What is affiliate marketing? A beginner’s guide

Affiliate marketing has become one of the most popular ways for brands to grow their reach and drive sales. Whether you’re a seasoned entrepreneur or just starting your business journey, understanding the basics of affiliate marketing is essential for boosting your brand’s visibility and sales. In this post, you’ll find the perfect beginner’s guide where we’ll break down the basics of affiliate marketing, how it works, and how you can leverage it to build your brand.

What is affiliate marketing? 

Affiliate marketing is a type of performance-based marketing where brands reward individuals (affiliates) for driving traffic or sales to their website through the affiliate’s marketing efforts. The affiliate promotes the brand’s product through social media using unique links, and earns a commission every time someone purchases through that link. 

It’s a win-win situation for both parties – a partnership where brands can extend their marketing reach by working with affiliates who have an established audience, while affiliates can earn money by promoting products they believe in.

Who is involved in the affiliate marketing process?

The affiliate marketing process generally involves three key players.

The brand. This is the business or individual selling the product, and can be a large company or a small entrepreneur. They create the product and set up the affiliate program to allow others to promote it.

The affiliate. The affiliate is the person who promotes the product to their audience. Affiliates can be anyone with an online presence/audience like bloggers or social media influencers. The affiliate uses unique tracking links provided by the brand to direct potential customers to their site.

The consumer. This is the person who clicks on the affiliate’s link and makes a purchase. Without the consumer, there would be no sale, and the affiliate wouldn’t earn a commission.

How does affiliate marketing work?

Here is a quick breakdown of the steps involved in affiliate marketing. 

1. Sign-up: The affiliate signs up for the brands affiliate program. Many brands run their own affiliate programs, while others work through networks. Once approved, the affiliate gains access to unique tracking links.
2. Promote: The affiliate begins promoting the brand’s products by making content on their online platforms. This can be done using social media posts and videos. The affiliate uses special tracking links to ensure any sales or leads are attributed to their efforts.
3. Tracking: When a consumer clicks on the affiliate’s link, the brand’s tracking system records the action. The tracking system can monitor actions like clicks, sign-ups, or purchases.
4. Earn commissions: If the consumer takes the desired action (like making a purchase), the affiliate earns a commission. The commission structure can vary, but it’s typically a percentage of the sale or a fixed amount.
5. Payment: Once the consumer completes the transaction and any return/refund period has passed, the brand pays the affiliate. Payment schedules vary, but affiliates usually receive their earnings on a monthly or bi-weekly basis.

Why should brands use affiliate marketing?

There are several reasons why affiliate marketing could be a game-changer for your brand. 

Cost-effective

For a start, affiliate marketing is very cost-effective. Considering it is performance-based, you only pay affiliates when they drive results. This makes it a low-risk, cost-effective marketing strategy for new and growing brands.

Extended reach

Affiliate marketing also provides an extended reach to a new or niche audience that your brand may not otherwise be able to interact with. This helps you tap into their networks and extend your brand’s reach exponentially. Not to mention the various platforms that affiliates can promote your products on – social media, blogs, websites. More diverse marketing channels helps your brand stay visible in different parts of the digital marketing scene. 

Scalability

Finally, affiliate marketing is scalable to your brand growth. The affiliate program can expand by adding more affiliates as your brand gets bigger. This creates a mutually beneficial relationship where both you and your affiliates continue to grow.

How to get started in affiliate marketing with Shopfluence

For brands new to affiliate marketing, here’s some steps to follow when getting started.

1. Create an affiliate program: Decide whether you want to manage your affiliate program in-house or work with an affiliate platform like Shopfluence . Set up your program’s terms, including commission rates and payment structure.
2. Recruit affiliates: Find affiliates that align with your brand values and target audience. Look for bloggers, influencers, or content creators who are passionate about your products and have a dedicated following.
3. Track performance: Use platforms like affiliate marketing software or platforms to track clicks, conversions, and performance. This will help you evaluate which affiliates are bringing in the best results. 
4. Optimise your campaigns: Continuously monitor your affiliate marketing efforts, making adjustments to your strategy and optimising the program based on performance metrics.

Those final two steps can be achieved using Shopfluence – a platform that can help brands start their own affiliate program by connecting to their eCommerce store and automate their new or existing gifting activities, generating discount codes for each influencer automatically and tracking their sales. Then, Shopfluence can find best performing influencers via reporting in which brands can decide whether they want to make them brand ambassadors.

Affiliate marketing can be a powerful tool for building brand awareness, driving traffic, and increasing sales – especially for new or small businesses with limited marketing budgets. By partnering with the right affiliates, you can tap into new audiences, grow your brand’s presence, and enjoy the benefits of a performance-based marketing strategy.