How affiliate marketing can benefit your business
Affiliate marketing is a cost-effective way to advertise a company’s services through a third party as companies only pay a commission when an affiliate secured a sale. Here is everything you need to know about affiliate marketing.
What is affiliate marketing?
Affiliate marketing is a marketing strategy where a company pays an affiliate commission for sales generated by the affiliate's marketing activities. An affiliate is an individual or business that represents a company and promotes its products or services. By linking to a product or service and then promoting it on their own website or social media, When a company's affiliate secures a customer purchase, the company pays the affiliate. Using a team of affiliates is called network marketing.
What are the benefits of affiliate marketing?
There are many benefits of affiliate marketing for businesses, including the ability to reach a wider audience, the potential to earn additional income, and the ability to build credibility and trust.
Affiliate marketing can be an excellent way to reach a new, wider audience for your business. By partnering with other businesses in your industry, you can tap into their customer base and reach a larger audience.
In addition to expanding your reach, affiliate marketing can also be a great way to earn additional income for your business. When you refer customers to another business, you can earn a commission on any sales that they make. This can be a great way to boost your bottom line.
What are the risks and challenges of affiliate marketing?
There are a few key risks any business taking on an affiliate program must consider. The first is the potential for conflicts of interest. Affiliates may be tempted to promote a company's products and services at the expense of their own, which can damage the affiliate's reputation and the company's bottom line.
Another key risk is that affiliates may not generate the amount of traffic or sales that was anticipated. This can be due to a lack of understanding or poor execution on the part of the affiliate, or to a competitor's aggressive marketing efforts.
Finally, affiliates may not receive the commissions they are owed if the business fails to meet certain performance thresholds.
Getting started with affiliate marketing
Here is how you can utilize affiliate marketing:
- You should ensure that the products and services you want to advertise through another company or individual would be a logical fit within their industry.
- You can give your affiliate a special link to put on their website that goes directly to yours. This lets you track the traffic they bring to your site.
- An affiliate can also process purchases on a company's behalf and send the company a customer’s purchase details.
- Affiliates are typically paid a commission by companies for each order that a customer has placed. So, if you plan to work with affiliates, you would need to have a system in place to track their sales.
Creating an affiliate program
Creating your first affiliate program can be done in 3 easy steps:
Step 1: Reach out to an affiliate
Here are a few ways you can find and hire affiliates to help promote your business:
Fiverr is a website that can connect you with a freelancer that would advertise and market your business through affiliate strategies. Fiverr also provides reviews for each freelancer so you can pick the best candidate for your business.
Use LinkedIn to list an advertisement that you require affiliates for your business and review each candidate’s CV. You will then also be able to determine the terms and conditions that they would have to follow in order to market your business.
Friends and Family
Your friends and family can help sell your company's services to other potential customers and give you their contact information. If the customer they refer to you makes a purchase, you would then pay them a commission.
Step 2: Determine a commission
Next, you would have to sit down with the affiliate and determine how you would pay them and how to track their performance.
Here are a few factors to keep in mind:
- What commission percentage % you will pay them
- Minimum payment
- What products they are allowed to advertise
- How often you will pay them (daily, weekly, monthly, etc)
The average commission percentage for affiliates is 5-10%
Tips: Use Percentage calculator to calculate percentages.
Step 3: Link them to your orders
Your affiliate would need a link that they can list on their website that users can click on.
Any orders that are placed through their link would be a sale through the affiliate and you would have to pay them a commission.
Make sure to chat with your webmaster to set up a link where orders can be tracked.
Affiliate marketing can boost your whole marketing strategy if you’re using great affiliates.