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How an Affiliate Program Could Unlock the Highest Value DTC Marketing Channel

Vincent Wong Updated on August 13, 2021

How an Affiliate Program Could Unlock the Highest Value DTC Marketing Channel

We previously talked about how DTC ecommerce brands can own the customer journey by leveraging the right marketing channels. By removing any middlemen from the production cycle, you also remove the middlemen from marketing. This means you have the chance to really know your audience.

Amid experimenting with different marketing channels, you could be sleeping on one of the most powerful traffic sources: affiliate marketing. Businesses monetized through affiliate marketing are still one of the most attractive digital assets to own, selling for an average of $119,012 in 2020 on our marketplace. Check out our State of the Industry report to see how lucrative affiliate sites are!

An affiliate program can not only grow into its own revenue stream, it can also power your ecommerce business by providing traffic, insights into the customer journey, and protecting your brand against attacks from competitors.

When you have your own “army” of affiliate marketers promoting your product’s affiliate links, it’s one of the most hands-off traffic sources you can build and can turn into the highest converting marketing channels.

To take advantage of affiliate marketing, you’ll need to create your own affiliate program.

How Does Affiliate Marketing Work?

Affiliate marketing is when someone promotes a product or service and leaves a link to that offer. When a reader clicks on this link and completes a purchase, the affiliate marketer receives a small commission based on the total value of the sale.

Content creators, such as bloggers and social media influencers, tend to use affiliate marketing the most on all types of platforms.

Click here to learn more about affiliate marketing.

Is Affiliate Marketing Right for Me?

As an ecommerce brand owner, you’re definitely in the right place to take advantage of affiliate marketing.

Many online businesses have already recognized the power of affiliates, as over 80% of brands have an affiliate program. And the proof is in the pudding; affiliate marketing generated $6.8 billion revenue in 2020 alone.

With an affiliate program with competitive terms, your brand reach extends to highly qualified audiences when affiliates share your products with their readers. It’s also a cost-effective and passive traffic stream, as many affiliates are content creators who’ve mastered the art of SEO.

“Free” traffic and more brand exposure—what’s not to like?

How to Create an Affiliate Program

Creating your own affiliate program can become a new revenue stream as well as increase traffic to your storefront. Whether you’re a small business or a more established brand, anyone can leverage the power of affiliate marketing to scale their business.

Let’s look at what you need to know to start an affiliate program to take your DTC ecommerce marketing strategy to the next level.

Competitor Analysis

Seeing what types of affiliate programs the main players or your competitors have is always a good starting point. Feel free to sign up to them so you can check out their terms.

Look out for how affiliate commissions are triggered. The payout to affiliates is usually based on cost per action (CPA), cost per lead (CPL), or cost per impressions (CPM). This information will typically be listed in the FAQs, so take note of what your competitors tend to choose for when you’re deciding on your commission structure.

After that, see how your competitors want affiliates to promote the links. This gives you some idea of which types of affiliate partners they’re looking for based on the marketing channels and platforms that are being prioritized.

Outline Your Own Affiliate Program

These are just a couple of key things to consider when thinking about making your own affiliate program. After analyzing what other affiliate programs look like in your niche, here are some key factors to consider when creating a blueprint of your own affiliate program:

  • Affiliate tracking: how long does each cookie last?
  • Which digital marketing channels are accepted for promotion?
  • Are affiliate product commissions paid out by CPA, CPL, or CPM?

Remember, you could price yourself out if your commission rates are too low compared to your competitors or lose partnerships if your program structure is too strict. A good example of this would be over limiting what marketing channels affiliates can use to promote your affiliate links. You have to put yourself in their shoes—make it easy and profitable for them to promote your products!

You can choose the commission rate to be a fixed amount of a percentage of each sale based on whichever pricing structure is attractive to affiliates. Keep in mind not to set the rate too high that it eats into your profit margins and makes it unprofitable.

To stand out from the competition, think about providing extra value for potential affiliates. Extra features that make your program a sweeter deal than others include training with tutorials or branding resources that you could pass to affiliates that they can use when promoting your products.

Content swipes are useful assets to pass to affiliates. These are small snippets of copy that can be easily inserted into your promotional material, such as email marketing or Instagram stories.

Get creative with your program structure by offering different incentives for customers, such as cash-back offers, setting up a referral program, reward schemes, and point systems to redeem items. These types of schemes give customers a reason to come back, giving you valuable data on which products are popular and who your customers refer them to.

Contests and giveaways are fantastic ways to gain new customers in a short period and can be used as part of a new product launch.

When to Sign Up to an Affiliate Network

Signing up to a larger affiliate network like ShareASale and ClickBank can be useful if you’re creating an affiliate program for the first time and need an all-in-one solution. The upfront work is taken out of the equation since you’ll have access to templates and an affiliate management dashboard so you can keep track of all your affiliate partners.

