Affiliate Marketing for Retailers:
How to Boost Revenue and Increase Customers
As retail continues to evolve amidst a challenging and competitive landscape, more and more merchants are looking for additional ways to increase revenue opportunities. Among them includes introducing affiliate programs into their strategic marketing efforts.
For retailers, affiliate programs tap into a network of businesses that they align with as partners to promote products to their customers via URL links. These links direct customers to external sites away from the retailer’s own website or social media feeds and are tracked using a specific URL. This tracking is what rewards retailers with a commission for sales made via the URL links and often even rewards retailers without a sale ever being made. Sometimes, simply clicking to an affiliate site triggers a percentage being paid out to the merchant.
In addition to participating in affiliate partnerships to gain additional revenue, retailers can introduce affiliate marketing to external brands to help drive online traffic to their own website. When leveraging both sides of the affiliate equation, they increase their potential of dollars in addition to customer visibility. The catch? You want to be picky about who you partner with. The key is to identify partners that are like-minded yet non-competitive to your business, therefore increasing the chance of like-minded customers as well.
How to Build an Affiliate Program
When aiming to build an affiliate program for your store, begin by identifying the following.
- Where do you plan to share your affiliate links? This may include a branded website, via email marketing and social media.
- What companies do you want to partner with and how do you plan to identify them? Affiliate marketing companies such as ShareASale and FlexOffers can help align you with like-minded companies to partner with.
- What, where or who influences your customers to make purchase decisions? Once identified, how can you align your own affiliate links with these sources?
The next step you will need to make is identifying how you will set your commission structure. For your own business, you need to identify a fair commission that incentivizes partners to want to promote your store or the products you are selling. Additionally, be sure to identify how you will pay per sale but also per lead, per click, or any mix of the three. If you want to simplify these efforts to start, paying per sale can be a solo offering and still very rewarding to your partners. As for a percentage to consider, commissions range from 2% to even 15%. You will want to factor in the cost of the item or total sale, then consider that in your pay structure as well. Likewise, review these details for potential partners you are considering promoting. The fine print details of when you get paid are important to review also.
Historic retail welcomed one avenue for customers to make a purchase in physical stores. Omnichannel efforts introduced merchants to multiple selling avenues thanks to digital platforms, phone-in orders, catalogs and more. And now, affiliate programs extend a whole new sales avenue that can help complement existing efforts to connect with customers. They can be a huge boost to retailers looking to increase revenue, particularly when nurtured daily and considered a top priority in marketing efforts. Gaining sales can be the reward, but increased customer exposure is another return to look forward to. Collectively, it’s a win-win scenario that may be right for your unique retail business.