The Complete Guide to the Benefits of Affiliate Marketing

Ever bought a new pair of headphones after watching a review about them from your favorite YouTuber? That transaction was a win-win for each party. You got a cool product, the headphone business got a sale, and the YouTuber got a commission. 

This form of marketing is known as affiliate marketing, where every partner gets a piece of the pie. Brands pay commissions to affiliates (creators, website owners, bloggers, influencers, etc.) to promote their products and bring new leads and sales to the business. 

But tit-for-tat is just the tip of the iceberg when it comes to the benefits of affiliate marketing. In fact, there are many reasons why 81% of brands use affiliate marketing for more web traffic and sales. We’ll walk through them in this roundup of affiliate marketing benefits for both brands and affiliates. 

What Are the Main Benefits of Affiliate Marketing for Businesses?

You might feel overwhelmed adding yet another marketing tactic to your strategy. But what if it brought you more sales with cheaper marketing costs? Let’s walk through the benefits of affiliate marketing for your business. 

Potential for more direct sales 

Conversion rates stagnant? You might need a little push to get your website visitors to actually make a purchase. A product review or feature from an influencer they love could be that push. At least, that’s true for 65% of retailers who report affiliate marketing revenue as up to 20% of their annual revenue. 

Think about it. Say you have an affiliate with a niche audience of 4,000 people. You’ve done your research and know their audience is aligned with yours. That’s a significant potential for more sales. 

And even if you don’t score a sale right off the bat? That’s not the only advantage of affiliate marketing.

Increased consumer trust from brand exposure

Think your customers trust your business? We hope so — but a recent study from PwC says otherwise. Apparently, companies tend to think their customers trust them more than they actually do. The reality is that only 30% of customers trust the businesses they buy from. Sure, they’re still buying — but imagine how much more they’d buy if they trusted you. 

Affiliates are niche experts that your audience trusts. Otherwise, they wouldn’t follow them or listen to their recommendations. When you partner with the right affiliate, you open doors to build more trust and, thus, more sales from your customers. 

An affiliate may demonstrate a product and their own experience, giving you social proof. Think about it — you might have to spend hours of labor in-house to create similar product videos for your social media channel, and an affiliate can do it for free. 

On top of that, the engagement that comes from videos like that spreads like a wildfire of positivity. Comments like “Just got mine today — love it” further build the social proof necessary to generate more audience trust and sales. 

Fresh marketing tactics

When did you last reach an “Ah-ha” moment in a marketing meeting? They’re uncommon because your team has spent too long staring at your products and content. 

But affiliate partners breathe new life into your campaigns and marketing strategy. They might come to you with unique experiences and innovative strategies to sell to your audience. Indeed, 28% of brands who use affiliate marketing see the new, innovative marketing partners as a unique strength of the model. 

Cheaper than other advertising models

Running a Google Ads campaign can place your products at the top of search engine results for your target audience, but you’ll pay dearly for each click (not sale — click). While organic social media marketing offers cheaper leads, it demands significant time and energy from your in-house team. 

We’re not saying you can’t use those other tactics. However, affiliate marketing is a more cost-effective and efficient method because you don’t pay unless an affiliate brings you results. 

Plus, you can decide how much you want to pay. For instance, Tapfiliate’s flexible commissions let you set flat-fee or percentage-based commissions with amounts you choose. You also have the option to automate increases based on high performance or, similarly, decrease them if your finances become tight. 

It helps you tap into new audiences

Say your audience of middle-aged mums might be your bread and butter. But you’re also curious about marketing new products to dads as your business evolves. 

How do you know if your products will resonate with your new audience?

A couple of affiliate marketing campaigns can give you an idea. You might not have the repertoire with a new audience, but you can expose your products to them through a new affiliate partnership instead. 

Easy to scale

Guess how many affiliate marketers there are? It’s pretty tough to give a number since they can’t all be recorded. But we’d guess in the range of millions, just from the sheer number of affiliates we’ve seen our clients partner with in our affiliate tracking software. 

The point is that businesses can promote products through hundreds or thousands of different affiliates. And they don’t just have to be one type of affiliate, like influencers. You can also leverage coupon websites, bloggers, and even existing customers to open doors to new audiences and sales. This makes it incredibly easy to scale your affiliate program once you get some traction.

With a reputable affiliate management platform, you can find automations to scale even faster. For example, Tapfiliate lets you auto-approve new affiliates, meaning you can automatically set custom criteria to accept new partners to your affiliate program. 

What Are the Benefits of Affiliate Marketing for Affiliates?

Affiliate marketing provides businesses with leads and conversions at fractional costs. Affiliates also receive numerous benefits. 

Passive income

Don’t get us wrong—affiliates work hard to promote your products to their audiences. It takes time to create social media posts, manage a website, and engage an audience enough to garner trust. 

However, once an affiliate is established in their niche, they can earn seriously lucrative passive income from their campaigns. Depending on the arrangement, they receive commissions for every sale they bring a business (or website visitor). 

