The increasing expense of digital advertising—paired with the increasing sway held by influencers—is giving new life to affiliate marketing. But how can you tap into this opportunity?
This beginner’s guide will walk you through how to start your own affiliate marketing program, including choosing which products to promote, setting commissions, and recruiting affiliate partners.
What is an affiliate marketing program?
An affiliate marketing program is a reward-based system in which partners promote your products in exchange for a commission or other compensation. A customer, product advocate, or industry marketer can sign up for your affiliate program (as can a content creator, influencer, or blogger) and send visitors to your online store through special referral links also known as affiliate links. Any sales made as a result of their promotion earns the affiliate marketer a reward.
How do affiliate programs work?
An affiliate program typically pays via a flat dollar amount or a percentage of the total sale, but incentives could also be free or discounted products. For example, Target gives affiliates up to 8% commission on every qualifying purchase made through an affiliate link.
Affiliate marketing strategies are used both in business-to-consumer (B2C) and business-to-business (B2B) campaigns. Data from IAB UK also shows that the two biggest sectors for affiliate operations are retail and travel.
Affiliate marketing is a cost-effective strategy for advertisers because programs drive brand awareness via partners, and you only pay commissions on completed sales. Contrast this with traditional types of marketing like TV ads and radio ads, or influencer marketing, where you pay for promotion before seeing any results.
Affiliate programs are also a tried-and-true way for publishers—including bloggers, social media influencers, and review sites—to make money online. It’s a win-win for both parties.
What’s the purpose of an affiliate program?
Marketers surveyed by IAB UK agreed that affiliate marketing performs very highly for customer acquisition and return on investment (ROI) compared to other activities, ranking 7.83 and 7.6 out of 10, respectively.
And there’s real-world evidence that affiliate marketing is effective: Wirecutter, a consumer site owned by The New York Times, runs exclusively on affiliate commissions and subscriptions. Wirecutter’s affiliate income experienced a 20% revenue increase in Q4 2022, according to a Times release.
Brands and retailers like Healthish use affiliate marketing campaigns to build brand awareness, launch products, and generate sales. For example, when launching its keystone product, the WB-1 bottle, Healthish worked with Instagram influencers to create content and sell the bottle at scale.
💡 Learn more: The Pre-Launch Strategies of a Million-Dollar Brand
Is affiliate marketing right for your business?
Affiliate marketing isn’t right for every business. If you have small profit margins, for example, it may not make sense: It would be difficult for a business owner to pay affiliates and also turn a profit.
Affiliate programs need to pay a portion of each sale in order for it to be worth the promoter’s effort and money, depending on their approach to promoting your products. One of the best ways to find out if an affiliate program is a good fit for your business is checking to see if other companies in your industry have created them as part of their business strategy.
For instance, BarkBox has been running a successful affiliate program for nearly 10 years.
A program with that kind of longevity implies it’s working and is producing solid returns on time invested for BarkBox. If you dig through popular dog accounts on Instagram, many will have a BarkBox affiliate link or code in their bio.
How can you see if other businesses in your niche have successfully learned how to create an affiliate program? A simple Google search targeting competitors can dig up online brands that have affiliate referral programs of their own. Your keyword searches could be:
- “(your competitor) affiliates”
- “(your competitor) affiliate program”
- “(your competitor) affiliate marketing”
You can also look at relevant hashtags on social media. A search for hashtags related to your industry or competitors will reveal influential users. You can check out their profiles to see if they’re promoting your competitors via affiliate marketing.
After determining this is a route you’d like to explore, the next step is to look at how to create an affiliate program for your online store.
How to start an affiliate program in 5 steps
- Choose the right products and promotions
- Determine your affiliate pricing and commission
- Choose an affiliate management app
- Recruit your affiliates
- Manage affiliates
Learning how to start an affiliate program involves assessing the types of products you plan to sell and to whom, as well as determining how to structure the program to meet both your business needs and that of your affiliates.
1. Choose the right products and promotions
Choosing high average order value (AOV) products helps your partners earn more affiliate revenue—which makes your program worth their while. A 10% commission on a $80 product is more attractive than a 10% commission on a $5 product.
Advise affiliates which products to advertise, and consider offering their audiences additional promotion, such as:
- Free shipping on orders over $50. Nine out of 10 shoppers say free shipping is the number one incentive to shop more online.
- A first-time buyer discount. Give new customers an extra discount for their first purchase. You can then remarket to them through email and Facebook ads.
- Buy more, save more discounts. Offer a scaled discount sale to increase average order value. For example, save 20% when you spend $50, or 25% when you spend $100.
Offering affiliates valuable products and promotions can help them sell more, which in turn, can lead to more sales for your business. You can always add or remove products from your affiliate program and tweak your brand messaging if your strategy isn’t working.
