eCommerce Affiliate Marketing: The 2021 Ultimate Guide

eCommerce affiliate marketing guide

Whether you’re marketing a new or established eCommerce business, widening your reach and acquiring new customers can be expensive and time consuming.

But what if there was a low-risk solution to grow brand awareness, drive targeted traffic and rapidly scale your business?

Well here’s the news, you can!

By leveraging affiliate marketing, you have the power to take your e-commerce brand to new heights.

Say goodbye to excessive advertising fees; affiliate marketing is purely performance-based.

Affiliates do all the hard work to promote your brand and you only pay a commission on each sale that’s referred to your e-commerce store.

Sounds good, right? Then keep reading.

By the end of this guide, you should have a solid understanding of how affiliate marketing works, the key benefits, and a good idea on what platform is best for your business.

Let’s get started…

What Is An Affiliate Marketing Programme?

In simple terms, affiliate marketing connects an advertiser (in this case the eCommerce business), with a publisher (bloggers, magazines, industry news sites etc.) who is willing to promote their products.

The eCommerce retailer works with the publisher (the affiliate) to promote their products on the publisher’s own site, often through product mentions and reviews. And in return, the affiliate earns commission on each sale they generate.

When you choose to work with content creators and publishers for an affiliate partnership, brands are able to effectively leverage their reach and influence to tap into an already existing audience to increase brand awareness and drive sales.

Depending on the objective of your affiliate programme, you may choose to pay a commission for one of the following actions:

  • Sales – this is the most common method of paying affiliates, and the method that we would recommend for eCommerce businesses. When a user clicks through to your site using an affiliate link, or uses an affiliate code at checkout and places an order, the affiliate earns a commission on the sale.
  • Leads – when the affiliate earns a commission on an action such as a form submission, gated content download, or email sign-up. This method is a better option for non-eCommerce sites that operate by taking leads rather than direct transactions.
  • Clicks – if you are looking to generate a large amount of traffic, you may choose to pay your affiliates on a cost-per-click basis. This method is not one we would recommend for the majority of eCommerce businesses, as a large amount of traffic does not necessarily translate to sales or revenue.

 

What Are the Benefits of Affiliate Marketing?

Increase brand awareness and sales

The most straightforward benefits of affiliate marketing are that it allows you to reach new audiences, increase brand awareness and, in turn, boost sales.

Through affiliate partnerships, you can get your products in front of new potential customers in ways that appeal to them.

Since affiliates earn commission on sales, they will have an incentive to effectively promote your brand.

And because they will want to maintain their followers’ positive sentiment towards them, this is often done in a natural way that doesn’t feel like their readers/viewers are being given a ‘hard sell.’

Working with publishers builds trust and provides social proof

When it comes to purchase decisions, 60% of consumers have been influenced by a social media post or blog review, making influencer partnership a vital part of any eCommerce marketing strategy.

By partnering with trusted influencers and high authority publishers who align well with your brand and promote your products in a way that feels natural, you can effectively build credibility and consumer confidence in your store.

Affiliate programmes also offer a great opportunity to leverage user generated content (UGC) to build brand awareness and credibility.

84% of consumers say they trust peer recommendations over other forms of marketing.

Sharing content made by your affiliate partners, and encouraging and sharing UGC from their followers is a powerful way to engage your audience and build trust in your brand.

You can tap into an already engaged audience

As alluded to in the point above, the reason you are able to gain UGC from your affiliates’ followers is due to the existing engaged audience that they have built up over time.

If you choose publishers that align well with your brand, you are able to reach an already cultivated, targeted audience of individuals who are invested in the content your brand will be promoted in, and who are likely to have an interest in your products.

When compared with the level of effort that is required to build your own following, it is much easier, and much quicker, to tap into a publisher’s pre-existing audience.

So while building your own audience is vital, affiliate marketing is a powerful tool in expanding your reach and attracting new potential customers.

Tap into bloggers' engaged audiences

It’s easy to monitor and report on performance

Because your referrals are all tracked using an affiliate marketing platform, and each affiliate is assigned their own unique referral links, you are able to easily monitor and report on clicks and conversions, and which publishers have been generating the most sales for you.

Affiliate marketing has a strong return on investment

Affiliate marketing is purely performance-based, and you set the rules.

