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How to Design an Affiliate Marketing System to Boost Your eCommerce Sales

Ecommerce May 3rd, 2018

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Affiliate marketing and ecommerce

According to eMarketer, worldwide eCommerce retail sales were $2,304 trillion in 2017, an increase of 24.8% over 2016, with mobile sales accounting for 59.8%. While this is great news for online retailers, it has also resulted in fierce competition and reduced profit margins.

That’s why eCommerce businesses need to find innovative ways to expand their reach and find new markets in order to stay competitive online.
One of the easiest ways for boosting eCommerce sales is through affiliate marketing. This involves partnering with another eCommerce store selling complementary products and asking if they can promote your products to their online community. For every sale made, your affiliate partner will be given a percentage of the revenue generated. The beauty of an affiliate marketing model is that it can by new businesses and for those well-established.

Affiliate marketing is one of the simplest ways to generate a high ROI. That’s why we’d like to show how to design an affiliate marketing system which will help you expand the reach of your products and achieve your sales targets. Here are the main steps in setting up a profitable eCommerce affiliate marketing system:

Step#1: Strategy

To get started with an affiliate marketing system, you have two options.

The first option is to create your own eCommerce affiliate program using a tracking system. There are several free and paid tracking apps you can choose from.

screenshot or serp result

Paid Apps from Shopify, are a great way to get started. Many of these offer a free trial period, which gives you the opportunity to try out a few tracking apps to see which best suits your affiliate marketing system.

The second option is to sign up with an affiliate network. Essentially they’re marketplaces which allow eCommerce businesses to find affiliates who are willing to promote their products. The advantage of using these networks is that they already have people searching for products to promote.

Even if four or five active people sign up to your affiliate marketing program, you could generate a steady stream of sales and boost your profit margin.

Some of these affiliate networks charge a monthly fee or take a cut of profits, which often discourages new entrants to the market. Popular affiliate networks you can consider are Rakuten LinkShare, Bigcommerce, and Tapgerine.

Step#2: Setting the Commission Structure for Your eCommerce Affiliate Program

One of the most debated aspects of setting up an affiliate marketing system is deciding on the affiliate commissions to be offered. The compensation structure put in place can often be the difference between the success or failure of an affiliate marketing program.

It takes considerable time, money and effort on the part of affiliates to promote products. So unless they are offered a generous commission, affiliates are unlikely to promote your products.

What most eCommerce business owners fail to realize is that affiliates don’t just help them sell more products, but bring new customers who you can sell to over and over again. Given the fact that it is easier to sell to an existing customer, it can be worthwhile offering 50 to 60% commissions on the front end. You will ultimately make up the cost over the lifetime value of the customer, through repeat sales.

affiliate-marketing-commission-structure

Of course, it goes without saying that you need to ensure all costs have been factored into your pricing so you still make a profit even after paying your affiliates and take into account any fees charged by affiliate networks and other related charges.

Step#3: Building Your Affiliate Partnerships

The next step is to find your affiliate partners. Many businesses make the mistake of thinking this is a numbers game, and the more affiliates they have on their side, the better will be for them. In reality, affiliate marketing follows Pareto’s Principle, and you will find that 20% of your affiliate partners will bring in 80% of the sales. These are your stars, and you need to treat them with the respect they deserve.
One of the best ways to find affiliate partners is to start with a list of other businesses selling complementary products online and contact them directly. Look for businesses that have a modern website and testimonials from happy customers. This will give you an indication of how successful they will be in selling your products.

For example, if you have opened an online store selling pet care products, you could approach an eCommerce store selling dog food. Or you could set up an affiliate arrangement with vets all around your city.

If you sell beachwear, you could set up an affiliate partnership with a company selling surfboards.

You can start the conversation by sending them a simple email as follows:

Dear (Name),
I was browsing the internet and came upon your store. I run an eCommerce business [name of business] selling [what you sell]. Since we are targeting similar markets and have complementary products. I feel there’s excellent potential for a profitable affiliate partnership.
If you are interested in learning how we can get started and the generous commissions we offer, I would like to invite you for a no-obligation exploratory meeting at your earliest convenience.
If you are interested in exploring this opportunity, I am happy to send you some product samples.

Thank you,
(Your name)”

If on the other hand, you choose the option of signing up with an affiliate network, their tracking systems make it easy for affiliates to sign up to your program without you having to contact them individually.

The tracking systems are quite sophisticated and enable both you and the affiliates to accurately track the number of sales being made and the affiliate commissions that need to be paid.

Step#4: Creating Affiliate Marketing Resources

Once you have affiliates on board, you need to provide them with marketing resources which will make it easier to promote your products. Without these, your affiliates will struggle to sustain an initial spurt in sales. This will make it difficult for you to achieve significant growth in your affiliate program.

Here are some resources which will be required for a sustainable affiliate marketing program:

  • Marketing Material: Email Templates, Banners, Facebook Ads, Articles and anything else which assists with sales
  • Product Images and Descriptions: Approved product descriptions for use on websites or other channels
  • Training: Ideally, this can be in the form of training videos which will help affiliates boost their marketing skills so they are successful in selling your products
  • Affiliate Membership Portal: Affiliates should be provided with a unique portal to log in and check their sales and commissions on a daily basis

eCommerce affiliate marketing is an excellent opportunity to foster strong customer relationships and expand your reach beyond what you can ever hope to accomplish on your own. Once you’re started and begin to see initial success, you’ll see why this is such a lucrative channel to grow your sales while building a community of loyal customers and partners.

Want to learn how to generate more leads for e-commerce business? Call TechWyse Internet Marketing today at 866.288.6046 or contact us here.

Post By Nik Tordil (1 Posts)

Results oriented Search Engine Optimisation (SEO) and Online Marketing Strategist with over 10 years of professional experience. Had helped numerous businesses across Australia in terms of leveraging their SEO / Internet Marketing campaigns and guiding them to success using effective and white hat methodologies.

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Results oriented Search Engine Optimisation (SEO) and Online Marketing Strategist with over 10 years of professional experience. Had helped numerous businesses across Australia in terms of leveraging their SEO / Internet Marketing campaigns and guiding them to success using effective and white hat methodologies.

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How to Design an Affiliate Marketing System to Boost Your eCommerce Sales

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