Is an affiliate programme worthwhile for my business?

Affiliate programmes sometimes get a bad rap– many platforms and partners can be less than transparent, and any affiliate programme requires a fair amount of maintenance and tracking if you want to be sure that it is functioning properly and you are getting the most out of it. However, a good affiliate programme can bring great benefits to your business if you sell products or services that are well-suited to this channel. We’ve created an affiliate programme checklist to help you evaluate if affiliates are a good channel for your business, take a look!

The basic idea of affiliate marketing is that as a business, you are letting other websites sell your products or services for you, and paying them a commission for these sales. An affiliate receives a URL with a parametre in it that “tells” you that the sale is attributed to their site if a purchase Sounds easy, right? Here are the basic affiliate checklist considerations to keep in mind if you are considering setting up an affiliate programme:

  1. Look at your margin – If your products leave you with a 3% margin, affiliate marketing is probably not for you. You’ll need to figure out how much you can pay affiliates for each sale; this amount is generally a percentage of the sale value, so you will want to be sure that the commissions are not cutting into your profits too much. The higher the percentage of the sale you offer an affiliate, the more likely they are going to want to participate in your programme and really push your products for sale. If you are only willing to pay them 2% of sales value on a 50 Euro product, they are less likely to want to work with you than say if you offer 10%.
  2. Costs can be higher than you suspect – The easiest way to set up an affiliate programme is to participate in an affiliate network. These platforms will also take a cut of your sales, this is how they survive and earn a living! An affiliate platform is much easier to use than working individually with a bunch of different websites and affiliates typically are more trusting of the tracking tools and sales attribution offered by these platforms than if you on your own offer a deal, but you will need to be prepared to pay an upfront fee for setup as well as a small percentage of sales on a monthly basis.
  3. Do you have time to do some research? As stated, the easiest course is to work with an affiliate platform. Well known platforms include CJ Affiliate, Rakuten, TradeDoubler, ShareASale or Amazon over large reach, whilst it is also worthwhile to spend some time search for niche programmes– there are specialised providers who work in the beauty, automotive, gaming, travel, dating, or fashion spaces to name just a few. There are also specific affiliate tools targeted towards Spotify and other online shopping site platforms. Take some time to explore before you take the plunge.
  4. Determine your business volume and how much you depend of your affiliate programme – if you run a very large eCommerce site with thousands of products with many sales you may need to consider hiring someone to run your affiliate programme for you. If you start to earn significant revenue from your existing programme, but find that it is taking too much time to negotiate with individual affiliates, review and reconcile monthly sales attributions, or create customised affiliate vouchers and offers, you will want to consider getting outside help. Think about if you can afford this, and if it makes sense for you. Any affiliate programme must be well cared for if it is going to continue to grow and be successful!

These are just a few points to consider if you are thinking about getting started in affiliate marketing in order to increase online sales. If you’d like to learn more, feel free to contact us.

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Managing Director

Andreas is Managing Director at All Around. He worked for years in leading roles and international projects at WPP and Publicis Group agencies. He now leads a multi-disciplinary team of marketing consultants from different disciplines, backgrounds and countries who have joined forces to deliver international digital strategies and measurable results for our clients.