After you’ve started your online store, driven targeted traffic to your products, and made some initial sales, it can be tough figuring out what next steps to take to further grow your business.
One often overlooked approach is the effectiveness of affiliate marketing, and knowing how to create an affiliate program that helps your customers and advocates do your marketing for you. Today, we’ll cover the essentials and show you how to create an affiliate program for your Shopify store.
Table of Contents
- What is affiliate marketing?
- Benefits of affiliate marketing
- How to create an affiliate program for your business
- Get started with your first affiliate program
What is affiliate marketing?
Affiliate marketing is a reward-based system that encourages partners to promote your products in exchange for a commission.
A customer, advocate, or industry marketer signs up for your affiliate program and sends visitors to your store through their special referral link, and any sales that you make as a result of their promotion earns the marketer a reward.
Usually, an affiliate program will pay via a flat dollar amount or a percentage of the total sale, but incentives could also be free or discounted products. Target, for example, gives affiliates exclusive sales and promos, in addition to a commission.
Affiliate marketing is used both in business-to-consumer (B2C) and business-to-business (B2B) campaigns, but it’s far more popular among the consumer products industry. According to the AffStat 2016 Affiliate Marketing Benchmark Report, nearly 60% of affiliate marketers promote B2C, compared to 22% for B2C services and even less for B2B products and services.
Benefits of affiliate marketing
According to 2016 research from Business Insider, affiliate marketing is responsible for driving up to 16% of all U.S. ecommerce sales.
And there’s real-world evidence that affiliate marketing is effective: The Wirecutter, now owned by The New York Times, generated $150 million in online sales in 2015 alone by using referral links for the various products they feature.
How to create an affiliate program
- Is affiliate marketing right for your business?
- How to create an affiliate program with Shopify apps
- How to find the right affiliates
- How to manage affiliates
Is affiliate marketing right for your business?
Affiliate marketing isn’t right for every business. If you have small profit margins, for example, it may not make sense: It would be difficult to pay your affiliates and also turn a profit.
Affiliate programs need to pay a portion of each sale in order for it to be worth the promoter’s effort and money, depending on their approach to promoting your products. One of the best ways to find out if an affiliate program is a good fit for your business is checking to see other companies in your industry have created them.
For instance, BarkBox has been running a successful affiliate program for nearly a five years now.
@FanAvgJess let us know if you're interested in joining the BarkBox affiliate program! If so just reach out to firstname.lastname@example.org. #woof— BarkBox (@barkbox) February 1, 2013
A program with that kind of longevity implies it’s working and is producing solid returns on time invested for BarkBox. If you dig through popular dog accounts on Instagram, many will have a BarkBox affiliate link or code in their bio, like this one from @henrysworldtoday.
That’s meaningful reach and entirely built on the existing work BarkBox does to keep their affiliate program running. It's a nice win for both BarkBox and the Instagram account owners.
How can you see if other businesses in your niche have successfully learned how to create an affiliate program? A simple Google search targeting competitors can dig up sites that have affiliate programs of their own. Your searches could be:
- “(your competitor) affiliates”
- “(your competitor) affiliate program”
- “(your competitor) affiliate marketing”
You can also look at relevant hashtags on social media. A search for hashtags related to your industry will reveal influential users. You can check out their profiles to see if they’re promoting your competitors via affiliate marketing.
Book mail and a book haul! Thank you very much @berkleypub for sending me a free copy of Vox to review! Gonna be reading this dystopian read this month! 🙌 . Hunger by Roxane Gay has been on my radar FOREVER so I was thrilled when @willoughbybooks chose it as my last subscription book! I’m very sad that my two year subscription has ran out but I’ll be resubscribing when I get a full time job 😍 and if you want to subscribe in the mean time, use the link in my bio to save 10%! #affiliate . The other three are charity shop finds from my outing this morning! I can’t resist picking up Toni Morrisons now and the other two just caught my eye. Idaho is described as a raw family drama and The L-Shaped Room is the account of a pregnant single girl in 1950s London! . I would love to hear your thoughts if you’ve read any of these! ☺️ . . . . . . . . . . . #voxbook #christinadalcher #hunger #roxanegay #tonimorrison #bookhaul #bibliophile #bookstagram #reading #igreads #bookworm #booknerd #booklover #booklove #lovebooks #bookish #bookaddict #read #fiction #secondhandbooks
Now that you’ve determined that it’s a route you’d like to explore, let’s take a look at how to create an affiliate program for your Shopify store.
How to create an affiliate program with Shopify apps
Thanks to Shopify’s partners and app developers, figuring out how to create an affiliate program for your Shopify store is easy, as you can start by simply installing an affiliate app of your choosing. From there, each app will take you through an onboarding process that will get you up and running with an affiliate program catered to your business.
