A friend of mine owns a coffee roaster with a dedicated internet shop for coffees and teas. I swear it has the best beans in town and I love its product so much that I wear a custom hoodie with my logo every time I go out. Seriously, I never miss a chance to recommend their coffee to my other friends. And I’m sure I’m not the only one who would be happy to spread the word.
The day I started working at Tapfiliate, I asked him if he did affiliate marketing for his small retail store and if he would like to be part of my survey of small retail business owners who have not yet used our tool.
I’m surprised to hear that you haven’t used affiliate marketing as a channel yet. Why? Why? For a retail business, as paid advertising isn’t as obvious as social media or SEO. There is so much on you as a small business owner and everyone is trying to sell you off with SMM, Google Ads, accounting and even electrical service! Most of the time, you don’t have time to research the less obvious things.
That’s why I decided to put this article together. And as simple as it may seem to online gurus, I hope it helps other small business owners like my friend understand the value and costs of affiliate marketing and how to get started.
What is affiliate marketing?
In a nutshell, affiliate marketing is marketing your business or product through recommendations, reviews, and other word-of-mouth marketing. Unlike traditional reviews on Google, Facebook or Yelp, these recommendations are trackable. And someone said that when someone comes to your website, for example, through a review from Mom B and makes a purchase, Mom B gets a commission. That’s why people who make such referrals have an affiliation with your business and are called affiliates.
Therefore, you should view a retail affiliate program as a relationship between three parties: the retail business, the consumer, and the affiliate.
Now, if all goes well between you and your affiliates, they will continue to share their referrals and they will be rewarded, their target audience will be your new customers, and your retail store will receive consumer reviews that are genuine, positive and without any financial risk. on your side.
How can we do this technically?
This is done through a unique web link (affiliate link) that your affiliate shares with their contacts or audience. As soon as someone clicks on the link, affiliate software (like Tapfiliate) realizes that person came on the recommendation of Anne B. As soon as that person makes a purchase, the affiliate software credits Anne B with helping with that sale (even if the purchase is after a few days or weeks).
In affiliate marketing terms, you are now an advertiser: someone who has a product and is looking for more sales. Anne B is an affiliate or publisher: someone who posts information about your retail business or consumer products and receives a commission for inbound sales through their referrals.
In other words, an advertiser (you) pays a commission to a publisher (Mother B), which helps generate more consumer sales.
Is your affiliate marketing program a viable new channel for your business?
Definitely! It is easy to set up, low risk and has great potential to market your business. It can be more effective than other channels with the average order value for affiliate sales being 21% higher than other marketing channels.
Also, affiliate promotions use more beneficial and often more powerful native methods than traditional advertising. As a side effect, your business benefits from unique content such as blog posts, reviews and testimonials, social media posts, videos, infographics or word of mouth advice.
How much is it costing you?
Affiliate marketing is a low-risk marketing channel: you only pay a commission when there is a sale (unless you choose otherwise). Of course, you can choose to pay for a lead regardless of whether they buy it or not (and we at Tapfiliate as an affiliate agent offer our clients such an opportunity). But this is not very common.
So, if you run a specialty store that sells coffee for an average price of $10 per pack, your monthly affiliate program’s cost breakdown would look like this. If you have at least 8 affiliate sales per month you will get positive ROI and with 18 sales per month you will get 2x your investment:
As you can see, I included the cost of the affiliate software in this calculation. Now I will explain what it is and why you need it.
What is affiliate management software?
It’s pretty simple: To give your affiliate credit for a sale, you need to know that they’re the one driving it. This is the basic thing an affiliate tracking tool does.
To get started, affiliate management software lets you:
- Create a unique web link for each affiliate
- Follow referrals from this affiliate
- Set the commissions you pay per referral
- Pay your affiliates
These are the most basic features. As your affiliate program matures, you’ll find that you want to reward some of your affiliates more than others for bringing in more sales, or recommend customers who buy more (for example, large packs instead of smaller 500g packs), or increase their orders, saving you on delivery costs.
Things to look for in affiliate software include:
How easy is it to integrate the software into your website?
Without development skills, you’re probably looking for something easy to integrate. For example, if you run a Shopify store, the Tapfiliate integration takes 1 minute.
How reliable is it in tracking affiliate sales?
There are many reasons why affiliate sales can “disappear”, and it’s important that your affiliate software has technology that ensures you don’t miss out on sales so you don’t disappoint your affiliates. Tapfiliate invests in world-class tracking technology to ensure affiliates get credit for their sales.
There are a number of tools we encourage you to take a test drive before deciding which one you want to use to run your affiliate program. At Tapfiliate we offer a 14-day Free trial that you can start whenever you want.
How do you start?
Here is a quick checklist for starting an affiliate marketing program for your retail store:
1. Set goals for your affiliate program.
How many sales do you expect to break even through affiliates? How much profit do you ideally expect?
2. Decide on the right affiliate commission.
It’s up to you, but you usually want to check how much your competitors or other businesses similar to yours are paying their affiliates.
3. Decide how long your affiliates are eligible to earn commissions after someone clicks on their affiliate link.
4. Install your affiliate program software for:
Affiliate tracking links
Affiliate assets (things like banners, article attachments, citations, and other things affiliates can quickly reuse when sharing information about you)
This is usually easier than it sounds and takes between 30 minutes and 1-2 hours, depending on your digital skills. Tapfiliate offers a 14-day Free Trial so you can see how the software works with your installation. You can start here.
5. Start recruiting affiliates
Think about how you will invite your first partners. This blog post we made a while ago gives a wealth of ideas on how to find partners for your business.
6. Optimize your affiliate program
Once your affiliate program is launched, you can find it productive from day 1. Often times, some fine-tuning may be required. You may need to experiment with affiliate assets (e.g. try different graphics, calls to action, and product descriptions). Or you may need to offer a higher commission or a recurring commission to motivate your affiliates. We’ve got you covered: this article will guide you through performing a health check and improving the efficiency of your affiliate program.
Ready to go?
We hope you now understand that an affiliate program for a retail or specialty store can be a viable, low-risk source of new customers. To give you more confidence, here’s another trick: affiliate marketing generates 3x more leads than traditional advertising. This applies to e-commerce and retail store affiliate marketing programs, and justifies the effort it took to build your program.
Good luck with your new marketing channel! Let us know if you decide to take Tapfiliate for a 14-day free trial and you need help with setup. Tapfiliate’s customer support is the nicest affiliate marketing rockstars you’ll ever meet.