How To Boost E-commerce Growth: How Affiliate Marketing Accelerates Online Sales

E-commerce is a highly competitive, and an extremely lucrative industry. In the US alone, it is projected to generate $1.2 trillion revenue in 2024. 

Along with astronomical profits come many challenges, and securing the company’s growth is one of them. 

In search of strategies and pathways to continuous scaling, many E-commerce companies come across affiliate marketing. But is it as effective as many paint it to be? 

With affiliate marketing being responsible for 16% of all US internet orders and generating major brands from 5% to 25% of their online sales, we believe it is even more effective than we’re often led to believe.

Young brands and established ones alike – any E-commerce business can grow its online sales with the help of the affiliate program, and today we’ll talk about the best ways to do it.  

What does affiliate marketing mean in E-commerce?

Affiliate marketing is the type of marketing where affiliates (partners) bring new leads and sales to the brand (E-commerce) in return for a commission. 

Essentially, you recruit different people to sell your products by sharing a small portion of your profits. In other industries, many affiliates are rewarded for different customer actions. For example, a SaaS company may want its affiliates to lead people to their newsletter or registration for an event. With E-commerce, it’s mostly the purchase by the client. 

Types of affiliate partners in E-commerce

When you think about E-commerce affiliate marketing, you instantly think of a social media influencer as a partner. However, they’re not the only ones. 

1. Influencers and content creators. Bloggers with substantial following who post regular content on social media are very common affiliates in E-commerce. For instance, a beauty blogger who is filming themselves doing an evening skincare routine can mention a brand’s product and leave an affiliate link in the description. All followers who click the link and buy this product will be counted toward the affiliate earnings of this blogger.
2. Thought leaders. Those are people who may not be influencers in the sense that they produce social media content but someone who is very respected and trusted in certain fields. Those thought leaders can talk about your products and platform overall, and share their affiliate codes during interviews, lectures, or email campaigns they do as a part of the project they’re working on. 
3. Newsletters. Speaking of emails, newsletters are all the rage lately, and many of them compete with social media in engagement, user retention, and selling potential. 
4. Websites. Coupon and cashback websites, or regular high-traffic websites make excellent affiliates for E-commerce. Coupons and cashback are compensated by the commission these websites get from brands. Popular websites can add your products or mention your platform when making holiday gift guides or review particular product groups, such as lamps, candles, perfume, or anything else. 

Key benefits of affiliate marketing for E-commerce

Affiliate marketing offers a number of strong benefits to E-commerce brands of all sizes and life stages. 

• Generates traffic and leads for you. One of the biggest challenges of any business, let alone E-commerce, is finding customers. Affiliates offer an unprecedented reach and enable your brand to get to the people who could have never heard about you or never considered buying from your website, if it weren’t for the affiliate. 
• Improves conversion rates. Affiliate partners present your products to their audiences with the tone of voice that’s familiar to them. Also, they usually create additional content around it so that it’s not viewed as aggressive selling but rather a recommendation. As a result, users are more susceptible to making a purchase.
• Financial efficiency. Affiliate programs operate on a performance-based model, meaning that you only pay for closed sales, and not for leads as such. 
• Improved SEO. If some of your affiliates are websites, their linking your pages will contribute to your search engine ranking, as your domain authority will go up. This, in turn, will help organic leads find you more easily. It’s a win-win!
• Support for product launches and niche product sales. Selling a new product or something that not many people need is tricky. Affiliates have the audience’s trust and the expertise to facilitate both. 
• Partnership flexibility. In theory, you can arrange your partnership with affiliates in any way, shape, or form that you like. Surely, it needs to be lucrative for both parties, but the terms of products promoted, rewards and compensation, and engagement on the E-commerce side – all that can be negotiated.  
• Data precision. With affiliate marketing, you know exactly where your customers came from and what led them to the purchasing decision (your affiliate). Using this data, you can analyze what affiliates tend to perform better and what type of content stands out. This knowledge can be later used to allocate future budgets and forecast sales with more precision. 

Perhaps the biggest benefit of affiliate marketing is that it unlocks easily scalable growth. With an abundance of potential affiliates, and their unique audiences, the sky is the limit.  

How does affiliate marketing help E-commerce scale?

There are several ways that affiliate marketing programs and campaigns can facilitate growth and help break into the next revenue bracket.

New customer acquisition 

Affiliates give E-commerce reach. It’s a powerful way to extend your usual customer base. By exposing your brand to new audiences, E-commerce brands get to build brand awareness among cold leads, and help move warmer leads closer to the purchasing decision. 

With other paid advertising methods, your products may mostly reach the audience that is already familiar with you and maybe even bought something on your website before. While this is also valuable, and you should always work on retention, breaking through to someone who has no idea you exist is paramount to scaling.

Budget-friendly promotion 

Paid-for advertising is becoming increasingly expensive, and competing with established giants is borderline unaffordable to many smaller E-commerce businesses. Yet, no matter if you operate on an enterprise budget or on a small business one, you’re most likely under pressure to keep spending on the lower side.   

That’s where affiliate marketing comes in to save the day. It often costs many times more to acquire a customer with paid advertisement than it is with affiliate marketing. According to Statista, in the US, affiliate marketing spending sits at $10.7 billion while the cost of search ad spending alone reached $132 billion. 

The beauty of affiliate marketing that is sometimes overlooked is that it’s a performance-based system. Surely, you need to invest in developing and maintaining an affiliate program, continuously work on developing relationships with affiliates, and have powerful affiliate marketing software to have everything running smoothly. Still, you’re paying for the clients who’ve purchased your product and not for everyone to whom your affiliate presented it. You’re not expected to cover the promotion that did not result in a sale, which makes it a low-risk investment with transparent ROI. 

