Affiliate programs are worth over $13 billion and growing fast. Learn how to set up an affiliate program for your online store step by step. As consumers look to social media influencers, expert blogs, and review websites for product recommendations, affiliate marketing has become a key marketing strategy for brands.

In this article, we'll cover everything from choosing which products to promote, to setting commissions and recruiting affiliate partners.

What is an affiliate marketing program?

Affiliate marketing programs are a rewards-based system where content creators, influencers, and other partners promote products and in return receive a commission or other compensation. When you work with an affiliate partner, they send visitors through a referral link (affiliate link) from their website or content channel to your online store, which drives traffic to your website or content channel.

How does the affiliate program work?

When an affiliate partner successfully drives customers to an online store in compliance with the rules and requirements of the affiliate program, the program typically pays a percentage of the total sales as a commission. For example, Target pays affiliate partners up to 8% commission on purchases made through affiliate links. Some programs pay a flat amount.

Affiliate marketing is a cost-effective strategy for advertisers compared to traditional marketing methods such as TV advertising, as it increases brand awareness while only paying commissions when actual sales are made.

Affiliate programs are also a way for publishers like bloggers, social media influencers, and review sites to make money online. This can be a win-win strategy for all parties involved.

What is the purpose of the affiliate program?

Affiliate programs are designed to be a mutually beneficial partnership between brands and marketers. Marketers are compensated for bringing in customers, and brands profit through a commission model paid per sale.

Authority Hackers , a site specializing in affiliate programs, states that "brands that use affiliate marketing see an average return on investment of $15 for every dollar invested." They also say that affiliate marketing is the most successful marketing strategy for 20% of brands.

There is also real evidence that affiliate marketing is effective. Wirecutter , a consumer analytics site owned by the New York Times, operates solely on affiliate commissions and subscription fees, and according to the New York Times, its affiliate revenue grew 20% in the fourth quarter of 2022.

Brands like Healthish use affiliate marketing campaigns to build awareness, launch products, and generate sales. For example, when Healthish launched its flagship product, the WB-1 bottle , it worked with Instagram influencers to create affiliate content.

Is Affiliate Marketing Right for Your Business?

Yes, affiliate marketing is suitable for any business. However, if your margins are low, affiliate marketing may not make sense. It can be difficult for a business owner to pay affiliate partners while also making a profit. In order for an affiliate program to reap the rewards of the promoter’s efforts and expenses, it must pay a percentage of each sale. One of the best ways to find out if an affiliate program is right for your business is to see if other companies in your industry are using it as part of their business strategy. BarkBox has been running a successful affiliate program for almost 10 years.

A program that has been around this long means that BarkBox is delivering real results and a solid return on the time invested. If you look at any popular dog Instagram account, you’ll see that many of them include a BarkBox affiliate link or code in their bio.

Start your affiliate program in 5 steps

When starting an affiliate program, it is important to evaluate the types of products you want to sell, your target audience, and determine a program structure that will meet both your business needs and the needs of your affiliate partners.

1. Choose the right products and promotions

Choosing products with a high average order value makes the program more attractive to affiliate partners, as they earn more. For example, a 10% commission on an $80 product is much more attractive than a $5 product.

Consider suggesting which products to advertise to your affiliate partners and offering additional promotions such as:

• Free shipping on orders over $50 : Nine out of 10 shoppers say free shipping is the biggest factor that makes them shop more online.
• First-time customer discount : Offer new customers an additional discount on their first purchase. You can then remarket to them via email or Facebook ads.
• The more you buy, the bigger the discount: Try offering tiered discounts to increase your average order value. For example, you could offer 20% off for orders over $50, 25% off for orders over $100, etc.

Offering personalized promotions to your affiliate partners can help drive more traffic, which can lead to increased sales for your business. If your strategy isn’t working, you can always add or remove products from your affiliate program and adjust your brand message.

2. Determining Affiliate Pricing and Fees

After your affiliate partners have chosen the products they will promote, it is time to decide on a commission. Some ecommerce brands offer free products or credits, but a pricing strategy that rewards you with cash may be the most appealing to experienced affiliate partners.

The next step is to set your commission rate. There are two popular options:

• Percentage Commission : We pay a percentage of each affiliate sale as commission.
• Fixed Fee : You pay a fixed amount for each sale.

According to ReferralRock , the most common commission method for affiliate programs is a percentage commission, with average commissions ranging from 5% to 30%. Here are some popular product categories and their affiliate commission rates:

• Beauty : 15%
• Clothing : 10%–15%
• Food and Beverage : 10%–20%
• Health : 20%–30%
• Pets : 10%–20%
• Computers and Technology Products : 15%–20%

Depending on the affiliate program, the commission rate may vary. For example, Amazon’s commission rate ranges from 1% to 20%, depending on the product you are promoting. Start by setting your commission rate by category. You can always increase or decrease your commission rate if you decide it is not right for your business. Alternatively, you can create different offers using different types of commission rates.

3. Choose an affiliate management app

Shopify users can easily install affiliate management apps to manage their affiliate programs. Affiliate apps in the Shopify App Store are designed to integrate seamlessly with your online store. Some examples include:

Referral

Refersion is an affiliate platform with nearly 1,000 reviews and a 4.7 star rating, offering a complete affiliate and influencer marketing platform that can get your program up and running in minutes.

The platform has a variety of tools to recruit affiliate partners, track traffic, and pay commissions. Refersion’s clients have access to a database of 3.6 million affiliate partners and publishers, making it easy to find potential partners.