You can decide how much you want to invest, with how many publishers, and you only pay when there has been a sale.

It’s a win-win!

Affiliate programmes are scalable

By recruiting new publishers to your network you are able to increase your reach without the costly upfront investment that may be required by other forms of advertising.

Great brands combined with a powerful network of affiliates = money-making machine!

 

How To Get the Most Out of Your Affiliate Programme

There are a number of steps you can take to strengthen relationships with your affiliate partners, keep them engaged with your brand and maximise the impact of your affiliate programme.

Some ways you can get the most out of your programme are:

Focus on promoting specific, high value products

When developing your affiliate programme, you can be very selective about the products you wish to promote.

The route you take will depend on the objective of your programme and the level of involvement and management your team are able to provide.

However, to get the most out of your brand mentions, ask your affiliates to review and promote specific high margin products to bring attention to these items and improve profitability.

Offer a higher commission on select products

If you do not limit your affiliate partnerships to specific products, but want to encourage publishers to promote your higher value, high margin products, or products that are not selling as well, you may choose to offer a higher commission on these products.

So for example, if you typically pay a 10% commission on a sale, try increasing it to 15% for these priority items (or higher if margins allow) to give your affiliates a good reason to promote them to their audience.

Reward your top referring affiliates

When it comes down to it, bloggers and publishers want to work with brands that pay them well, and reward them for their contribution to their rising sales.

Great affiliates are invaluable to your business.

But even the best affiliates are unlikely to stay loyal to your brand if their hard work isn’t appreciated and appropriately compensated.

Your best affiliates will consistently drive new customers to your site and generate sales, so rewarding them accordingly will help keep them motivated and strengthen their relationship with your brand.

For example, if you have an affiliate who drives high volumes of new customers to your site and generates hundreds of pounds in revenue every month, why should they be paid the same as someone who only generates one or two low value sales?

Offering a higher percentage commission to your top partners, paying a bonus, or sending gifts are some reward systems that you might want to consider adopting.

This isn’t to suggest that all of your affiliates should be paid an unsustainable amount (10% of a sale is a popular amount for a commission – although this can vary depending on the nature of your business and the value of the products you sell).

But you should consider how you can reward your top performing affiliates to make sure that they stay on your side, and that you don’t lose them to a competitor who will pay them more.

Maintain regular contact with your network of affiliates

It might seem obvious – but make sure your affiliate partners don’t forget about you! Be sure to stay in contact with your affiliates through regular branded email campaigns to keep them up to date on news such as:

  • New product releases or collections
  • Upcoming on-site sales or discount codes they can promote
  • Changes to your affiliate programme

You can also use your affiliate email campaign to provide publishers with marketing materials they can use and give them tips for improving their referral and conversion rates.

Running affiliate only contests and promotions can also help to keep them motivated and give them a reason to keep coming back to your site, and shout about it to their followers.

Stay in contact with affiliates through email campaigns

Help your affiliates create great content

Another way to ensure you get the most out of your affiliate programme, if you have the resource to do so, is to work with your affiliates to help them create their promotional content.

Taking the time to help is especially valuable when it comes to new affiliates.

If affiliates have only recently joined your programme and are writing about your brand for the first time, advising them on your key messaging, product benefits, and how to appropriately use your branding can be crucial.

If you have an agreement with a publisher to advertise your brand prominently on their site through visual features such as banners, offer to create these for them.

Alternatively, if you prefer to give more control to the affiliate, offer the opportunity to review and make changes to any visual assets before they are published.

This will ensure that they represent your brand appropriately and showcase the best aspects of your products.

 

The Best Affiliate Platforms

The best way to manage your affiliate programme is by using an affiliate marketing platform.

The platform you use should enable you to connect you with the best publishers for your products and your niche, create and assign individual affiliate links and codes, and offer in-depth data for monitoring and reporting on the success of your campaign.

If you’re new to affiliate marketing and are unsure which platform to choose, we will go over some of the most popular platforms based on their market share (shown in the graph below), as well as the platforms we use for our eCommerce clients.

