How Affiliate Marketing Transforms Your Ecommerce Business

Anyone that has even the slightest knowledge about ecommerce will definitely testify to one fact. Amazon is the single largest ecommerce or online retail website in the world. Of course, there are several reasons why Amazon ranks as the topmost ecommerce business in the world. 

Affiliate Marketing & Amazon Example

However, affiliate marketing ranks among the biggest reasons for the astounding success of Amazon. Amazon runs 12 different affiliate marketing programs. 

According to various sources, affiliate marketing accounts for nearly a billion visits to different Amazon websites around the world, including its flagship, Amazon.com. 

Now, that’s quite a considerable figure by any means, if we also consider the fact that nearly 25 percent of all sales on Amazon occurs through affiliate marketing.

In fact, Amazon runs the most successful affiliate marketing program in the world, though it has cut affiliate commissions at least twice over the last couple of years.

That’s the main reason I’m citing the example of Amazon to highlight how affiliate marketing can transform any ecommerce business. And it can work wonders for your ecommerce business too.

Understanding Affiliate Marketing

To know how affiliate marketing can transform your ecommerce business, we first need to understand what it’s all about. Therefore, I’ll briefly explain some of the main features of affiliate marketing.

In simple words, affiliate marketing is getting other people either within your locality or country or even abroad, to sell your products through their websites. These websites can be owned by companies or individuals including bloggers. 

Nowadays, affiliate marketing to some extent can also be done through YouTube, Instagram, Pinterest, and LinkedIn among other online platforms.

You can approach top affiliate marketers for that, they post content that promotes your business, brand, products, and services through content on their website, YouTube, Pinterest, Instagram or LinkedIn, and other platforms. They also provide a link that allows their visitors to buy your products or services at the click of a button.

At the same time, you need to pay these affiliate marketers for their efforts. Meaning, each time a customer buys something from your ecommerce business using their affiliate link, you have to pay them a commission. The amount of money you pay as commission depends on various factors. However, it is generally calculated on the cost price of the product and the margin you earn by selling it.

For example, Amazon pays between three percent and 10 percent of the actual cost of the product (minus shipping, taxes, and other charges) to its affiliate marketers. This commission comes from a part of the profits that Amazon would earn if it sold the product through its own website. But considering that affiliates contribute over a billion visitors per month to its websites, the number of profits that Amazon earns can only be imagined.

Now that we know about affiliate marketing, let’s explore how it can transform your ecommerce business.

Affiliate Marketing for Your Ecommerce Business

There’re several ways how affiliate marketing can benefit and help your small or large ecommerce business to flourish. In fact, over 81 percent of small to large ecommerce companies in America use affiliate marketing as their single most important resource to drive sales and increase profits. And for good reasons too.

Buy Now Pay Later

Surely you’ve heard about “buy now, pay later” schemes. Affiliate marketing is somewhat similar to these schemes and legit too. However, you’ll not be providing products or services on credit through affiliate marketing.

Instead, you’ll be using a lot of marketing channels through dozens or even hundreds of affiliate marketers and not paying for them immediately. You’ll pay the commission only when someone makes a confirmed purchase through an affiliate link that’s given by your affiliate marketers.

This means you’re getting a lot of free marketing and paying for it only when the efforts of some affiliate marketers are successful. 

There’re some affiliate marketing programs that also pay website owners for displaying banner ads or other promos on their content. However, these are very rare. In these cases too, you will be paying a fraction of the cost of conventional advertising to affiliate marketers to promote your ecommerce business.

Multiple Sales Channels

Another excellent way how affiliate marketing transforms your ecommerce business is by enabling multiple local, domestic, and international sales channels for your brand and its offerings. Realistically speaking, there are no limits on how many affiliate marketers you can add to your network or from which geographical location. It depends upon the nature of your business and the ability to cater to the needs of a diverse population.

Affiliate marketing allows you to expand presence in a market or even enter newer markets rapidly. There are about 600 million blogs worldwide. Understandably, not all of them are active or blog with the intention of making money. 

The US alone is home to an estimated 31 million bloggers, most of whom run blog sites purely for monetizing. And this is a vast resource for any ecommerce business that wants to enter affiliate marketing.

In fact, a lot of bloggers enter the field mainly to do affiliate marketing and earn a large passive income. By any standards, conventional marketing doesn’t offer you such a vast resource pool. And that too at a fraction of the cost or without the need to pay upfront. This is one of the ways you can leverage affiliate marketing to transform your ecommerce business.

Innovating & Adapting Brand Offerings

As I mentioned earlier, there are no limits on the number of affiliate marketers you can accept to promote your ecommerce business. This also means you can enter any market rapidly. However, the needs of every market can be different than the other. In fact, this is invariably the case when you’re looking at international sales. There’re Customs and other restrictions and limitations on selling certain kinds of goods to foreign buyers.

