Affiliate Marketing
eCommerce
Key Concepts and Benefits of Affiliate Marketing in E-commerce
Affiliate Marketing
eCommerce
Ever bought a workout outfit from Gymshark? If you saw a discount code on Instagram, chances are it came from an Athlete — aka, a Gymshark affiliate.
It turns out that those influencers can make up to $100,00 a year through 4%- 10% commissions, but of course, the e-commerce brand Gymshark makes even more.
If you’re an e-commerce brand, affiliate marketing could be the marketing strategy that takes you from a short time to viral — in brand exposure and revenue.
Keep reading as we explore affiliate marketing basics, why it’s vital for e-commerce brands, and examples of brands that are killing sales with affiliate marketing.
Affiliate marketing is a marketing strategy where brands pay commissions to affiliates (partners) who successfully bring them new leads, customers, and sales.
In an e-commerce model, affiliate marketers use their platforms to create content around and eventually sell individual e-commerce products for a brand.
The most prominent e-commerce affiliate marketing program is Amazon Associates. In fact, the online giant has 47% of the affiliate market as a whole, with 47% of market share.
Think about it this way: every customer likes to see social proof before they buy a product. That’s partially why you always peruse Amazon product reviews and ratings before hitting “add to cart.”
However, affiliate marketing content brings a regular review to life with visuals and commentary about a brand’s product. For example, it’s always more enticing to sell a pair of jeans with a model wearing them than just a written description, right?
So, what goes into the affiliate marketing process? Keep reading to find out.
You don’t just post an Instagram story and call it a day in the affiliate marketing world. On the contrary, this marketing strategy has a ton of moving parts to operate successfully. Here’s a quick look at the key concepts:
An affiliate program is an agreement offered by a brand to potential affiliates. It outlines the criteria a brand has for potential affiliates or partners and the terms of the working relationship. Those terms might include commission rates for sales, types of sales considered valid, and how long affiliates have to convert a lead to get a commission.
Ever bought a product off Etsy? The creator marketplace offers an affiliate program that’s open to all affiliate types except cashback and coupon websites.
But it’s not just e-commerce brands and websites that offer affiliate programs. They’re prominent in the SaaS world, too. For example, SEO software Semrush has an affiliate program that offers potential affiliates $200 for every sale they make.
We mentioned a flat-fee commission with Semrush’s affiliate program. But that’s not the only commission structure available to you. With e-commerce businesses, product-specific commissions are a popular choice. This toggles the commission percentage or flat fee for each product. For example, you might increase the commission rate for more expensive items to entice affiliates to sell more.
You might also choose lifetime commissions, which reward affiliates for every purchase a particular customer makes in their lifetime (not just one purchase). Percentage-based structures, between 4% to 10%, seem to be the most common.
When you click on an affiliate link or product, you might make a purchase immediately or wait for a few weeks to make sure it’s the best purchase for you.
Cookie duration measures the time between a website visitor seeing affiliate content and then purchasing the product. Of course, your customers might not decide right then and there if they want to buy. That’s why cookie durations usually last between 20 and 90 days, to ensure affiliates are still awarded a commission for a later purchase.
Affiliate marketing programs might have hundreds or even thousands of affiliates (like Amazon). The right affiliate management software is essential for tracking and attribution.
By tracking, we mean tech to track each conversion or sale that your affiliates bring. Attribution is the accurate identification of the affiliate who brings each sale or conversion, and their total revenue or sales value.
Not all affiliates are the same! Types of affiliates include:
Remember to research your target audience (including their website behavior) to find the most relevant affiliate partner types.
We covered a few elements of affiliate marketing, but how does it all flow together? Here are the steps from inception to sales.
Here are our top benefits for affiliate marketing in e-commerce businesses:
Did you know e-commerce brands spend as much as $5,000 per month on pay-per-click (PPC) advertising? These are the sponsored posts you see on Google search pages or ads within your social media feed.
However, affiliate marketing is a fraction of the price and requires no upfront investment. Why? Because you don’t have to pay your affiliates until you actually see a sale.
Imagine you’re a brand new e-commerce brand on the map. Nobody heard of you — but if you partner with an influencer on Instagram with 300,000 followers? All of a sudden, 50,000 people just saw your product modeled in seconds on an Instagram story. Hello, brand awareness!
Affiliate marketing is easy to improve and strategize because you can always find a new affiliate to post your promotional content.
Affiliate programs are easy to scale because you can recruit as many affiliates as you want to your program. When you add more qualified partners to your network, your clicks, leads, and revenue will skyrocket.
Just remember to use an affiliate tracking system that has the capacity for this growth! For example, Tapfiliate offers scalable pricing tiers that help you track more clicks and conversions as you grow your program. But even our most basic plan still offers unlimited affiliates and affiliate programs.
Online businesses have the potential to reach abundant new audiences since geography and ethnicity no longer have barriers on the internet. However, you can’t realize that potential without the right partners.
Say you want to tap into the South African shoe market. You might use a South African blog or influencer to showcase your shoes on your channels, thus opening up a new international market.
Of course, niche markets aren’t only geographical. Influencers come from all types of interests and communities. If you sell accessories or apparel, you could have a niche influencer in the deaf community model it to her followers. Just type in #whateveryouwant on Instagram to find a ton of potential niche markets to tap into.
Your affiliate marketing strategy won’t be perfect right off the bat. You’ll encounter a few challenges, like:
Affiliates can influence your brand reputation. You wouldn’t want to trust an affiliate marketer just to have a customer complain about sneaky or pushy tactics. Similarly, you should make sure affiliates have relevant followings and reviews from other happy brands.
E-commerce websites have to take extra care to provide a solid product every time. Of course, manufacturing hundreds or thousands of products can always lead to the odd dud. Just have a supply chain process in place to capture any potential poor products, and be prompt when responding to any poor reviewers or testimonials.
If an e-commerce affiliate has a large following among your target audience, chances are your competition will want them, too. Stay ahead of the competition with an attractive commission per sale amount and engage affiliates with branded social media assets and regular communication.
Enough about challenges — let’s spin this a bit more positively. Keep reading for our best tips for new affiliate marketing success:
Curious to see e-commerce affiliate marketing in action? Let’s look at one solid example from Tapfiliate’s client roster.
Affiliate marketing isn’t just a strategic option for e-commerce businesses — it’s a necessity. E-commerce transactions continue to grow yearly, reaching over $8 billion in sales in 2024. Meaning? More customers want the convenience of online shopping. Your job? Tap into all those new customers online with the right affiliate partnerships.
Affiliates help bridge the gap between consumer and brand, often humanizing a company and making their products look more reputable and appealing to potential customers.
Of course, you’ll need to keep tabs on performance somehow. That’s where Tapfiliate’s affiliate tracking solution can help with its direct integrations, flexible commissions, branded assets, and scalable tier rates.
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.