Affiliates are an often-discussed and frequently misunderstood component of any ecommerce program that has come of age since Amazon popularized affiliate programs nearly 15 years ago. Good affiliates are worth their weight in gold through the high volume of traffic they direct and, ultimately, the sales they produce. Affiliates look for certain things in an ecommerce affiliate program, so be sure that your program is attractive to them!
In the software space, successful affiliate programs can generate between 15 and 20 percent of all sales, while other companies generate virtually nothing from their affiliate programs. Then there are some affiliate programs that result in 70, 80 or even 90+ percent of a company’s annual sales! So, what makes the difference? It all depends on your business model.
Prior to joining any ecommerce affiliate program, such as Commission Junction, One Network Direct or even a company’s private program, affiliates do their research to ensure the greatest opportunity of success, which generally means being paid on sales, not leads. Here are eight questions that affiliates ask ecommerce affiliate programs before deciding to join. Keep them in mind so you know what high quality affiliates are looking for.
- What is the cost to join? Joining an ecommerce affiliate program should be absolutely free of charge. Since most affiliate programs work on some form of revenue sharing, the success of the affiliates is pivotal to the success of the program. Programs that charge to join usually end with poor results.
- Who is the online retailer? With an ecommerce affiliate program, affiliates need to be able to select the online retailers they would like to work with. Affiliates need to know they are doing business with a reputable company. Likewise, the online retailer needs to know who the affiliate is to help spur growth by providing the affiliate with marketing materials, such as banner ads and interstitial landing pages. The more an affiliate knows about the vendor and the products, the greater the opportunity for success.
- What statistics are available to affiliates? Your ecommerce affiliate program should be capable of offering vital statistics, such as impressions, hits and sales. The affiliate interface should be available and online with real-time statistics 24/7. Additionally, robust reporting capabilities are becoming more and more important to optimize conversion rates.
- How are referrals tracked from an affiliate’s site and how long do they remain in the system? Affiliates need to have confidence in an ecommerce affiliate program to track customers referred from their site. This is the only way an affiliate can receive credit for a sale. The period of time that users’ cookies stay in the system is also important because some users don’t buy during the initial visit, but may return later to make the purchase, and affiliates should still receive credit for the sale, sometimes even up to 365 days later, based upon your program rules.
- Is the affiliate program single-tier or two-tier? A single-tier program pays only for sales that affiliates generate. A two-tier program pays affiliates for the sale, plus it also pays primary affiliates a commission on the sales generated by any affiliate signed by them. Some two-tier programs are even paying small fees for each new affiliate sponsored, similar to a recruitment fee. Please note: Two-tiered programs are rare and risky, as the quality of traffic becomes less reliable the further an affiliate distances itself from the actual online retailer.
- How much commission is paid? The commission rates found in an ecommerce affiliate program range anywhere from 15 – 90 percent or 0.01 – 0.05 percent for each hit (or click). As you can imagine, the average sales amount and hit-to-sale ratio is very important to affiliates.
- What is the hit-per-sale ratio? Currently a hit-per-sale ratio of 3 to 5 percent is competitive.This is the average number of hits to a banner or text link that it takes to generate a sale. This factor is extremely important because this tells affiliates how much traffic they must generate before they can earn a commission from a sale, and what to expect for potential revenue from the traffic affiliates are receiving to their website.
- When are commission checks issued? Every program is different. Most ecommerce affiliate programs issue payment via check/Paypal/ACH (Automated Clearing House) to affiliates once per month. Affiliates should select the program that is suited to their payment time of choice. Most affiliate programs have a minimum amount that needs to be earned in order to issue an affiliate check, the amounts are typically 50 or 100 USD/Euro. Please note: High-volume affiliates may expect to negotiate for biweekly or even weekly payment dates; it all depends on how much revenue the affiliate generates.
These are important questions on the minds of affiliates when looking to incorporate an ecommerce affiliate program into their website. There are hundreds of affiliate programs out there; this insight can help you understand what affiliates are looking for when determining if your program is right for them.
Keystone
Make sure you pay attention to what affiliates are looking for in an ecommerce affiliate program to ensure the relationship is mutually beneficial.
What else do your affiliates look for or ask about? What is your hit-per-sale ratio compared to the industry average?
K.C. Motamedy contributed to this blog post.
I just received an email inviting me to comment here, so I write something.
a)This month,I promoted a product which sells well and converted perfectly. But this situaion changed when the vendor raised the pricing. I’m forced to promote it from Regnow which offers pricing adjustment by offering customer coupon code and deducting some commission. So it’s a good idea to open this feature.
b)Could you offer a list of all vendors of cleverbridge like marketplace on clickbank.
Hi Decun,
Thanks for your comment.
You bring up an interesting point regarding product pricing and the potential effects it has on affiliates. When the vendor does not offer the affiliate a discounted pricing promotion it causes the affiliate to lose sales and potentially leave a program. Communication between affiliates and vendors is essential to mutual success. This is something that we will discuss further in a future post. Please email am@cleverbridge.com regarding your specific issue to discuss how to find a solution.
Every affiliate program is different regarding how they chose to attract potential affiliates. Please contact am@cleverbridge.com to find out more about the vendors who work with cleverbridge.
cheers,
craig.
Thank you for this post. Couple quick questions. Is the hit per sale ratio a calculation the affiliates themselves can track? Or is that ratio reported in the affiliate program’s reporting dashboard? ‘Earnings-per-click’ (EPC) is another metric of importance in the industry. Is that the same thing as hit-per-sale?