Affiliate marketing enables you to innovate and adapt your product offerings to meet legal requirements as well as fulfill the demands of the huge, untapped foreign market where many others fail. This means you have full control over the market and the flexibility to offer select products in specific markets rather than offering everything that some customers might never buy or never require or cannot get due to legal restrictions.

Innovating and adapting brand offerings is also a superb way to attract more clientele within your main market too. There’ll be countless people that are awaiting the specific product that you’re offering to a foreign clientele. It could be lower priced or cost more, have fewer or more features, and even differ in composition where necessary. Innovation and adaptation are two of the main benefits your ecommerce business derives by offering affiliate marketing to a broader and international audience.

Suitable for Every Ecommerce Business

If we look around for affiliate marketing programs available online, you’ll be amazed by the sheer number. Affiliate marketing is a valuable resource used by over 84 percent of content marketers of all kinds. There’re affiliate marketing programs available for everything from online groceries to high-end liquor, healthcare, insurance, banking, beauty products, and in some cases, also for Multilevel Marketing companies.

This simply means that affiliate marketing is suitable for your ecommerce business, regardless of its nature and location. While the basics of an affiliate marketing program remain the same, only the type of websites that can promote your business and the locations can change. And sometimes, the rate of commissions payable to affiliate marketers too.

Nowadays, there are various kinds of software that are available for both affiliate marketers and companies that offer affiliate marketing. They can automate a lot of affiliate marketing processes and can be customized to suit almost every business on this planet.

Multiple Online Platforms for Affiliates

Nowadays, affiliate marketers also use various other platforms to promote brands, products, and services. One of them is YouTube. The rapid proliferation of smartphones and high-speed mobile data at economical rates has made it possible for people to access videos on YouTube. Therefore, lots of affiliate marketers use videos for the purpose. They make videos about real-life stories and experiences of users with a brand, product or service. And provide an affiliate link where people can place orders.

Instagram has also become a top affiliate marketing platform. There Are millions of micro-influencers and influencers that flourish on Instagram. And they have hundreds if not thousands of followers. These influencers are from all age groups and have different followings.

Though LinkedIn doesn’t really permit affiliate marketing, it’s possible to include a link to some product or service when a user creates a post about something.

In simple words, this translates as more and more online channels for your ecommerce business to mark its presence, popularize the brand and its offerings, and generate leads and customers through affiliate marketing.

Building Email List

 A lot of ecommerce business owners consider email marketing as something old fashioned or even unnecessary. However, email marketing remains relevant to date if you can provide people with content they want to read, information, special offers, and other appealing things.

Every time a customer buys something from your affiliate marketer, you can capture their email and other details.  This doesn’t mean that you should dispense with affiliate marketers merely because you now know the customer. In fact, you can collaborate with your affiliate marketers to find ways and means to leverage email marketing to boost sales and client engagement.

One of the ways to do this is by sending email content about your ecommerce business to your affiliate marketing network and asking them to relay it onwards to customers they’ve so far managed to convert through affiliate links.

No Need for Ecommerce Website

Another way affiliate marketing transforms your ecommerce business is by dispensing with the need for you to have an independent or own ecommerce website. Setting up an ecommerce website is your option. It doesn’t cost much and nor is it very hard to set up and maintain. However, you definitely need to do a lot of digital marketing processes on your ecommerce website if you’re serious about getting noticed by customers and want to gain a fair edge over competitors in the same field.

You can have affiliate marketers even if you open an online store on ecommerce platforms such as Shopify and Etsy among others. Or you could have a brick-and-mortar store and have a basic website to mark an online presence. And still, appoint affiliate marketers. These are simple ideas that would suit anyone who’s just a beginner to ecommerce and has just one or two products and services to offer within a small geographic zone. However, if your ecommerce business has a large offering, it’s better to have your own ecommerce website too.

Affiliates Generate Consumer Confidence

Affiliate marketing is a superb way to boost the confidence of your customers in your ecommerce business and its offerings. That’s because bloggers and affiliate marketers will usually write honest reviews about your brand, products, and services. This means a customer knows what to expect when they make a purchase. This leaves little or no room for after-sales grievances or disputes, except in cases where it truly merits.

That’s because bloggers and affiliate marketers also depend upon a large following to boost their income from their websites. Providing an incorrect or wrong review, making tall claims about a product or service or exaggerating claims leads to a drop in the number of their followers. And few customers will utilize their affiliate marketing links due to the lack of credible or correct information.

Furthermore, when a large number of websites speak about your ecommerce business, customers develop a sense of confidence and become your customers. They know that hundreds or even thousands of affiliate marketers are promoting your brand because it delivers what it promises. There’s very little room for ambiguity.

In Conclusion

There’re superb reports on the future of the affiliate marketing industry worldwide. In the year 2020, there’re projections that it would stand between $8.6 billion and $10 billion. However, the actual figure could go much higher as more and more people turn to affiliate marketing as a source of income and people buy from affiliate websites due to problems caused by the Covid-19 pandemic.