Keep in mind that the affiliate fees can be costly, as these networks charge up to 30% of an affiliate’s total commissions.

If you’re set on signing up for an affiliate program, make sure you check out the best affiliate programs for beginners.

How to Build Your Own Affiliate Program

Building your own affiliate program offers you a greater opportunity to build a stronger relationship with your target audience when you partner with content creators who focus on providing value instead of pushing for a sale.

Apps like Refersion, Lead Dyno, and Omnistar can help you build your affiliate program from scratch. You can integrate the affiliate program with your ecommerce store to send payments, manage affiliates, and see which products have the highest conversion rates.

You can find some affiliate-building apps that build your affiliate program through a plugin, like Affilae and Post Affiliate Pro.

How to Find Affiliates

So how do you attract high-quality affiliates to start promoting your products through your affiliate program?

Hang out in channels where new affiliates in your niche tend to gather. LinkedIn and Facebook groups are good starting points since these communities are moderated and more likely to have relevant affiliates.

Social media influencers can be highly valuable affiliates to partner with when you run giveaways and contests. Choosing the right platform to promote your products could help you see a huge upswing in traffic to your storefront.

Content creators who have large recurring traffic to WordPress sites can be high-quality affiliates. If their blogs have high-quality content, there will be a higher level of trust from their readers. You can find appropriate sites to partner with by searching for relevant keywords through search engines.

How to Motivate Your Affiliates to Promote You

Getting affiliates to promote your products is half of the battle. Motivating them to keep promoting your brand in the long term is the other half.

You can motivate affiliates by creating an internal scoreboard that shows the total commissions paid out to date. This helps them keep track of how much revenue your affiliate program has generated for them, which will help them compare your affiliate commissions to other programs.

With enough affiliates promoting your products, you could leverage some friendly competition by showing a scoreboard of where affiliates rank.

Another way to incentivize promoting your affiliate program is adding bonuses for affiliates who rank in the top 10% by certain dates. The bonus revenue could keep your products in front of a high-converting audience when affiliates promote your products, and your program makes sense for their content platform.

Understanding the True Value of Creating an Affiliate Program

While affiliate marketing has a lot of upsides for your business’s bottom line, the true value of an affiliate program is the ability to build a relationship with your customers.

The common misconception is that affiliate marketing is just about the final click and generating another revenue stream. While this is one of the benefits, you get access to a huge database of customer info that shows you how easy it is for someone to go from the decision stage to purchase stage.

Understanding your customers better as a result of a successful affiliate program unlocks a host of other benefits, such as:

  • Creating a high-converting organic traffic stream outside of your ecommerce platform
  • Improving your marketing for greater brand equity
  • Deeper product research as a result of knowing what customers need
  • Exposure to a wider audience in shoulder niches beyond your normal means

When used correctly and with an open mind, you can use your affiliate program to research and launch new products through analyzing user behavior.

How an Affiliate Program Could Supercharge Your Business’ Value

When done right, creating an affiliate program improves your business in several ways and turns it into a more attractive investment for potential buyers.

In case you were interested in what your business could be worth, here’s a full breakdown of how to sell an ecommerce business.

The TL;DR is that an affiliate program lowers a buyer’s risk if they invest in your digital asset.

Your business has greater defensibility thanks to diversified traffic channels and revenue streams, as well as growth potential to start selling off of Amazon or whatever ecommerce platform you sell on.

Additionally, building a large monetized email list is easier with affiliates who can promote great offers for discounted products or packaged bundles that are time-limited.

It’s a terrific way to set you up for success if and when you decide to walk away from the business so you can focus on other projects.

Accelerating Growth by Acquiring a Highly-Qualified Audience

To skip ahead in the journey of building a profitable affiliate program, you could acquire an affiliate business to drive traffic to your store. It’ll save you time and energy trying to find relevant audiences as you’ll have a steady stream of readers who enjoy a particular type of content.

By strategically inserting your affiliate links throughout the site, not only will you get a bump in traffic headed to your storefront, but you’ll also enjoy a double dip of income thanks to the affiliate commission on top of the sale. The investment of an affiliate site saves you the time-opportunity cost of figuring out how to make an affiliate program work for you.

It could be a really smart acquisition that accelerates the flywheel for your existing ecommerce brand. With a content site, you can start building your authority by creating informative content to help your customers out and start gaining valuable information on the customer journey for your DTC brand.

From there, you can take your brand in several directions. You could optimize your existing products and marketing campaigns based on what you find from the affiliate program’s performance, or you could launch a new product that your customers are crying out for.

Looking for the right content site can be overwhelming at first. We recommend acquiring an Amazon Associates business if you’re new to content sites, since the program has many affiliates already on there. It’s a great starting point to compare which products are popular so you can focus your efforts on promoting certain SKUs.

Register on our marketplace to start browsing for Amazon Affiliate sites today.

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