Affiliate marketing is a $17 billion industry. 31 percent of publishers say that affiliate marketing is a top revenue source for them, and 20 percent of influencers say that affiliate marketing is their most successful method of making income.
But what is it exactly, and why should you care? Affiliate marketing is a performance-based marketing strategy where businesses reward “affiliates” for driving traffic or sales to their website through the affiliate’s marketing efforts.
Unless you’re truly off the grid, you’ve seen affiliate marketing working in real time. Here are some examples of articles that have that familiar disclaimer: “When you buy something through our retail links, we may earn an affiliate commission” -:
• Bon Appetit, “You don’t have to be a Serious Wine Drinker to Appreciate this Chic Decanter”
• Real Simple, “The 50 Best Cheap Christmas Gifts of 2023”
• Better Homes & Gardens, “Hurry: The Shipping Cutoff for Mother’s Day is Approaching – Here are 25 Gifts You Can Still Give”
In these examples, if a reader clicks through one of the hyperlinks and purchases the product, the media outlet receives a commission, typically ranging from 5-20%.
Influencers will often share a unique-to-them promo code for a brand’s online sales, e.g. SUMMER20, which gives 20% off to the shopper, and a financial kickback from the brand to the influencer. Influencers can become “affiliates” for everything and anything, like clothing.
Want to get in on the action? Below we share the benefits, our preferred affiliate marketing platform, and potential costs of setting up an affiliate marketing platform.
Benefits for Small Businesses
Affiliate marketing can have immense benefits for small businesses, including:
- Expanded Reach: Small businesses can tap into the audiences of affiliates, expanding their reach way beyond their immediate network.
- Cost-Effective: Affiliate marketing is performance-based, meaning businesses only pay for actual sales or conversions.
- Low lift: Setting up and maintaining an affiliate marketing platform is relatively quick and easy, and maintenance is minimal.
For our clients with an e-commerce platform (e.g. they sell online), affiliate marketing is often the most successful when it comes to getting coverage in gift listicles, such as Christmas and Valentine’s Day gift guides. Affiliate marketing works particularly well for gift guides because people are often ready to make a purchase for that upcoming event.
Media outlets are suffering from ever-decreasing ad revenue and fewer and fewer subscribers. If you’re interested in learning more about the affiliate partnership benefits for media outlets, we like this deep dive. As a result, many media outlets are leaning towards e-commerce driven articles (such as the three in the bullet points above). If you don’t have an affiliate program, you’ll likely be left out of these types of articles. Your spot will likely be given to a brand that can make money for the outlet. (Of course, there are still plenty of stories and outlets that don’t use affiliate links.)
Choosing an Affiliate Marketing Platform
From our experience, ShareASale is the most seamless and recommended platform for starting up an affiliate marketing program.
However, no matter which platform you use, whether it’s ShareASale or Rakuten or Shopify, you get to choose who you accept as your “affiliates,” aka the people trying to sell your product. People can’t automatically start selling your brand on their behalf without your permission! Influencers and writers can also browse brands on ShareASale to see who they would want to partner with.
The Possible Costs Behind Affiliate Marketing
What will this cost you? With ShareASale, there is:
- A one-time set-up fee
- A monthly fee to use ShareASale’s platform and access its network of affiliates
- Transaction Fees: Merchants may be charged a percentage of each sale or a flat fee per transaction as a commission for using ShareASale’s services
In addition to this 30,000-foot debrief of affiliate marketing, there are countless courses that can go as deep or as surface-level as you’d like. For an approachable deeper dive, we recommend this one from one of our favorite journalists, Kelsey Ogeltree.
Affiliate marketing can be a powerful strategy for small businesses to increase sales and reach a wider audience. If you’re interested in setting up an affiliate marketing program and getting the word out about it (and now is the perfect time to figure out how to make the most of Mother’s and Father’s Day gift guides!), ROOT would love to chat with you – say hi via our Contact page here.
