Learning how to start an affiliate program is relatively easy with the right preparation. You’ll need to create an attractive commission rate, recruit affiliates, and provide marketing materials to make it easy for affiliates to promote your products. If you’re successful, you could potentially see revenue increase by 30% just by starting an affiliate program.
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1. Analyze Your Competition
Your competition provides one of the best opportunities to see what affiliate marketing efforts work for your particular niche or industry. Research what competitors pay for commissions, their objectives, and any major partnerships. If you’re paying an 11% commission when the standard is 25% for your industry, you’re not likely to find affiliates.
Here are things to look for in competitors:
- Commission rate: Gather a range of commission rates for your competition’s various products. You’re likely going to find a different commission rate among several competitors.
- Major partnerships: If your competition has partnered with a big brand, celebrity, or influencer—it’s worth researching complementing partnerships for yours, too. For example, if your competition partners with Tony Robbins, look to partner with Marie Forleo.
- Support: Some affiliate programs offer a dedicated team solely for helping affiliates. Other programs have one point person to help. Evaluate what’s working for your competition, provided it’s a company that’s similarly sized to yours.
- Platform: Is your competition running its affiliate program in-house or through a platform such as CJ.com or ShareaSale?
Google the products you sell and pay attention to which companies run ads at the top of the search results page. For example, if you sell custom water bottles, you’ll search for “custom water bottle.” The top search results are ads, and you’ll even see sponsored images with links on the right side of the search engine results page (SERP).
2. Determine the Type of Affiliate Program Needed
When starting an affiliate program for your company’s products, you should also decide where to house the program—either creating an in-house operation or using an affiliate network. You can also create affiliate links on specific platforms. The methods you use depend on your budget, the size of your affiliate program, and the people resources available.
If you have a large, dedicated team able to handle an affiliate program, you might consider hosting your program in-house. This option is best suited for larger teams because you’ll need to coordinate a lot of operations such as promotions, sales reports, commission payouts, swipe copy, affiliate links, and affiliate applications. An example of a company that does this well is Target.
With its ability to keep all affiliate activity in a single platform, an affiliate network is an attractive option for companies that don’t necessarily have a team to monitor every detail of an affiliate program, or companies preferring simplicity. A network brings many companies, known as merchants, together with affiliate marketers.
All sales reporting, payouts, tracking technology, and affiliate applications are handled right from an affiliate network dashboard. Examples of networks include ShareASale, Rakuten, and CJ.com. You’ll pay a premium for convenience—giving 30% of a sale to the network is pretty standard.
If you have products that you sell on a platform such as Shopify or Thinkific, you can create affiliate links easily. For Shopify, you’ll need to use an app such as Refersion or LeadDyno. If using Thinkific, you’ll just need to set up a user as an affiliate and assign a percentage they’ll earn. From there, you can share a unique affiliate link to your new affiliate. Using a platform-specific program is simple, and an example of a company doing this is BarkBox.
3. Calculate and Set Your Commission Rate
When deciding on a commission rate, you must plan for profit above all else. After all, it doesn’t make sense to pay out an 80% commission rate on a physical product if it’s costing you more than that to produce. For that reason, an intangible product, such as a service or course, typically has room to provide higher commission rates than a physical product.
While it’s important to research your competition’s commission rates, you have to look at your own company’s marketing spend as a whole to come up with a commission rate. There’s no magic formula to calculate your commission rate.
When calculating commissions, consider your customer lifetime value (CLV), which is a figure that determines how much you can expect to earn off a customer. You’ll also look at customer retention rates (CRR), which tell you how long customers stay with your company.
Some affiliate programs pay for every impression such as each time an ad is shown to an affiliate’s audience. Others pay for leads or clicks, whether or not a sale happens. For small businesses, these affiliate campaigns can cost a lot of money without any guarantee of a sale. Instead, these campaigns work in favor of affiliates because they get paid even if a sale doesn’t occur.
4. Recruit Affiliates
Some affiliate programs only select significant applicants such as those with a minimum number of page views or followers. For example, to be an affiliate for Airbnb you need to have a minimum of 1 million page views, plus an audience likely to book accommodations. This strategy might not work for a relatively unknown brand.
