Can you and your website become the ultimate salesperson?
Labelled one of the most high-growth avenues in digital marketing, affiliate marketing is defined as ‘the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make.’ [Source: Pat Flynn’s Epic Guide to Affiliate Marketing].
In recent years, the results-based marketing model has proven itself to be one of the best performing channels for brands – helping them to drive product awareness and sales with the help of experienced, credible affiliates who try and test their products.
Studies are showing affiliate marketing is now out delivering paid search on ROI with more than 15% of total online sales now being attributable to affiliate partners. Total affiliate marketing spend is due to reach USD$8.2 billion by 2022, up from 5.4 billion in 2017 [Source: Affiliate marketing spending in the United States from 2010 to 2022].
In this week’s blog post, we look at how affiliate marketing works, how to get started and up and coming trends. We also showcase a few businesses currently for sale on Flippa who are deriving affiliate commissions.
How it works
There are 3 parties involved in an affiliate marketing arrangement – the merchant, the affiliate and the consumer/customer.
The merchant is the seller, creator, retailer or vendor. Anyone can be merchant, provided they have a product or service to sell.
Sometimes called a “publisher”, an affiliate can be an individual or company. They receive financial incentives (generally commissions) by placing trackable, unique affiliate links on their websites, blogs or social networks. Links are incorporated in product reviews, descriptions or demonstrations. Depending on the particular affiliate program or arrangement, an affiliate may be paid per sale, per click or per lead. Affiliate marketing is certainly a convenient, flexible way from money and can be done from home. It requires no product creation, customer or after-sales service and most affiliate programs are free to join. While the risk and barrier to entry is low for affiliate marketing, it is certainly not a get-rich-quick method. It can take time to build sufficient traffic to make a decent income, can be competitive and you have no control over product quality and therefore the customer experience. The amount of income you make is also dependant on the size of your commission, although negotiable, the nature of the product (digital products typically offer higher margins), the size of your audience and your ability to communicate and market effectively.
The most important party of the arrangement is of course, the customer as without a sale, no commission will be distributed. Commissions are generally incorporated into the retail price.
How to get started as an affiliate marketer
To get started as an affiliate marketer, there are a few key steps.
1. Find a product
To start affiliate marketing, the first step is to find a quality company or product you would like to promote. Do your research via Google, your own network and Amazon. To avoid putting all your eggs in one basket, it is a good idea to choose products from a variety of companies, preferably within a single niche. You can then sign up as an affiliate.
2. Develop an audience
Before adding any affiliate link to your website or blog, you must (a) establish an audience; and (b) earn their trust. You should endeavour to develop a rapport with your audience and be personable in communication. It is best to only promote products you know, are familiar with or would use yourself, and that you believe your audience needs or would be interested in. Next, test, try and experience the product to see if you would recommend it. If you like it, review it honestly and post your thoughts on your blog, create a case study, record a video for You tube or host a live webinar. It is expected that creative audio-visual content will reign over traditional content in future years. Finally, include a call to action with the affiliate link so your audience can click it and buy the product! A call to action might appear in the emails, blog posts, landing pages, podcast notes or in social media.
3. Generate traffic
If you’re just starting out, work on generating traffic and growing your audience. Apps such as “Hello Bar” and “Exit Gate” are useful tools to drive email subscribers. Marketing strategies such as search engine optimisation (SEO), paid search engine marketing (SEM), email marketing, content marketing are all invaluable tools to drive quality traffic to your website or blog.
Once you have traffic, use tools like Google Analytics to analyse it. Google Analytics will tell you valuable information about where your traffic is coming from – namely, whether it is organic, paid, social, referral, email or direct. It also provides important data on time on page, bounce rates, location, age, gender and device type. It is also good to test the placement and positioning of ads and links to see what generates the highest click through rates.
Trends and things to be aware of.
Looking to purchase an existing affiliate business?
If you’re interested in affiliate marketing but don’t have the requisite traffic or followers or are just starting out, it may be worthwhile purchasing an already existing affiliate business. Flippa currently has a number of profitable or potential affiliate businesses for sale, including GetConnected.aero (USD$24,995) and Teehunter (USD$15,600).