2. Determine your affiliate pricing and commission
Once you’ve chosen the products for your affiliates to promote, it’s time to decide on a commission package. While some ecommerce brands offer free products or credit, a pricing strategy that rewards cash may be the most appealing to experienced affiliates.
The next step is setting the rate. There are two popular options:
- Percentage commissions. A percentage of each affiliate sale.
- Flat-rate commissions. A set dollar amount for each sale.
According to ReferralRock, the most common is percentage commissions in affiliate programs, with the average commission being between 5% and 30%.
Shopify Expert HeyCarson breaks common affiliate commissions down by category, with commissions ranging from 10% to 40% of sales.
Some popular product categories and their associated affiliate rates are:
- Beauty: 15%
- Clothing 10%–15%
- Food and Drink: 10%–20%
- Health 20%–30%
- Pets 10%–20%
- Computers and tech: 15%–20%
💡 See the full list:Are Your Affiliate Commissions Competitive?
Still, commissions vary by affiliate program. For example, the typical Amazon commission income rate ranges between 1% and 20%, depending on what products you’re promoting.
Start by choosing a rate by category. You can always raise—or lower—your rates if you discover it’s not a good fit for your business. Or, create different offers using multiple commission types.
3. Choose an affiliate management app
Shopify’s partners and app developers make the technical underpinnings of your affiliate marketing efforts easy. Start by choosing and installing the best affiliate app from the Shopify App Store to fit your needs.
Expect each app to take you through an onboarding process that will get you up and running with an affiliate program catered to your online business. Affiliate apps in the Shopify App Store are designed to integrate seamlessly with your online store.
A few examples of affiliate marketing apps include:
Refersion
Refersion is an affiliate platform with nearly 1,000 reviews and a 4.7-star rating. It offers a fully loaded affiliate and influencer marketing platform to help you launch a program within minutes.
The platform includes tools to recruit, track, and pay affiliates. Refersion customers also get access to a database of 3.6 million affiliates and publishers as potential partners.
Features include:
- Quick start up
- Easy to find new affiliates and influencers
- Quickly sign up affiliates on your registration page
- Affiliate dashboards to track performance
- Coupon code tracking
- Product level commissions
Refersion has the capability to scale with your business. Start out with a free trial of its Professional plan, and as you see the need to expand your affiliate offerings, upgrade to a Business or Enterprise plan.
LeadDyno
LeadDyno is an affiliate marketing plug-in that enables affiliate management, customization of commissions, and reporting and analytics of leads and customers for transparency of your sales funnel.
It processed over $161 million in affiliate sales in 2022 and offers customer support through live chat, email, and video. You can easily track orders from affiliate links and coupons, and access tools to engage, reward, and pay affiliates.
LeadDyno seamlessly integrates with your Shopify store and more than 25 other platforms with just a few clicks. Pay your affiliates manually or automatically. One-click approval is possible using PayPal or even Coinbase.
Features include:
- Simplified affiliate management tools
- Personalized dashboards for each affiliate
- Digital marketing tools to engage affiliates and grow your program
- Automated outreach programs
- Ability to create affiliate groups, commission tiers, and more
- Robust tracking system without third-party cookies
- Flexible customer support options
Start using LeadDyno with a 30-day free trial. The Starter plan begins at $49 per month.
UpPromote
UpPromote is a top-rated affiliate marketing app in the Shopify App Store, and has more than 2,800 reviews. UpPromote is an automated, all-in-one influencer and affiliate marketing solution where you can easily build a professional affiliate campaign.
You can manage your affiliate program in just a few clicks. Automate program processes, track affiliate links and coupons, customize registration forms, and set up payments and rewards tailored to each affiliate. It also offers tools to convert customers into affiliates and a robust tracking system to keep track of clicks and conversion rates.
Features include:
- UpPromote Marketplace, where you can find potential ambassadors and influencers
- Reliable tracking process with various click tracking methods
- Customizable management platform to match your brand
- Dedicated support team ready to assist you
- Ability to sync affiliate contacts with Shopify customers
- Advanced offer options to attract more affiliates
UpPromote offers a 14-day free trial, plus a free plan with unlimited affiliates. Paid plans start at $29.99 per month.
💡 Learn more:The Best Affiliate Marketing Software to Track, Manage, and Invite Affiliates
4. Recruit your affiliates
A successful affiliate marketing strategy hinges on recruitment—finding the right kind of affiliates to join your program.
Some affiliate programs, like the one used by streaming platform Twitch, only accept applicants fulfilling certain criteria (such as a minimum number of followers or level of platform activity).
But not all brands have such requirements. Other ways to attract affiliates to join your program and promote digital and physical products include:
Social media
Announce your affiliate program on your social media marketing channels. By doing so, you can organically reach your audience, which has the potential to be affiliate partners.