Hi Erik,
Thanks for the insightful question.
Hit-Per-Sale ratio is a calculation that affiliates will have to track, because the equation involves the number of total unique visitors to their site and the total number of sales they have generated as reported by the affiliate program.
Although the value of what is being measured is similar, there is actually a very distinct difference. EPC (Earning Per Click) is a term typically used when measuring PPC (Pay Per Click). Because there is a cost attributed to every click, EPC is used to calculate the ROI per click when there is a cost attributed to the click. EPC is a actual dollar amount, unlike the Hit-Per-Sale ratio which is a percentage.
A Hit-Per-Sale ratio is used in a slightly different manner, in that it is the average of the total number of unique visitors that come to an affiliate’s website that convert into a sale, between 0% to 100%. A lot of times the Hit-Per-Sale ratio is used to calculate advertising budgets for a particular website.
EPC is used to measure ROI, while Hit-Per-Sale ratio is used to measure conversion rate. I hope this helps to clarify.
Regards,
KC
Hi Guys
Good post. Here’s what I’d like to see from Cleverbridge in the affiliate program:
1) As mentioned above, a list of who your merchants are so we can sign up to as many as possible. Not only that but I’d like to see the contact details for the person in charge of the affiliate program too so we can get in touch with the right person. Some of the merchants have the details on their own websites but not all. This is vital, I rely on good relationships for my business to work.
2) More staff to help us affiliates. KC knows this has been a bug of mine for a year or more but really guys, with a bit more help you’d pay for that extra staff member or two in a flash. My biggest gripe is the time it takes CB to answer emails, if I even get an answer at all half the time. The result, I don’t bother to promote CB merchants half as hard as others because the support is just not there.
Hi Steve,
Thanks for taking the time to post.
In response to your first point, every affiliate program is different regarding how they choose to attract potential affiliates and how they choose to work with them. I know your affiliate business model is unique and very effective yet more custom than a typical affiliate. Let’s discuss this more in-depth, so I can help connect you with the appropriate software vendors.
As we discussed at ASW10, I would love to have unlimited resources :). As we work with more quality affiliates like yourself, we will definitely add additional resources to help.
Unfortunately, some of your questions can only be answered by the software vendors. We do not want you to hold back on promoting cleverbridge software vendors. We greatly value your business and look forward to growing with you in the future. You have my direct contact information, so please call me any time.
Regards,
KC
There have been several inquiries regarding different aspects of affiliate programs and I wanted to take a moment to answer these questions.
1.Why don’t all affiliate programs offer a list of vendors, vendor products and/or contact people?
Vendor lists can be useful to a certain set of affiliates, but unnecessary to many other affiliates. When a list of vendors is provided to affiliates, affiliates may become confused or overwhelmed and chose a vendor that cannot provide the best results for the affiliates targeted. It is essential for an affiliate to know what product they want to promote and why. When this is the case, conversions are higher and the opportunity for success is greater.
Since cleverbridge has never promoted itself as an affiliate network, but always as an affiliate program, cleverbridge prides itself on the fact that our clients’ affiliates are exactly that, our clients’ affiliates and not the affiliates of cleverbridge. This is why cleverbridge does not provide a vendor list. This hands-on approach we take has helped to create some very successful vendor affiliate programs.
2.Why wouldn’t an affiliate program offer a sign-up process on their website?
A sign-up page on a company website is a sign that the ecommerce provider is trying to attract affiliates for their own affiliate network. Once the affiliate is accepted into the program, the affiliate information is often coded so the vendor can’t communicate directly with the affiliate, without using the ecommerce providers interface. This is done to prevent the vendor from taking the affiliate to another platform.
At cleverbridge, we do not promote our clients’ affiliate programs because their programs are managed by our clients directly. Therefore, there is no need to put up an affiliate signup page on our cleverbridge website. This has been pivotal for the success of the Uniblue Affiliate Program and its 200% growth.
3.Why do some affiliate programs offer data feeds and some do not?
A data feed is used to keep an up-to-date list of products, products prices, and product descriptions for multiple vendors. Data feeds tend to be used for online software stores and two-tiered affiliate programs. The problem/benefit with a data feed is the automation of the process. Using a data feed may cause software vendors to lose control of their products; with feeds it’s difficult to track what is being offered and on which sites it is being presented. However, in the same respect, data feeds can benefit affiliates because the automation allows for automatic updates of product information.
Since cleverbridge is not a Network but an affiliate program we do not take liberties with our clients’ products by offering feeds. Cleverbridge takes more of a “boutique” hands on approach compared to a more automated “Walmart” approach. Currently, cleverbridge powers an online software store without the use of a data feed, but with the consent of select vendors. This allows for more interaction with the products for the vendor and affiliate, unlike with a data feed. Examples of our cleverbridge-powered stores exist at store.majorgeeks.com and store.fileforum.com.
Regards,
KC
I’m currently an affiliate of some of your products, your website is by far the easiest to use compared to CJ.com and others. There is but one thing that I would love to see and that is an iPhone App to check my affiliate earnings.
Hi Trent,
Thank you for your praise regarding the cleverbridge Affiliate Center! Unfortunately, there is no current Affiliate Center Iphone application, but you can always turn on off the Flash based reports and bookmark the web page.
Regards,
KC