Should you launch an affiliate marketing program?
So you don’t have an affiliate marketing program, but are thinking about starting one. How do you know if affiliate marketing is right for you?
Let’s answer the following questions:
- Do you have a website that generates sales or leads?
- Can a consumer purchase products or make a request for more information directly on your website?
- Are you looking to drive more sales or leads?
If you can answer YES to these questions, then affiliate marketing might be the right path for you!
Why affiliate marketing?
Why Affiliate? According to eMarketer, 46% of marketers consider affiliate marketing to be “very cost effective” as it relates to customer acquisition, second only to email.
Can an affiliate program be profitable?
Yes! Most affiliate programs follow a commission based or pay for performance model. You can also pay a flat commission or bonus amount per lead or action. Typically, commissions are a fixed rate across all publishers in the program. Some advertisers offer commission rates in tiers. Once publishers reach certain revenue or sales thresholds, they can begin to earn a higher commission rate. This gives you full control over how much is being spent, especially where margins are concerned. For larger advertisers with an extensive product listing and different margins on different product categories, you may even be able to pay on a product tier system where you’re paying different commissions on different products depending on that margin.
How much is it going to cost me?
One of the more desirable advantages of having an affiliate program is the fact that it requires little upfront investment. If you want to start an affiliate program, all you need is a website that drives traffic and products to promote and sell. There is usually a technical setup fee to launch on an affiliate platform and monthly management fees to the agency that runs your campaign for you.
Bottom line is that, unlike other channels, you only spend money when you make money. This becomes important to smaller businesses who have limited resources or lower advertising budgets. Affiliate marketing can be a good fit for businesses of all shapes and sizes!
So what are the risks?
An affiliate marketing program comes with little overall risk. Once the initial setup investment is incurred, your program becomes entirely based on pay for performance, meaning that you’re only paying for incremental sales and you have control over the commissions that you’re paying to publishers. What’s also attractive about affiliate marketing is the potential to earn revenue 24/7. In this channel your income is not restricted by time; you can be earning money even while you’re asleep!