Social proof 

The majority of people don’t trust ads, and the trend is only getting worse. Luckily, with affiliate marketing, we can utilize social proof to save the day. As many as 90% of people are likely to trust a recommendation, even if it’s coming from a complete stranger.  

Affiliate campaigns feel like hitting the jackpot, as you’re not only gaining access to a partner’s brand and the trust associated with it but also getting lots of unique content items in different formats created for you at no additional cost.

Most importantly, you build credibility among vast audiences, helping customers make the purchasing decision without the negativity associated with traditional ads.

How to get started with an affiliate program as an E-commerce

If you don’t have an affiliate program yet, now is the best time to start! The longer you put it off, the more benefits you miss out on. Plus, your competition is recruiting the best affiliates now, making it more difficult for everyone else to find reliable partners. 

Here are the key steps to launching an affiliate program of your own, and setting yourself up for success from the start. 

1. Start with the Why. Define your main goals for the affiliate program. Surely, this can change over time, but you need to have a clear goal in mind before the launch. Depending on what you’re trying to achieve, you’ll be reaching out to certain potential partners, offering them specific bonuses, and so on.
2. Think of the bonus system. With Tapfiliate, for example, you can select one of the 5 different commission types, and you can create flexible rules to add bonuses or double commissions once partners reach a certain threshold. Consider using a number of commissions to cater to different types of affiliates and products. 
3. Design program policies. Make sure you have T&Cs ready before your affiliate program is launched. Outline the do’s and dont’s, payment terms, approved channels, and all other details. Every partner needs to see this policy and commit to following the rules. 
4. Choose an affiliate platform. This is the software that will keep track of your affiliate’s activity and help you with essential tasks, such as commission attribution, payout calculations, fraud prevention, and reporting. Most importantly, this solution will automate the majority of affiliate program-related processes, making sure your marketing team is not overwhelmed. 
5. Create a knowledge base for your partners. Affiliates will not be super loyal and invested from the start, and even if they are, it’s in your best interest to make partnering with you easier for them. Make sure you have an FAQ section, helpful marketing materials and cheat sheets on your key product lines, and consider creating banners and other promotional content only available for affiliates. Anything that will help them sell your products better is good for you. 

Tip: When launching the program, check what competition and people in other industries are doing. Affiliate program examples can inspire you and give a fresh perspective on the way you can structure and advertize your program. 

Common affiliate marketing mistakes in E-commerce and how to overcome them 

You’ve launched your affiliate program, there is already some traction, but you feel like you’re not getting the results you expected you would. 

Perhaps you’re making one of the typical mistakes of E-commerce affiliate marketing. Here is how you can overcome them. 

Ignoring the data

It’s common for some affiliate marketing managers to not pay too much attention to statistics and the data that they get from affiliate activities. As a result, they don’t know what is happening to their campaigns and miss the issues that could have been avoided or easily dealt with at the start. And now they’ve skyrocketed into a much bigger and more complex problem and require a lot more attention.  

If you’re in this position or want to avoid it, get data-driven insights that are available in your affiliate tracker and use them to analyze what’s working and what’s not, understand your customer behavior better, and make changes to future campaigns to boost their efficiency. 

With data, you can monitor your affiliates, identify the top and bottom performers, and reward the first group to keep the momentum going, and work on the second group to encourage them to be more active. You can do that with training, sharing more materials, but also sometimes a simple text or a call check-in is enough to deal with whatever concern they had. 

Sticking to one-size-fits-all

Sometimes an E-commerce brand will roll out an affiliate program and it will be a single commission type across all product lines and for all affiliates, no exception. This can certainly work for some, but if you want to maximize your growth and make yourself as attractive to affiliates as possible, you’ll need to tailor the reward system to the different types of partners, campaigns, and products. 

Tip: Consider doing a generous commission that is a bit over the industry’s standard. This little add-on will not influence your budget as much as it will benefit you. These days, affiliates have lots of offers from many E-commerce sites, and winning them over is not easy. Showing them that you’re not only trying to make as much money as possible but also looking out for them will boost your chances of recruiting the best partners. 

Not communicating with your affiliates after you’ve recruited them 

Your job is not finished when the affiliate has registered in your program and received an affiliate link and a code. In fact, it’s only the beginning.

Due to different reasons, some E-commerce brands pretty much ignore their partners, once they’re already signed up. This can hinder the growth severely, as affiliates will feel lost and not cared for, which will make them more reluctant to focus on the company’s products.

To avoid (or fix) those situations, introduce a regular communication structure. Create a newsletter with key updates and useful tips. Send personalized messages to partners, as well as general notifications with key updates. Incentivize the existing partners with additional contests, such as beating their target for the past quarter for a bonus. Keep all your marketing materials updated for partners, so they can actually use them. 

Damaging the brand with the wrong partners

Not everyone is a good match for your affiliate program, and not everyone should be. 

One of the mistakes that many E-commerce companies make, especially at the beginning when they struggle to recruit enough affiliates, is letting just anyone promote them.

Sometimes it results in partners causing more damage than good. While it is kind of scary for the brand, there are ways to work with it. Design strict guidelines on brand messaging and specify what is not allowed. Don’t forget to add this to your T&Cs. 

Introduce pre-approvals to control who goes in. Keep track of the affiliate’s performance and look into any abnormalities right away to minimize potential damage.  

About author:

Ksenia Mironiuk, Content Manager at Tapfiliate 

Ksenia is a Content Manager at Tapfiliate with experience in FinTech, MedTech, MarTech and custom software development. In her spare time, Ksenia enjoys reading contemporary fiction, going on longer runs, and spending time with her dog.