Email marketing
If you have an email list, leverage email marketing to attract affiliates. Requests over email have among the greatest impact on affiliate engagement compared to all other channels. Tell your subscribers about the affiliate program and encourage them to apply and help spread the word to others who may be interested.
If you have specific affiliates you want to reach out to, send them a personal email. Use the following outreach template to make contact:
Hi [affiliate name],
I am with [your company], and we’re interested in working with you on a marketing campaign. The campaign would be centered around [describe what the campaign will look like and what the affiliate would do], and we think you would be a perfect fit.
We’re targeting a kick-off date of [target date] for the campaign, and I wanted to see if this opportunity is something you would be interested in. Our commission rate is between [your rate range]. I would love to discuss this in greater detail and answer any questions you may have.
Thank you,
[your full name]
[your phone number]
[your company with link to your website]
Your website
People visiting your website are likely already familiar with your brand—making them potential candidates for your affiliate program. Plus, your site is an ideal place for affiliate marketers to learn more details about your new program.
Best practices for promoting your affiliate program on your website include:
- Make it easy to find. Promote your affiliate program in an easily accessible link, like in your website footer.
- Build a landing page. Create a page dedicated to the program and highlighting the benefits of joining.
- Create a signup form. Use Shopify Forms to create a form that lives on your website, or, like Katari Beauty, direct interested affiliate to a form hosted offsite.
- Focus on content. Fill your website with high-quality content so that when affiliates are looking for partnerships, they know you’re a legitimate company to work with.
Remember, after an affiliate joins your program, it’s their job to promote your products. But it’s your job to promote your program. Include information that potential promoters may want to know, such as the niche, product or service relevancy to the marketplace, and affiliate network or sales tracking platform.
Also, make compelling offers like tiered commissions based on sales, bonus incentives, and easy onboarding with affiliate support during the application process.
Affiliate networks
Join an affiliate network like ShareASale or Rakuten Advertising. These networks give you access to millions of established affiliates for your program. These networks typically have low-barriers to entry for entrepreneurs and small businesses, and can help you easily build an affiliate marketing program through a broad reach and diverse database of brands. Plus, they often offer training resources to become an affiliate marketing pro in no time.
Retailers like Blume use ShareASale (alongside other networks) to promote their programs online.
Blume’s ShareASale listing is simple and concise. It tells potential affiliates a bit about the brand and its products, the program benefits (like up to a 30% commission rate), and contact information about how to get involved.
Shopify Collabs
Shopify Collabs makes it easy to find influencers to promote your products. Install the Shopify Collabs app today to partner with creators, promote your products, reach new customers, grow your sales, and track affiliate campaign performance—all from Shopify admin.
💡 Learn more:12 Best Marketing Strategies Any Small Business Can Execute
5. Manage affiliates
When you have a collective of affiliates, you’ll want to keep tabs on their performance as part of your program. Regular communication is essential to establishing a strong relationship with each affiliate participating in your program.
Make sure your affiliates know the rules of your program and are familiar with your brand. Creating a library or knowledge base of content that they can use, including tutorials, webinars, graphics, pre-written social posts and templates, and a list of approved (or even mandatory) hashtags will help keep your affiliates aligned with your business goals and marketing strategy for your affiliate program.
Assess the effectiveness of your program by identifying your top-performing affiliate marketers. If they were among your most frequent shoppers, incorporate that into your affiliate marketing strategy and reach out to more customers about joining the program.
Some metrics to pay extra attention to during this program assessment are:
- Total affiliate sales
- Sales per affiliate
- Average order size (especially compared to sales not attributed to affiliate marketing)
- Total payout
- Payout-to-sales ratios
- Gross margin
- Total number of affiliates
- Number of new affiliates
- Number of affiliates who’ve left the program
💡Tip: Affiliate software usually offers tools to manage affiliate partners. Factor analytics into your decision to choose an affiliate network or app.
Ready to start an affiliate marketing program?
Now that you have the tools to start an affiliate program and create an affiliate program for your Shopify store, you’re ready to get started! Head over to the Shopify App Store and find a solid app to build a creative, professional program today. It’s quick and easy, and many apps offer a free trial.
Affiliate program FAQ
How can I create an affiliate program?
You can create an affiliate marketing program by following these steps:
- Choose high average order value (AOV) products to promote.
- Decide your affiliate pricing and commission.
- Choose an affiliate management app.
- Recruit your affiliates.
- Manage affiliates.
What’s the difference between a referral and an affiliate?
Referral marketing involves rewarding customers when they invite friends and family to try your product or service. Affiliate marketing refers to third-party brand ambassadors who send customers to your business for a fee.