Affiliate Marketing Platforms With Highest Percentage Market Share

  • CJ Affiliate – offers access to a global network of publishers, real-time analytics for reporting the success of your affiliate campaigns and cookieless tracking.
  • Rakuten Affiliate Network – gives brands access to over 150,000 active publishers, has an easy to use dashboard, and provides quarterly benchmark reports and campaign optimisation support.
  • Impact Radius – their partnership automation offering centres around expanding your affiliate programme, with the platform having a focus on marketing attribution and real-time reporting.
  • ShareASale – this platform focuses on US publishers, so may not be appropriate for UK eCommerce brands not looking to expand into the US. With an easy to use dashboard, this platform focuses on transparent and robust reporting.

The above are just a handful of the platforms available to choose from, and it’s important to note that a higher percentage market share, doesn’t necessarily equate to a better experience.

As mentioned above, it all comes down to which platform works the best for your business and your niche.

 

Which Platform Do We Use?

We predominantly use two affiliate platforms for our eCommerce clients – Tapfiliate and Refersion – with Tapfiliate being our platform of choice. Here are some of the reasons why:

Access to very granular data

Alongside the top level dashboard, Tapfiliate offers in-depth analytics for reporting on the performance of your affiliate campaigns.

While this by no means an exhaustive list, the data you can dive into includes:

  • The number of active affiliates during your specified date range, and how many new affiliates signed up for your programme.
  • Who your top performing affiliates are, including the number of clicks, customers, conversions, revenue and commission amount for each.
  • A breakdown of clicks, customers, conversions, revenue earned and commission paid each date, week and month.
  • A breakdown of pages you have received referrals from, and clicks, customers, conversions, revenue and commission data for each.

Great user experience

The platform offers a very simple and straightforward user interface, making it easy to use and find the information you need, even for beginners.

Tapfiliate is also very easy to integrate with your eCommerce store, using simple copy & paste integrations.

Straightforward affiliate onboarding

Inviting or accepting new affiliates onto your programme is very straightforward through the platform. If you have existing agreements with affiliate publishers, then you can quickly import them to the platform by uploading a CSV, or add a single affiliate by completing a form.

You can also invite new affiliates to the programme by sharing your invite link.

For affiliates who request to join through your signup page, you can quickly see all pending affiliates within the platform, where you can approve or decline them.

Alternatively, you have the option of enabling auto-approvals for all affiliate signups.

You can filter out unwanted affiliate types

A common issue with many affiliate programmes, and one we have experienced in the past, is that many brands receive spam signups to their affiliate programme, or signups from affiliate types they don’t want to work with.

We’ve found Tapfiliate’s filtering functionality very helpful in only showing us the types of publishers our clients want to work with.

Tapfiliate dashboard

 

What To Consider When Planning Your Affiliate Strategy

To ensure the successful rollout of your affiliate marketing strategy, there are a few things you should consider.

What are your competitors doing?

Early on in planning your strategy, be sure to dedicate time to researching your competitors and find out what they’re doing to promote their brands through affiliate marketing.

Some things to look for:

  • Who are they working with? Are their affiliate partners predominantly industry news sites, bloggers, YouTubers, social media influencers or something else? Do they work with publishers with large audiences, or do they focus on micro-influencers?
  • What do they pay? What percentage of a sale do they offer their partners? Do they offer any additional benefits and incentives such as partner exclusive discount codes or free products?

If your competitors have a signup page on their website where they provide details of their affiliate programme, be sure to look at these (you might even want to sign up so you can receive their partner emails to really get the inside information).

Can you offer a higher commission on your sales than your competitors? Or better incentives? If so, you may want to try to recruit some of your competitors’ best affiliates to promote your brand instead.

For brands with limited budgets, you may benefit more from identifying and building relationships with smaller affiliates who your competition haven’t worked with before or experimenting with other verticals.

What are your campaign objectives?

Before you can know which types of publishers you want to work with, and how you want them to advertise your products, you need to define what the purpose of your campaign is.

What is the main objective of your affiliate strategy? What are your secondary objectives? And how what KPIs will you monitor and report on to measure your success?

Define your commission strategy

An important part of your campaign planning is to work out your commission strategy. I.e. How much will you pay your affiliates per sale for your programme to be both attractive and profitable?

Many eCommerce businesses are able to run their affiliate campaigns at a return on ad spend of 10 or higher (typically an ROAS of 3:1 or higher would be considered healthy), as an average commission of 8-10% per order will earn a gross revenue of 10-12 times more than the commission itself.

However, it’s not always quite so straightforward.

