For any online entrepreneur, the ultimate dream is to start an online business that eventually becomes successful enough to sustain itself – a business that generates traffic and sales every day on its own, leaving you with nothing to do but collect the money and fulfill the orders.
That may be the dream, but the reality for most online entrepreneurs is that owning an e-commerce business is a constant grind of outreach, promotion, content marketing and SEO. Just when you start to think that you can kick back and relax a little, Google makes an algorithm change, and your rankings drop. There’s nothing to do at that point but get back on the hamster wheel.
Or is there? Starting an affiliate program is another option that can potentially result in consistent traffic and daily sales. When you have an affiliate program, bloggers and other online marketers refer users to your website. If those users end up buying products, you pay commissions to the people who referred them. It’s a little like paying an ad network like AdWords to send traffic to your site. The difference, though, is that you pay affiliates only when sales are made.
Affiliate marketing sounds like a great deal, right? You’ll add your site to an affiliate network, and top-notch online marketers will find you. Before too long, you’ll be one of the big boys – just like Premium Vape.
It isn’t that easy, of course, but starting an affiliate program can definitely be a great way to make your web traffic and sales numbers a bit more consistent. If you can manage to land the right affiliates, there’s even a chance that your affiliate program can become legitimately huge.
These are the things you should consider before starting an affiliate program.
Affiliate Networks vs. Self-Hosted Affiliate Programs
There are two different ways in which you can start an affiliate program. One is by joining an affiliate network, and the other is by hosting the affiliate software on your own site. Running your affiliate program through an existing network is easier in several ways. The affiliate network can help with getting your website set up, and the network will track sales for you. The network will take a cut of any referred sales, though, which means that you won’t be able to pay your affiliates quite as well. If you host your own affiliate program, you’ll only pay a one-time fee for the software and can therefore offer higher commission rates to your affiliates.
Experienced affiliate marketers know that websites with self-hosted affiliate programs often pay higher commissions. However, one big difference between affiliate networks and merchants with self-hosted affiliate programs is that affiliate networks always pay commissions on time. When merchants with self-hosted affiliate programs go out of business, they generally stop paying commissions – and that can happen with no warning. The fact that affiliate networks always pay on time makes them very appealing to risk-averse marketers.
If you’re going to run your program through an affiliate network, you should research how the different networks track and attribute sales. Many Internet users have ad blockers these days, and if an affiliate network’s tracking doesn’t work through ad blockers, affiliate marketers will avoid working with merchants on that network.
Setting Your Price Structure for an Affiliate Program
Unless you’re fortunate enough to operate in an industry with an extremely high profit margin, you may have to adjust your prices to cover the commissions that you’ll be paying your affiliates. Here are some things to consider before you change your price structure.
- It may be that raising your prices is the only way to ensure that you won’t lose money on referred sales.
- On the other hand, consider the possibility that new customers may go through affiliates when buying from you for the first time, but for future orders, they’ll go directly to your website. In that sense, you might think about keeping your prices the same. The commission paid on the initial sale would simply be the cost of acquiring the customer.
- Many of the highest-volume online merchants do not have affiliate programs. It’s almost impossible to have the Internet’s best prices and to have an affiliate program.
- If running an affiliate program requires you to charge more than your competitors, it is entirely possible that the affiliate program could cause you to lose business rather than gaining it.
Finding Successful Affiliate Marketers
Whether you’re the owner of an e-commerce business or a blogger hoping to make money from affiliate marketing, making a living online is not easy. Many bloggers earn almost nothing from their work, and you should prepare yourself for the possibility that a significant number of the people who join your affiliate program are rookie affiliate marketers who will never figure online marketing out and will never make a single sale.
The truth is that when you start an affiliate program, there’s no guarantee that the program will earn any money at all without your input. What you really want is to attract affiliates who already know how the game works and will actively promote your brand.
The problem with getting successful affiliates to join your program, though, is that most successful online marketers aren’t actively looking for new affiliate programs to join. They’re busy nurturing the relationships they already have and are spending most of their time looking for ways to earn more money through the affiliate programs that already generate revenue for them.
Considering how difficult it is to find successful affiliate marketers, you should prepare yourself for the fact that starting an affiliate program won’t mean that your company will suddenly start generating a flood of sales without any input from you. In fact, you may even end up spending more time on outreach than you currently do. Since the top marketers aren’t looking for new affiliate programs to join, it’ll be up to you to identify who those people are and convince them that they can earn more money with you than they earn with the merchants they already promote.