How to Create a Successful Affiliate Program for Your Business

as you build your business you of course need to attract more customers in order to grow i mean that's why you're hustling with sales marketing relationship building and creating content for social media but what you might not be doing is letting other people bring new customers to your store for you and in this video i'll peel back the curtain on how to do just that welcome to learn with shopify where we arm you with the tools and knowledge to start build and grow your own business in this video i'm really excited to share the ins and outs of affiliate marketing one of the most effective ways for you to have an entire sales and marketing team of real people driving traffic to your online store without the upfront costs and complexities of hiring employees if you clicked on this video you probably have an idea of what affiliate marketing is but to summarize it as succinctly as i can affiliate marketing is an incentive structure that encourages people usually social media influencers content creators and website owners to recommend you to their audience in exchange for earning a percentage of any actual sales they bring into you in other words they don't make money until they help you make a lot more money first this means that affiliate marketing is based on reciprocating incentive i mean you want people to promote your business and products for you and those people want to earn extra money by making a percentage of the sales that they generate in practice you provide a way for folks to sign up to receive a special link that's tied to them they share that link so when their audience clicks on it and makes a purchase on your website the sale is recorded for both you and them in a dashboard so that everyone knows the results and commissions are automatically paid periodically it's really win-win in the best sense possible because on the affiliate side it doesn't take a lot of work for people to sign up and share links and on your side once your affiliate program is set up you don't need to spend a lot of time to babysit it and best of all you don't pay your affiliates a penny up front you only pay them when they deliver you sales but because affiliate marketing is commission based the very first thing you'll need to do is to ensure your pricing and more importantly your profit margins are big enough that you'll remain profitable after commissions are paid there's a concept called the double keystone that you can use to evaluate your pricing double keystoning means that as an absolute minimum the sticker price of each of your products doubles at every stage between manufacturing and the end customer receiving it now this can just be doubling once if for example you're making the products at your dining room table and selling direct to consumer on your website so if it costs you ten dollars to make one product the double keystone rule means that you need to sell each one for at least twenty dollars and that is a bare minimum but let's say you found a manufacturing partner to make your products for you and not only do you want to sell direct to consumer you also want to wholesale to other stores so that they can sell for you as well if it costs your manufacturing partner five dollars to make it they'll at least double that and charge you ten dollars for each then you at least double what you pay to sell wholesale to other stores charging them at least twenty dollars each and they in turn at least double that and sell for at least forty dollars to their customers who buy from their store as a side bonus this means you quadruple your costs when folks buy directly from you sweet this means that when you list the product on your own website you'll need to list it at at least 40 as well so you're not undercutting your wholesale clients by observing the double keystone rule as an absolute minimum you ensure that your margins are high enough to be able to support an affiliate marketing program now that you've priced your products in a way that can support an affiliate marketing program let's get into the good stuff how to actually create a successful affiliate program since the incentive for your future army of affiliates is to earn money the first step is to ensure you can create the conditions to make it attractive for them to do so put yourself in their shoes what they want is to earn more so it stands to reason that you want to start structuring your program to feature the highest earning products for them to promote since if the value of what they promote is high their commissions in turn will be high as well your store may have a hundred different products ranging between five dollars and five hundred dollars if we use an example of a ten percent commission which would be more attractive to your future affiliates to earn fifty cents per sale on a five dollar item or fifty dollars on a 500 item of course you can absolutely enable affiliates to earn their commission on everything in your store but this first step is about making a program that will be attractive for folks to want to sign up to be one of your affiliates digging into some psychology here us as humans are easily paralyzed by choice we want things to be frictionless so in the context of creating an affiliate program we want to be able to quickly and effectively communicate the potential of being one of our affiliates so this first step is about creating the program making it jump out at potential affiliates and creating the communication materials so it's as easy as possible for them to sell for you i'm talking about being able to have a landing page that communicates things like hey you love our products earn up to fifty dollars for every sale you bring us best of all you can download our rapid start guide that includes gorgeous product shots and copy-pastable messaging including the ability to offer your audience a first-order discount and free shipping on orders over 100 the photos by the way in that download pack could all feature your higher ticket items so these affiliates are psychologically anchored to earning more you're also making their promotional workflow easier for them by creating copy pastable messaging finally with end customer incentives like free shipping and a first order discount you are increasing the likelihood that their