To define your commission strategy, you will need to work out your target cost per acquisition (CPA). Put simply, your marketing spend, divided by the number of new customers gained is your CPA.

For example, if you spend £1000, and gain 50 new customers, your CPA will be £20.

To work out what percentage of a sale you can afford to spend, look at your CPA together with your average order value and gross margin to create a sustainable and profitable commission strategy.

You should also take into consideration your typical customer retention rates and average lifetime value when determining the commissions you offer.

If you have a strong return rate and high value orders (with high margins), you may be able to offer a higher commission than your competitors.

Whilst if you have typically low value orders or low retention rates, you may want to start off with a more conservative basic commission.

How will you pay your affiliates?

As well as calculating how much you can afford to pay, you need to determine on what basis you will be paying your affiliates.

We would recommend that eCommerce businesses pay affiliates on a CPA basis, rather than CPM, as affiliates may drive lots of traffic to your site, however traffic does not necessarily equate to sales and revenue.

So to ensure the profitability of your affiliate campaign, be sure to agree payments on an acquisition/sales basis.

How will you recruit new affiliates?

Another important factor to consider when planning your strategy is how you will recruit new affiliates to your network.

The approach you take may vary depending on what the core objective of your campaign is, and the level of involvement your team is able to have.

All online retailers running an affiliate programme can benefit from offering a signup form on their website where publishers and influencers can request to join the network.

If you operate a site that gains high volumes of lower value orders and you are offering a lower commission, you may decide to use a signup form as your main, or your only, form of affiliate recruitment.

And if your aim is to attract large volumes of affiliates, then you may also choose to automatically accept all signups, rather than manually approving them.

However, if you are aiming to foster ongoing relationships with a select number of higher authority publishers, you will need to consider how you will research and reach out to potential new partners, and how to know if you are choosing the right ones.

Some things to consider when deciding whether or not to partner with a publisher are:

  • Do they align well with your brand? Do they discuss topics relevant to the products you sell? Do you have similar values?
  • Who are their audience? What are the demographics of their following? Are they the same as your target audience?
  • How big is their audience, and how much influence do they have? How many people will see the content you’re mentioned in, and how engaged is that audience? Do they trust the publisher’s opinions and recommendations?

Who will be responsible for managing the affiliate programme?

This is especially important if you plan to work closely with high authority publishers and develop a lasting working relationship with them.

You will need to know who will be responsible for recruiting and maintaining contact with your affiliate partners, monitoring and reporting on campaign performance, and optimising your campaign moving forwards.

Will this be managed by your in-house team, or will you require assistance from a specialist eCommerce affiliate agency to make sure that your programme is being run effectively?

Do you need to create guidelines for publishers?

To make sure that your affiliates don’t promote your brand in a way that you don’t want them to, whether that’s due to regulations relevant to your products, or simply maintaining brand integrity, you may need to create and provide them with guidelines.

As a rule, you should allow publishers as much creative freedom as you can (their content needs to sound like it’s theirs – both so that their audience trust it, and so that they want to create it).

However, consider whether you need to provide information on how to use your branding for visual assets, your mission statement, voice and tone, or any key messaging that they should be aware of.

Don’t neglect your other marketing efforts

When planning your affiliate campaign, it’s crucial that you don’t forget that affiliate marketing is just one element of a larger strategy, so be careful not to neglect your other marketing channels, on-site content and conversion rate optimisation.

Your affiliate network is effective for introducing new people to your brand, however once they have been referred to your site, it’s up to you to convert them into paying customers.

So make sure that the content they find on your website is of a high quality, and that you give them a great on-site experience to maximise your chances of securing a sale.

 

Summary

When done right, affiliate marketing can be one of the most powerful tools in your eCommerce marketing arsenal.

It’s cost-effective and scalable, and enables you to leverage the influence of key publishers in your niche, to get your products in front of their audiences, and pay only when they have earned you a sale.

To get started, establish an affiliate strategy based on your business goals, and key figures such as customer retention rates, order and lifetime values, and then identify the publishers and influencers you want to work with to start establishing those relationships.

By connecting with the right affiliates for your business, you can begin a mutually beneficial marketing strategy that will increase your brand awareness and boost sales.

Share on facebook
Share on facebook
Share on twitter
Share on twitter
Share on linkedin
Share on linkedin
Share on pinterest
share on pinterest