It is essential to understand affiliate marketing programs before you decide to expand your audience for your brand. As a matter of fact, 81% of brands use affiliate marketing programs.
The amount spent on affiliate marketing in the U.S. alone is anticipated to increase to $8.2 billion in 2022 from $5.4 billion in 2017.
Given the above statistics, it is understandable why so many eCommerce brands are thinking about launching their own affiliate programs.
In this blog, we’ll go through what an Affiliate Marketing Program is, how it works, why is beneficial for your brand, and how the payout system work.
In an affiliate program, a company’s products are promoted by affiliates in exchange for a commission.
Affiliate programs essentially establish a relationship between an advertiser and a publisher. An online store owner (the advertiser) has products they want to sell, and an affiliate promotes those products on their own website and makes money from each sale or action.
In layman’s language, an advertiser simply offers a platform for affiliates and merchants to connect and collaborate. After registering for the platform, affiliates and merchants can start collaborating.
It’s a win-win situation for both parties, as the advertiser can use the affiliate’s influence, traffic, and expertise to increase sales for their company and only pay after the sale is made, while the advertiser publisher uses their influence to earn money from the advertiser and boost traffic on their own website.
Affiliate marketing offers tremendous potential to increase your reach and potential website visitors as the internet develops into a more collaborative environment with a variety of websites to work with.
Even though the expansion of the affiliate marketing sector is already a positive sign of success, let’s take a closer look at some of the main advantages you’ll experience if you start your own affiliate program.
The affiliate is your only source for creating marketing content and generating sales, so you don’t need to hire an advertising team or buy advertising space.
Additionally, since affiliate marketing is performance-based, you never pay for “potential sales” or impressions because you only have to pay the affiliate after a sale has been made. This results in low startup costs and a high return on investment.
In unison with your other digital marketing efforts, recruiting affiliates into your program will allow you to scale traffic faster. While your affiliates work to generate revenue on existing products and services, you’ll be able to focus on creating new products, building new revenue streams, and reaching new customers in the meantime.
Working with reliable influencers and high-ranking websites will help you improve your reputation and boost customer confidence.
This is a fantastic opportunity to generate pre-qualified leads and boost SEO because your target audience probably already feels a connection to the influencers and websites they visit.
The partnership life cycle is the core of any successful affiliate program. You need to know how partners are selected, supported, monitored, and paid in order to comprehend how an affiliate program operates.
There are six stages to how an affiliate marketing program works:
The company pays the publisher an affiliate commission each time the publisher advertises a product on their own platform and generates revenue or convinces a customer to take a particular action (like clicking or filling out a form).
While the advertiser has the chance to boost traffic and sales, the affiliate can benefit from a high-paying revenue stream without the hassle of actually making sales.
This can be a lucrative source of income for the affiliate (without the hassle of actually making a sale) and a way for the advertiser to boost traffic and sales, benefiting both parties.
The affiliate’s contribution to the seller’s sales will be calculated differently depending on the program. Here are three distinct affiliate program payout types to consider.
As a result, the affiliate is motivated to send customers from their marketing channel to the retailer’s website. Then, the affiliate is compensated according to the growth in web traffic.
Affiliate marketing can be one of the most cost-effective and scalable ways to make money for your eCommerce website.
You’ll be able to leverage other websites and influencers in your niche to promote your products; grow quickly without investing a lot of money upfront; and generate more sales while being viewed as a trusted brand on reputable third-party sites.
It’s a win-win-win.
Get a free trial of our Affiliate Management software today!