And if their website brings consistent traffic from a business’s target audience? You’re looking at the potential for hundreds of leads and commissions without an affiliate lifting a finger. 

Numbers-wise, the average pay for an affiliate marketer is $62,000. Not too shabby, especially when they have minimal business expenses to worry about!

Minimal startup costs

Thinking about starting a restaurant? You’ll need at least $100,000 in startup costs. The reality is that most businesses require some startup costs, even if it’s only a few thousand dollars.

Not with affiliate marketing. All affiliates need is a laptop, time, experience, and enthusiasm in a given niche. They’ll also need to choose a marketing platform to post relevant content and generate website traffic. But all of that is relatively cheap compared to other startup processes.

Plus, affiliates aren’t bound by any location.

Flexibility and independence

Affiliates can engage audiences and bring you sales from the comfort of their own home. 

Or Greece. 

Or Hawaii. 

Or Australia. 

Location independence is definitely a benefit in this day and age, where the digital nomad life is so coveted. 

On top of the freedom to work wherever they want, affiliates can work whenever they want. Sure, they might want to catch their audiences in live stories at certain times when they’re online. However, tasks like building their social media presence, nurturing search engine rankings, and trying out your products can be done on their own schedule. 

Diversified income

Affiliate marketers might not make much if you look at a single commission. But they have plenty more opportunities to capitalize on affiliate marketing than with other advertising models. For example, affiliates can generate commissions through a variety of channels, like: 

• Income from YouTube views
• Commissions
• Sponsorships

On top of that, affiliates have a flexible schedule to focus on other entrepreneurial pursuits simultaneously. In fact, some work a full-time job in a given niche and capitalize on that niche via affiliate marketing. For example, you sometimes see dermatologists or skin care professionals working in clinics or retail stores during business hours but market products for commissions as affiliates on the side. 

Promote products in a niche you care about

Affiliate marketers have the pleasure of working in a niche they’re passionate about. Trust us; they can’t pretend so easily because of all the eyes of their audience. Most affiliates are involved in the niche they market by occupation or interest. 

For example, you might see an influencer promoting fitness products that show a genuine passion for helping people lose weight. She might be a personal trainer or simply love her active lifestyle and want to share it with the world. 

How Do Businesses Track Affiliate Performance?

So you’ve launched an affiliate program — yay! But how do you know if it’s working? Affiliate marketing platforms can help you track sales, referrals, and overall performance via: 

• Affiliate links: Customers click on a link in your affiliate’s content. If they make a purchase, that link connects to the affiliate. 
• Cookies: Cookies are files stored on a customer’s browser that track their online behavior and link to your affiliate if they take any action. 

A solid affiliate management software will record all the data from cookies and affiliate links into a digestible dashboard and reporting templates, allowing you to gather strategic insights. 

For example, Tapfiliate’s dashboard lets you see real-time data on important KPIs like clicks, conversions, and order value based on one or multiple affiliates over a chosen historical period. In other words? You can get a bird’s eye view of your affiliate program performance or go as granular as you like with filtration and custom metadata fields. 

What Are the Common Payment Structures in Affiliate Marketing?

We mentioned that affiliates make commissions for sales or leads they bring in. But the exact commission and payment depend on the structure specified in their agreement with a business. 

Here are some common payment structures in affiliate marketing: 

• Pay-per-sale (PPS): This is a common payment structure in which brands only pay affiliates for sales transactions. It’s one of the most cost-effective structures since you won’t spend any money without getting more in return. 
• Pay-per-click (PPC): This structure rewards affiliates for bringing traffic to a business’s website or product page. It’s a great tactic for brands that want to focus on getting as much exposure as possible, but it could be costly and vulnerable to fraudulent clicks. 
• Pay-per-lead (PPL): Leads are like the in-between of clicks and sales. A lead shows more promise than a mere website visitor but hasn’t yet made a purchase. This might look like a potential customer who added something to their cart or someone who signed up for your mailing list. 

Of course, payment structures will inform payout amounts and commission rates. You’ll likely pay more for a sale than you would for a click. Either way, you can review payment data to see which structure and commission amount is most lucrative for your business’s return on investment (ROI). 

Tapfiliate helps you view performance data and toggle commission payments and structures accordingly. You might reward a high-performing affiliate with an automated increase or lump-sum bonus. Or, you might decide to switch commission structures if you notice one outperforms another. 

Get Started Today

Bottom line? Affiliate marketing is a mutually beneficial strategy for affiliates, customers, and businesses alike. At Tapfiliate, we’ve witnessed the power of this model firsthand, whether it’s tripling revenue for an e-commerce business or providing a sustainable income for affiliate creators.

Chrissy Kapralos

Chrissy Kapralos runs a Toronto-based writing agency called No Worries Writing Co. She’s passionate about helping businesses communicate and share their stories. When she isn’t writing about the latest tech and marketing content, you’ll find her traveling, cooking, or watching horror movies.