It’s up to you which app you want to use, but here are a few examples of some of the affiliate marketing apps available in the Shopify App Store. And if you need help installing an app on your site, head over to our official documentation to learn more about the Shopify App Store.
Refersion is an incredibly powerful referral platform. With over 100 reviews and a five star rating, it’s certainly one of the apps you’ll want to checkout. Best of all, it scales with your business. Start out on a free plan, and as you see the need to expand your affiliate offerings, upgrade to a paid plan.
Another popular affiliate marketing app is LeadDyno. LeadDyno integrates with your Shopify store with just a few clicks, and is highly customizable. Pay your affiliates automatically or with "one-click" approval using PayPal, Dwolla or even Coinbase. LeadDyno totals and pays out affiliate commissions for you on the fly.
With thousands of business owners using Omnistar as their preferred affiliate software, they’re for sure a platform you won’t want to skip when doing your initial testing. With big clients like Macy's and Cisco, you know the software has to be good. You can get started with a 15 day free trial to play around with Omnistar.
An incredibly clean interface at a very reasonable price, Affiliatly comes highly recommended from its users. While Affilatly is a newcomer to the app store, it certainly packs a punch when it comes to features and reliability. Be sure to take a look at Affiliatly's 30-day free trial to get a feel for how it works.
Another affiliate program app for your Shopify store is Enlistly. Enlistly helps you with things like custom commission rates based on affiliate, and transaction type. With a clean interface and a low monthly fee of just $9.99, this is certainly one app you'll want to test out.
How to find the right affiliates
After you’ve figured out how to create an affiliate program, you’ll need to recruit the right kind of affiliates to join it.
Some affiliate programs, like the one used by Twitch, a video game-centric streaming platform, only accept especially noteworthy applicants. For affiliates in those programs, acceptance is akin to a badge of honor and something to brag about.
But not all brands have the luxury of Twitch’s status. That being said, there are a few ways to attract affiliates to join your program and promote your products.
Announce your affiliate program on your own social media channels. Vianetic announced their affiliate program on Instagram, encouraging followers to learn more and apply. They reiterate the benefits of being an affiliate to draw more interest.
If you have an email list, use it. Requests over email have the greatest impact on affiliate engagement compared to all other channels, according to the AffStat 2016 Affiliate Marketing Benchmark Report. Tell your subscribers about the affiliate program and encourage them to apply and help spread the word to others who may be interested.
Visitors to your website are already familiar with your brand to some extent, making them potential candidates for your affiliate program. Plus, this is where nearly a quarter of affiliate marketers find out about new programs. Promote your affiliate program on your site with a link in an out of the way but still easily accessible place like your footer, and create a page dedicated to the program and highlighting the benefits of joining. Here’s how Pooch Perks does it.
Remember that after an affiliate joins your program it’s their job to promote your products, but it’s your job to promote your program. Make a compelling offer and make it easy for them to apply. Katari Skin Care, for example, has a simple Google Doc that those interested in joining their affiliate program can submit to get started right away.
When promoting your affiliate program, make sure you’re including information that potential promoters want to know. Generally, the most influential parts of your program are the product/service relevancy, affiliate program reputation , and affiliate network or tracking platform. Make sure you include that information when you promote your program.
How to manage affiliates
Once you’ve recruited your affiliates, you’ll want to keep tabs on them and the performance of your program. Regular communication is essential to establishing a strong affiliate program, and this can happen via email, as that’s the preferred method of communication for most affiliate marketers, per the AffStat 2016 Affiliate Marketing Benchmark Report.
Make sure your affiliates know the rules of the program and become familiar with your brand. Creating a stable of content that they can use, including graphics, pre-written social posts and a list of approved (or even mandatory) hashtags will keep synergy among your affiliates.
Understanding the effectiveness of your affiliate program is crucial for sustainable success. Identifying your top-performing affiliate marketers, for example, can help you double-down on what’s working. Why are they so effective? Were they very loyal to your brand before becoming an affiliate? If yes, then maybe you need to contact your most frequent shoppers about joining the program.
Some metrics you’ll want to consider paying extra attention to: total affiliate sales, sales per affiliate, average order size (especially compared to sales not attributed to affiliate marketing), total payout, payout-to-sales ratios, gross margin, number of affiliates, number of new affiliates and number of affiliates who’ve left the program.
Get started with your first affiliate program
Now that we’ve taken a look at how to create an affiliate program for your Shopify store, it's your turn to get started! Let us know in the comments below if you have any tips and tricks for first-timers.
Editor's note: A version of this article was originally published September 2015.