website visitors to see that you are actively accepting affiliates. You also want to make it super easy for them to sign up for your affiliate program.
This dedicated affiliate area should have the following:
- a signup form
- a few sentences about what type of affiliates are ideal for your business
- a description of your affiliate program (cookie length, commission structure, what platform you use, etc.).
- your affiliate terms and conditions
- a link to your support page so that potential affiliates can contact you with questions.
You want to make it as easy as possible for your affiliate to promote your online store. Provide different banner sizes that they can choose from (click here for all of the standard size web banners that you should have available). Add a few social media sized banners (click here for a cheat sheet of social media image sizes). In addition, offer social media copy (for Facebook, Twitter, Pinterest, and LinkedIn posts), as well as e-newsletter copy.
Here are some examples of great affiliate centers: LilyFair Jewelry, Vibrant Blue Oils, Vivo Barefoot, Maple Organics, (please note that some of these companies reserve their banners and copy for active affiliates only).
4. Recruit affiliates
Getting new affiliates to sign up might be one of the toughest parts of running your affiliate program. If you sign up with a platform like ShareaSale you will naturally attract a lot of the affiliates that are already using the platform. Since they are looking for more products like yours to promote, you will have a lot of your work cut out for you. However, if you use a stand-alone platform, you're basically on your own when it comes to recruiting affiliates.
To grow the number of affiliates for your website, seek out bloggers, YouTubers and other online websites whose audience is similar to your target market and invite them to be an affiliate. Reach out to past customers and invite them to become affiliates and to share your products on their social media and with their friends.
Please note that an affiliate program is slightly different than a refer-a-friend program. An affiliate program usually pays out in cash, while a refer-a-friend program usually pays out in store credit.
Consider partnering with other e-commerce businesses whose customers are similar to yours, but whose products are not competing. For example, a chocolate brand might want to partner with a handmade gifts brand; a children's toy company might want to partner with a children's food company; and a jewelry brand might want to become an affiliate for an apparel company.
5. Activate affiliates
Not everyone who signs up for your affiliate program will start sharing your products with their audience right away. Some might forget to do it, while others might be too busy to start. Consider offering all your new affiliates an incentive to get active and to start spreading the word about your products and website.
An incentive can be a sign-up bonus of $20 or it can be tiered commission (for 1-10 sales they get 5%, for 11-50 sales they get 10%, for 51+ sales they get 15%). Another incentive you can offer is to pay a flat fee for a blog post or a YouTube video within a month, in addition to the commission they will get when someone makes a purchase.
Many affiliates will take you up on your offer and will start promoting your products because of these initial incentives.
6. Motivate affiliates
Once your affiliates become active, you should connect with them on a regular and consistent basis to let them know about any new products or promos you're running. Ask if they need anything else from you and make their interaction with you as easy as possible! I used to send out a monthly newsletter to all my affiliates and every time I did that I would get new affiliate sales!
Most entrepreneurs reading this post will probably not have a budget for a dedicated affiliate manager, but if you can assign someone on your team to oversee your affiliate program, this will ensure that your affiliates have the support they need.
I hope you found these tips on how to start an affiliate program for your online store helpful! Do you have any experience with running an affiliate program to market your products and your eCommerce store? Are you thinking of setting up an affiliate program? Leave a comment below and let me know!