audience will make an order thus earning both you and your affiliates money sooner so to summarize step one you are designing the bare bones of the program itself and the communications materials to be as compelling and as attractive for your future army of affiliates to want to sign up and more importantly want to actively continue to promote your products to their audience step two is all about building the actual commission structure and validating it with some math of course the higher the commission your future affiliates can earn the more likely they are to dedicate more focus to promoting you but you need to ensure the money makes sense let's say for example you're selling a jacket that costs you twenty dollars each to get from your manufacturer and you're selling it for one hundred dollars when it sells you technically have eighty dollars left over but you need to cover your overhead costs like renting your office the packaging the jacket will go into when you ship it your own salary and other expenses like your paid ads and your year-end accounting costs taxes all of that after your calculations you determine that all of those combined account for 40 dollars worth from each jacket sale so you have an additional 40 left over from that initial 100 sale you also determine that you want to keep another twenty dollars from each sale to bank and reinvest back into your business to help it grow which means you have twenty dollars left over to play with meaning from that one hundred dollar sale you can afford to allocate twenty dollars or in this case with such a convenient number 20 in things like discounts and affiliate commissions since you're already planning on offering first-time buyers at 10 discount that means at the end of the day you can offer your future affiliates a 10 commission and you'll still remain profitable i just want to be clear by the way that the phantom example i just gave is a very simplified version and should not be used as a baseline for you you're gonna have to crunch your own numbers but if you're interested in seeing a video that'll break down in extreme detail the considerations you need to make and how to calculate what your pricing should be in order to support your business let us know in the comments below but going right back on track a 10 commission is a great place to be in general compared with popular affiliate programs like the one from amazon offering commissions as low as just one percent the best option for you though is to search to see which of your competitors are already offering an affiliate program and seeing what percentage they're offering their affiliates so you can get a baseline idea of what you need to offer to be competitive and you can get really creative with your commission structuring for example creating a tiered system that rewards your future affiliates the more they bring in for example you may have the silver commission rate of five percent for brand new affiliates and once they refer five sales they get bumped up to the gold commission rate of 7 and once they bring in 20 sales they shoot up to the diamond commission rate of 10 regardless to summarize step 2 you're essentially doing the math to see the maximum percentage you can afford to offer your affiliates and then deciding on the commission's structure you'll offer them and remember the more you offer the more likely people will be to dedicate their energy to helping you promote your business step three is when you really put things together because you will be selecting your affiliate management platform the engine that lets your program run track maintain and make payments to your affiliates now we won't go through a detailed setup in this video since this is an overview of how to create a successful program and there are quite a few different platforms to choose from and their setup processes although slightly different are all intuitive to get up and running basically all of these management apps enable you to define your commission rates the products you wish to allow to earn commissions creatures sign up and approvals process for new affiliates upload and store images and write-ups affiliates can download to use to promote you create affiliate links to ensure they get credit for the sales they bring in and of course track results a few popular ones include up promote reversion and lead dyno but there are many more what you need to know is that they all do essentially the same thing some offer specific features at various tiers that are up to you to decide whether or not you need they all offer at the very least a free trial period if not a free tier to get started and depending on your needs and how many affiliates have signed up regardless shopify makes it exceedingly easy to create and manage an affiliate program because so many of these affiliate management companies have built robust apps to install into your shopify store we're about to talk about choosing an affiliate management company but if you are curious after watching this video i'll link the shopify app store below with all of the manager apps so you can truly get to see just how robust the integrations are in general once you actually start getting affiliates you can expect to pay between around 20 a month all the way up to hundreds a month but of course they'll scale in direct proportion to how well your affiliate program is performing in other words what you end up paying monthly is a drop in the bucket compared to what you are actually earning through the sales your affiliates bring in there's a fantastic article on the shopify blog that gives an in-depth comparison of seven of the most popular affiliate program management apps and i'll link it in the description below for you it's definitely worth checking out when you've made it here to step three of creating your own affiliate marketing program to help you make the best decision for you moving on to step four here is where things get exciting because now is the time for you to start actively recruiting your army of affiliates you want to begin by determining who you want to allow as an affiliate this might seem strange since as newer entrepreneurs we may think to ourselves the more the merrier let everyone join but you want the right people since the wrong people will at best yield you no result and just occupy a