A beginner’s glance into affiliate marketing

Unless you are already in the know, affiliate marketing can seem like a foreign language – something that’s very confusing and perhaps a bit alien. In effect though, affiliate marketing isn’t in any way a scary or underhand marketing activity. It can be extremely fruitful and bring great return on investment when used as a marketing tool effectively.

Without further ado, here’s a short beginner’s guide to affiliate marketing, designed to answer all of your burning questions on the subject and help you decide if it’s the right approach for your business.

What is affiliate marketing?
In a nutshell, Affiliate marketing is a type of performance based marketing activity. Businesses work with affiliates (which are usually other businesses or blogs) and reward them based on the number of new customers the affiliate drives for you. This could be through sales or leads – it depends on the nature of your business and what action is most valuable to you.

So if for example you ran a clothes business and operated an affiliate programme, you would reward an affiliate with a commission pay out each time that affiliate sold an item of clothing for you. The commission you pay the affiliate would be a percentage of the total value of the item of clothing sold. So, if you offered 5% commission and the top costs £25, you would pay the affiliate in question commission of £1.25 for selling the top for you.

How much commission you decide to pay will depend on many factors; how valuable a new customer is, what the revenue generated is worth to you or how much a typical lead is worth. You can even pay different rates of commission in tiers, depending on the value of the products being sold.

What else do I need to know?
You might be wondering how on earth you keep track of an affiliate programme, and why anybody would want to work as an affiliate for you when their reward is quite minimal. Well, many people work as an affiliate to either supplement the income they already earn from their business or blog. In this instance, they tend to work with select brands which have an affinity with their readers or audience. In this case, for smaller affiliates you might find they generate a steady trickle of revenue for you.

On the other hand, many people earn their income solely from working as an affiliate and there are many websites which work solely on this basis (think cashback websites, voucher code websites etc). In this instance, they invest heavily and work with many hundreds of merchants in order to earn money – their business is made from your business.

How do I get started?
Generally, unless you have a lot of in house resource and lots of knowledge on the subject, the best way to run an affiliate programme is through a professional, dedicated platform such as Affiliate Window. Whilst you have to invest to begin with to get set up on a platform such as this, it’s well worth it.

These professional platforms are built purely for affiliate marketing. You have access to a huge range of publishers (aka affiliates), you can set up your programme with ease and keep track of which affiliate are making sales – everything is dealt with through the platform which saves an awful lot of headaches.

There’s a still of lot of management involved though – getting new affiliates on board; ensuring existing affiliates play by the rules; keeping in regular contact with the affiliates on your programme; plus, seeking out and vetting new opportunities and dealing with any issues as they arise.

To conclude; if you are already investing in PPC and SEO activity and starting to investigate what other methods of marketing could work for you, particularly as an e-commerce business, affiliate marketing would be worth considering. 

Written by Kerri Ware, Senior Account Manager