Introduction to Affiliate Marketing with Shopify

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There’s a Catch 22 that comes with starting your own eCommerce business: you need to make a profit so you can reinvest it into generating traffic for business growth, but at the same time you need to generate traffic to make profits.

Similar to the chicken and the egg- which one came first?

But unlike the chicken and the egg, that Catch 22 for business owners has a solution. And that solution is affiliate marketing.

What is Affiliate Marketing?

Affiliate marketing is a marketing strategy whereby you let other people do the work of marketing your product and directing traffic to your website.

Sound easy? Well, of course there are costs involved. Affiliate marketing is essentially a reward based system where publishers are incentivised by the marketer (that’s you) to promote their product or service in exchange for a commission payment.

Affiliate marketing fills the gap between you and the customer. The publishers - whether they be loyal customers, bloggers, instagrammers or other social media influencers - are your very own champions who spread the word and get more people to buy your product.

The affiliate marketing cycle looks something like this:


Image source

What are the benefits of Affiliate Marketing?

No matter where you’re at with your business - whether you're a newbie or seasoned expert - it’s always beneficial to drive more traffic to your store. More traffic means more leads, more leads usually mean more conversions, and more conversions means more sales. The bottom line? Affiliate marketing done right can dramatically increase your sales and revenue.

It’s also a great way to get your business off the ground when you have to overcome the problem of getting the word out.

Affiliate marketing is one of the safest marketing activities you can invest in. Whilst social media advertisements and other paid leads have no guarantee of producing a solid ROI, affiliate marketing is a channel that can easily get you a 100% return on investment, since you’re only paying commission when the sale has been made.

Getting started with your Affiliate Marketing Campaign

Is Affiliate Marketing right for me?

The first question you need to answer is whether or not affiliate marketing is right for your product or service. There are two things you need to consider. First, have a look at whether your competitors are practicing affiliate marketing and how they’re doing it. If you see their products promoted by social media influencers and the like, it’s a good sign that affiliate marketing in your niche pays off.

Next, you need to make sure affiliate marketing makes sense for your own products in terms of profit margins. If you’re selling products with a very low profit margin then giving away part of the profit as commission to your affiliates, you might want to think twice. If you find yourself in this situation, you may want to consider increasing the price of your products to include the affiliate’s commission.

How much commission should I pay my affiliates?

Typically there are three ways to set up a commission structure:

Cost per Sale/Acquisition (CPA)

This is the most common way to structure your affiliate commission plan. When visitors that have been referred by the affiliate make a purchase at your store, the affiliate gets paid a percentage of the sale.

Cost per Lead (CPL)

The affiliate gets paid a fixed commission when a referred visitor fills in a form on your website.

Cost per Click (CPC)

Your affiliate adds a banner or link to their website, and if a visitor clicks through, the affiliate receives his or her commission.

You should pick a suitable commission structure based on what you want to achieve through your affiliate marketing efforts.

Be generous

Experience shows that affiliate marketing only works if you are providing a high enough incentive for your affiliates to really push your product. If you’re offering $1 for every $100 sale, promoting your product won’t be worth their time.

To ensure your affiliates direct plenty of traffic and paying customers to your store, it’s important you offer a commission rate that’s worth their time. There are affiliate programs that pay their publishers up to 30% commission!

Another factor to take into account is the commission structure set by the affiliates themselves. They are likely to have a minimum commission rate in mind. In order to successfully work together you’ll have to adhere to this commission structure and meet the minimum commission rates.

It’s about lifetime value

If you think about it, it makes sense to invest money in your affiliates. In the end, they are bringing paying customers to your website, whom will hopefully grow to be loyal, returning customers. Affiliate marketing is not just about securing that first sale. It's about the lifetime value each new customer brings with them.

How do I set up an Affiliate Marketing Campaign?

There are two ways you can go about setting up your affiliate marketing campaign.

Join an affiliate network

The eCommerce world knows the value of affiliate marketing and has developed communities and networks that can help ecommerce businesses find the best affiliates for their products and audiences.

Affiliate networks are marketplaces where eCommerce business owners can connect with affiliates. Examples include:

  • Share-a-Sale
  • Tapgerine
  • Commission Junction
  • Rakuten LinkShare

These networks provide you with a sales link that you can distribute to your affiliates to track revenue. Affiliate networks also have their own tracking systems, allowing you to see who made what sale and who to pay what commission.

Whilst online affiliate networks make it easy to connect with publishers that also target your audience, they often include expensive monthly fees on top of the commission you’ll pay to the affiliate.

Build your own affiliate system with Shopify

If you want to save money on monthly fees and have more control over your affiliate marketing campaign, you can set up your own affiliate system for your Shopify store. There are many apps available that you can easily integrate with your Shopify store. 

Refersion Affiliate Tracking App for Shopify

One of the most popular affiliate marketing apps for Shopify is Refersion. Refersion is a full-feature affiliate marketing platform that is quick and easy to set up, offering you and your affiliates a range of great features, including:

  • Access to the exclusive Refersion Marketplace so you can find qualified affiliates
  • Integration of the Reversion affiliate registration system into your Shopify store
  • Personalised dashboard for your affiliates so they can track performance, create links and work independently
  • Auto coupon code creation
  • Tracking of all affiliate activities, sales and commissions.

Refersion lets you do a whole lot with your affiliate marketing. The features are great, and given it’s the highest ranking app when it comes to integrating affiliate marketing with your Shopify store, it might just be your safest bet.

Talk to us

Elkfox is a Shopify Expert and can help you decide whether affiliate marketing is right for you and how to take the next step. Get in touch with us if you're interested in learning more.

*Image via Shopify