slot in your management app but at worst can cheapen or even damage your brand's reputation if for example they spam the internet or don't align with your brand's values some businesses choose to only allow those with social media clout to join their affiliate programs requiring a minimum follower or subscriber count on social media platforms other businesses only allow folks who have previously purchased their products and both love and truly understand their goods and values so their messaging will be more genuine and convincing ultimately it's up to you to decide but once you do there are five main ways to recruit affiliates the first way is through email i mean you may have built an email list from your existing customers or those who have signed up for updates and this is a great free and effective way to go about recruiting since everyone on your list has either bought from you or at the very least has shown enough interest in your brand to sign up for emails the second way is through social media if you have a facebook business page an instagram account a tick tock page a youtube channel or anything else where there are already eyes you can create an entire campaign of posts to share all the compelling reasons to join that you came up with all the way back in step one social media is free and similar to your email list consists of people who have chosen to follow you which means they are already interested in your products the third way is right on your store's website whether you have a banner a dedicated page linked in your navigation menu or footer or even better featured at the end of your checkout sequence so the moment people buy your products they are notified that they can earn money by sharing what they just bought with their friends the fourth way is through specialized affiliate network sites there are a bunch like share sale and rakuten marketing but essentially these sites are visited by people who are already doing affiliate marketing for one if not dozens of brands these sites enable you to post your affiliate program by product category so when for example a youtuber who is already an expert in affiliate marketing for your product category does their monthly visit to one of these affiliate network sites they will catch wind of your new program and hopefully the attractive program you created back in step one compels them to sign up finally there's active influencer recruitment this takes research and also will typically require that you send product samples at your own cost but can be tremendously powerful essentially you scour social media channels like youtube and instagram and find creators who have a large following that already feature products like the ones that you offer reach out offering to send them some free products in exchange for them reviewing or featuring them in their content and enable them to earn money through affiliate links that their viewers click on by using any or all five of these strategies you'll be well on your way to optimizing this fourth step of the journey recruiting qualified brand aligned and passionate people who will only earn money when they've enabled you to earn money first lastly step 5 of how to create a successful affiliate program is to track manage and optimize your program although you can technically set it and forget it to a certain degree the most successful affiliate programs continually assess the results they see which of their affiliates are bringing in the most sales and consistently tweak their programs to maximize reach and profits maybe you learn for some reason i don't know your affiliates who are women based in south america are consistently yielding significantly better results now imagine how much more you can bring in if you start creating affiliate attraction landing pages and sign up sequences in spanish or maybe you realize that for some reason your affiliate generated income spikes in the winter imagine how many more sales get generated if you offer a small free gift with purchase between november and january managing your affiliates and affiliate program can also be tremendously powerful when you launch new products by offering an additional commission bonus on specific products for a limited time period you will be incentivizing your army of affiliates to promote the heck out of your new product launch to really build up some hype and by the way if you're still in the research phase of building your business now is the best time to dip your toes in and i welcome you to sign up for your 100 free no strings attached trial to shopify where you can see firsthand how easy it is to not only sell but even install a few of these affiliate management program apps with their free trials so that you can really experience the ins and outs you can access your free trial by clicking the link in the description below there you have it you now have the entire bird's eye view of how to create a successful affiliate program that'll amplify sales and have real people across the world championing your brand and generating growth for your online store i think shopify has definitely helped us and many businesses get started and there's nothing like hearing that cha-ching when you're out living your life and doing something that you love i like that if you want to see deep dive videos of any of the steps that we discussed here let us know in the comments and hey if you got some value from this video be sure to hit that like button and if you got lots of value consider subscribing and hitting that bell so that you'll be notified the moment new videos just like this one come out right here on learn with shopify thanks so much for hanging out with me and i'll catch you in the next one [Music]

Channel: Learn With Shopify

Views: 129,576

Keywords: learn with shopify, ecommerce tutorials, shopify store, ecommerce business, online business, product market fit, online business from home, ecommerce business explained, online business 2022, instagram, tutorial, tutorial for beginners, how to make money on shopify, shopify tutorial, business tutorials, how to make money online, e commerce, shopify tutorial for beginners, affiliate marketing, affiliate marketing 2022, affiliate marketing course, marketing, marketing strategies

Id: x0VKAZWUNZg

Length: 18min 0sec (1080 seconds)

Published: Thu Jun 30 2022