Attributes to look for in an affiliate include:
- Influence: Your affiliates don’t need an enormous following—just an engaged one. An affiliate with 200 followers who buy everything he recommends is more valuable than an affiliate with 100,000 followers who never buy. You can even set up a brand ambassadorship program with influencers.
- Customers: A happy customer is more likely to share your products with everyone they know. Raving fans make for the best affiliates. Incentivizing these customers will usually make them more intentional in their promotion efforts.
- Blog: When an affiliate can create an entire page or blog post about your product or service, they’re more likely to get a higher volume of sales. This is because affiliates can tie your product to their audience.
- Email list: Sending a push notification in the form of an email is a great way for affiliates to get your product in front of their audience. Provided an affiliate uses links properly without spamming, email is a great way to promote products. Keep in mind, some affiliate programs, such as Amazon Associates, prohibit the use of affiliate links in emails.
To find affiliates, pay attention to social media users who talk about similar products in your niche. Companies have found success recruiting affiliates by sending either a direct message through the social media app or an email, provided the user’s bio lists a contact email.
5. Provide Swipe Copy to Affiliates
Swipe copy is written material that makes it easy for an affiliate to promote your products. Hire a copywriter using a service such as Fiverr to create copy, or you can create your own. You’ll want to encourage affiliates to use the copy as a basis for emails, social media, and blog posts.
Inevitably, an affiliate will use the entire swipe copy verbatim, which isn’t inherently bad. However, if you have 20,000 affiliates all sending the exact same email during a product launch, this doesn’t look great for the company nor the affiliate.
Give Several Subject Line Ideas
When providing swipe copy for emails, be sure to give several different subject line ideas. This way, if you do have many affiliates sending the same exact email, at least the subject line is more likely to be different if it goes to the same email recipient.
Highlight Sections That Need Customization
The copy you provide should have a highlighted section for the affiliate to insert their own affiliate link. Additionally, you should highlight a section of the copy where it makes sense for an affiliate to provide their own story as it relates to the rest of the copy.
Have a Central Location for Affiliate Documents
You can create swipe copy and house it in Google Docs, or you can even create an entire affiliate portal with copy examples. Once you have affiliates promoting your products, interview top affiliates to see what type of copy works best for their audiences. Some affiliates are even happy to provide group training to other affiliates on best practices and strategies.
Examples of Successful Affiliate Programs
By creating an affiliate program for your company’s products and services, you can potentially see an increase in revenue by 30%. The success of your affiliate efforts will depend on several factors such as your talent, resources, and profit margins. Successful affiliate programs include World Nomads, Ultimate Bundles, and InterContinental Hotels Group.
Easy-to-Follow Tutorials: World Nomads
Providing travel insurance to residents in 130 countries, World Nomads has created its affiliate program with travelers in mind. It provides ready-made travel content to help drive engagement and sales. Affiliates also get easy-to-follow tutorials so they can get started with little-to-no technical ability. Popular affiliates include Lonely Planet, Contiki, and Nomadic Matt.
Simplified List Growth: Ultimate Bundles
Ultimate Bundles packages digital content in niches such as photography, blogging, and productivity. The content within each bundle typically comes from bloggers and course creators and is sold for less than $100. Bloggers then promote each bundle sale to their audiences. The creators whose content goes in the bundles get to grow their lists because every time a sale is made, the buyer has to then use a custom coupon code to access the content from the creator’s site. Popular affiliates include Ruth Sukoup and Jennifer Maker.
Car Payment Incentives: ClickFunnels
ClickFunnels is an online sales funnel builder. Its affiliates earn commission every time they refer a sale of the software, any ClickFunnels courses, and even on books sold by the company. There’s even an incentive for having 100 active ClickFunnels subscribers referred—ClickFunnels will pay for an affiliate’s car payment, in addition to commissions. Popular affiliates include Spencer Mecham and Julie Stoian.
Bottom Line—Starting an Affiliate Program
Once you learn how to start an affiliate program, you can begin to attract affiliates who want to promote your products and services. In turn, they’ll earn a commission, and you’ll see an increase in revenue, provided you have planned for profit. Companies that start affiliate programs see an average of 30% of an increase in revenue.
A really simple way to create an affiliate program is to use what you already have. Shopify is a popular choice for ecommerce sites and has apps that allow you to create affiliate links with just a few clicks of a button. Get started with Shopify’s 14-day trial today.