How do people discover new goods and services? Most frequently this happens through word of mouth and online recommendations. Considering this tendency, it should come as no surprise that affiliate marketing is now driving amazing results for businesses of all sizes and shapes.
Per Business Insider report, affiliates generate as much as 16% of online e-commerce orders in the US. That’s around the same figure as email marketing, and slightly less than organic (21%) and paid (20%) searchers.
So if you are wondering how to start affiliate marketing as an SME, below is your quick guide explaining the essential nuts and bolts.
What is Affiliate Marketing?
To define this term as simply as possible, affiliate marketing is a practice of engaging 3rd parties to promote your goods and services for a certain commission. This is a bit simplistic, because there is a lot to setting up and managing such a program, and there are actually two facets of affiliate marketing.
- As a small business, you can seek out related products and services to promote on your site and earn affiliate commissions, in order to supplement your own sales income or as a separate side hustle.
- You can also seek out related businesses/publishers to help you promote and sell your products, and increase your income through their sales.
Probably the best and most effective example of affiliate marketing programs is that of Amazon. It is called the Amazon Associates, is free to join, and can be remarkably successful. All of us have shopped on Amazon and ended up purchasing products that are offered by affiliates, rather than Amazon itself. With proper advertising and adding a few perks, such as free shipping or a bit lower pricing, affiliates can do a great business through Amazon affiliate marketing.
However, this guide will focus more on the main facets of creating a successful affiliate marketing program of your own, as well as the benefits you can gain, if such a program is done well.
Benefits of Affiliate Marketing Programs
Affiliate programs have become quite popular in recent years, and for good reason. For one thing, they allow small businesses to spread their reach without direct marketing and at a pretty reasonable cost. While initially utilized by large companies, there are a number of benefits for small businesses too.
- Affiliate programs are low-risk and low-cost. If you have a small budget, any sale by an affiliate is one you did not have to market to get, and, even after the commission is paid, you still have profit from a sale.
- Affiliate programs can also help to spread your brand. If customers link to your website and make a purchase, based on recommendation or promotion by an affiliate, you have the opportunity to retain that customer for future purchases.
- You can still maintain certain control over price and marketing. You can supply marketing materials to your affiliates, so that you control the message. As well, you will also determine the commission price, so that you ensure that you are still making a profit.
- Affiliate marketing is a source of somewhat passive income. While you must do the initial work of setup, once things are going well, the sales come in without a lot of direct work on your part.
A Few Affiliate Marketing Statistics That May Motivate You
Recently, Rakuten Marketing commissioned a study by Forrester Consulting on the effectiveness of affiliate marketing programs. Almost 90% of respondents stated that affiliate programs were important to their overall marketing strategies, and the majority of marketers said that affiliate marketing produced up to 20% of their annual sales income. This is a huge finding.
What’s more, the same study predicted that the growth rate of affiliate will continue to be at least 10% a year and become a $6.8 billion industry by 2020.
Clearly affiliate marketing is here to stay, and you should be taking advantage of it. Your competitors probably are.
So, just how to get started?
Find Your Niche Partners
Your business is in a specific niche. If you are selling gardening equipment and supplies, for example, your affiliate partners cannot be businesses selling interior design products or car parts. They have to be related in some way – landscapers, nurseries, deck, patio, and pool companies, etc. Why? Because you need affiliates with the same audiences that you target. You have a wealth of possibilities, so consider the following:
Business Colleagues that are in related niches are a great place to begin. Consider signing on with other small business owners to create a reciprocal arrangement.
Search for related businesses/publishers online and on social media. Spend some time developing relationships with them before you move into any type of proposal. This relationship-building takes some time, so be patient. If you come on too strong too soon, you will “run them off.”
Consider using your loyal customers. Set up a program of referrals with them. If they refer customers to you, and you make a sale, provide a monetary commission. You’d be surprised how many may actually take you up on this!
Attend workshops and conferences. You may be surprised how many entrepreneurs you will be able to network with.
Use affiliate networks. This is perhaps one of the best and fastest ways to get affiliates. There are a large number of popular affiliate network websites that will list your products or services. Those involved in affiliate marketing will comb through these sites looking for products to promote.
Currently, the most popular ones are Clickbank, Shareasale, JVzoo, Hotmart, Clickbooth, Ads 4 Dough, Commission Junction, Amazon Affiliate Program (already discussed), and eBay Partners Program. If you offer a decent program and provide good marketing materials, you will get lots of “takers.”
Make Your Affiliate Program Attractive
It’s one thing to find great potential affiliates. It is quite another to get them to see you as a lucrative possibility for affiliate marketing. You have a lot of competition out there, so you have to make your offer more attractive than others in your niche.
- Do some research. Check out what your competition is offering on those affiliate networks, and see if you can beat them and still realize a profit for yourself.
- Design and develop some great marketing materials that you can provide to potential affiliates. This really eases the amount of work they have to do to promote your products/services, and they are much more willing to act as affiliates if they have as little work as possible.
- Make the process for linking to you and getting their commissions as streamlined as possible. Most affiliates do not want to have to go through an arduous process of getting signed up and paid for any sales they make. Have a single simple link that is unique to each affiliate. Also be certain that their referrals and sales are well documented and that the commission payout is rapid and streamlined. While you won’t need to put most of them on a classic payroll, figure out how you will tackle invoicing and payments to those. If you keep your affiliates happy, they are more inclined to spend more time promoting you.
Consider Becoming an Affiliate Yourself Too
You have a website, a blog, and at least a couple of social media accounts. Sure, your main focus will always rest on your own products and services. But becoming affiliate marketer yourself isn’t that bad of an idea. This way you can create an additional source of income while you build your own brand and scale your own business.
If you can find reputable related businesses that will provide you with great marketing materials and a solid commission plan, you should go for it. The key will be to only go for those that are reputable, because you can damage your own reputation if you promote products or services from sketchy companies. And check out the contract terms very carefully. If you do your homework on any that you are considering, you should be fine.
Always Be on The Lookout for New Affiliate Partners
Affiliate marketing is not a one-time effort. You may get some great affiliates in your initial round of searching and acquisition. But new affiliates are coming on board all the time, and your competition is always busy looking for them. You have to stay on top of this activity and regularly explore new possibilities. The more affiliates you can secure, the greater the possibility for increasing your profits over the long-term.
Account for Some Challenges
If you think that affiliate marketing is an easy process, think again. These four strategies will certainly provide a strategic plan for you to establish and grow a program that will result in more visibility for your brand and additional income.
But be aware that there are challenges you must face, if you intend to turn your hard work into success.
You must find quality affiliates. And this is a two-way street. A lot of affiliate marketers have been burned in the past, so you must do all that you can to demonstrate that you are a reputable business and that you deliver what you promise. Affiliates will often require references and data from current affiliates, and it will be your job to provide it.
Find the right technology. Your affiliates must be comfortable knowing that you are using the latest technology that will track their referrals and the sales that they will be getting credit for. And the system must be easy for them to use.
Invest the necessary time. Affiliate marketing is ongoing. You have to keep your affiliates happy, resolving any issues they have, and also continually looking for new ones.
Always be transparent. One of the most important elements of a successful affiliate marketing program is to always b clear about what your affiliates stand to gain from an affiliation with you. State what you will deliver and then deliver exactly what you have promised.
To sum up, starting an affiliate marketing program may seem like a big undertaking at first. Indeed, there are a lot of facets to figure out, but the payoff can be massive too. The best way is to start small and onboard a few reputable affiliates at first. ‘Test the grounds’ with them, collect their feedback and afterwards move on with improving the terms of your program.
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