Key Features:

• Quick Start : Start your affiliate program in minutes.
• Easy to find new affiliate partners and influencers : Easily recruit new affiliate partners.
• Easy Affiliate Partner Registration : You can quickly register your affiliate partners on the registration page.
• Provide an Affiliate Dashboard : Provide a dashboard for affiliate partners to track their performance.
• Coupon Code Tracking : Track sales through coupon code use.
• Set commissions by product : You can set different commissions for specific products.

Refersion has features that allow you to scale with your business. You can start with a free trial of the Professional plan and upgrade to the Business or Enterprise plan when you need to expand your affiliate program.

LeadDyno

LeadDyno is a marketing plugin that enables affiliate management, commission customization, lead and customer reporting and analytics, and transparency into your sales funnel. The app processed over $161 million in affiliate sales in 2022 alone and offers customer support via live chat, email, and video. It allows you to easily track orders generated from your affiliate links and coupons, and provides tools to engage, reward, and pay out commissions to your affiliate partners.

LeadDyno integrates seamlessly with your Shopify store and 25+ other platforms with just a few clicks. You can pay your affiliate partners manually or automatically, and even get one-click approval through PayPal or Coinbase.

Key Features:

• Streamlined Affiliate Management Tools : Easily manage your affiliate program.
• Personalized Dashboard for Each Affiliate Partner : We provide a dashboard for affiliate partners to monitor their activity.
• Digital Marketing Tools : We provide tools to engage affiliate partners and grow your program.
• Automated Outreach Program : Automate communications with your affiliate partners.
• Create affiliate groups and set commission tiers : Set up multiple groups and tiers for more granular management.
• Powerful tracking system without third-party cookies : Reliably track your customers’ activities.
• Flexible Customer Support Options : Get customer support in a variety of ways.

LeadDyno offers a 30-day free trial, and Starter plans start at $49 per month.

Google & YouTube app

You can add products to YouTube’s affiliate marketing program directly from your Shopify dashboard. After installing the Google & YouTube app, sign up for the affiliate program, set your commission rate and terms, and let popular YouTube creators tag your products in their videos. The app also lets you manage sales directly on YouTube, and promote your products through storefronts and display ads on the platform.

Key Features:

• Manage your affiliate partners from your Shopify dashboard : Manage all of your affiliate partners from one dashboard.
• Get traffic insights with Google’s AI-powered analytics : Analyze your traffic with Google’s powerful analytics tools.
• Increase product visibility in Google Search : Make your products more visible in Google search results.
• Run ads on Google and YouTube : Easily manage your advertising campaigns across Google and YouTube.

Shopify users can add the Google & YouTube app to their dashboard to display their products on YouTube for free. Affiliate management features are available on the Advanced or Plus plan .

UpPromote

UpPromote is a highly rated affiliate marketing app on the Shopify App Store with over 2,800 reviews. UpPromote is an automated, all-in-one influencer and affiliate marketing solution that lets you easily build professional affiliate campaigns with just a few clicks.

This app makes it easy to manage your affiliate program, automate program processes, track affiliate links and coupons, customize signup forms, and set up payments and rewards for each affiliate. It also provides tools to convert customers to affiliates and a powerful tracking system to track clicks and conversions.

Key Features:

• UpPromote Marketplace : A marketplace to find potential ambassadors and influencers.
• Reliable tracking process : Accurate tracking possible through various click tracking methods.
• Customized Management Platform for Your Brand : Customize your affiliate program to fit your brand.
• Dedicated Support Team : A dedicated team available to provide support at any time.
• Ability to sync affiliate contacts with Shopify customers : Affiliate partners can sync their contacts with Shopify customers.
• Advanced Offer Options : Advanced offer options to attract more affiliate partners.

UpPromote offers a 14-day free trial and includes a free plan for unlimited affiliate partners. Paid plans start at $29.99 per month.

Running your program using an affiliate marketing app allows you to connect with affiliate partners on a massive scale.

4. Recruiting Affiliate Partners

A successful affiliate marketing strategy relies on recruiting the right affiliate partners. Finding the right affiliate partners for your program is key. Some affiliate programs, such as those used by streaming platform Twitch , only accept applicants who meet certain criteria (such as a minimum number of followers or a level of activity on the platform). However, not all brands have these requirements. Other ways to attract affiliate partners to promote your digital and physical products include:

Social Media

Promote your affiliate program through social media marketing channels. This will naturally reach customers who could become potential affiliate partners.

Email Marketing

If you have an email list, use email marketing to recruit affiliate partners. Email solicitations have the greatest impact on affiliate engagement compared to other channels. Introduce your affiliate program to your subscribers, encourage them to apply, and encourage them to promote the program to those who are interested.

Website

Website visitors are likely already familiar with your brand, making them potential candidates for affiliate programs. Additionally, your website is a great place for affiliate marketers to learn more about new programs.

Here are some best practices when promoting affiliate programs on your website:

• Make it easy to find : Promote your affiliate program in an easily accessible location, such as a link at the bottom of your website.
• Create a landing page : Create a page dedicated to your program and highlight the benefits of signing up.
• Create a signup form : Use Shopify Forms to create a signup form that you can place permanently on your website.
• Focus on content : Fill your website with high-quality content so that your affiliate partners know that your company is a trustworthy partner when considering a partnership.

Once an affiliate partner has joined the program, it is your job to promote the product, but it is your job to promote the program. Provide information that potential affiliate partners would like to know, such as your niche, the market relevance of your product or service, your affiliate network, or your sales tracking platform.

Also, based on sales Offer attractive offers such as tiered commissions, bonus incentives, and affiliate partner support during the application process.

Affiliate Network

Blume’s ShareASale listing is concise and clear: it provides a brief introduction to the brand and its products, program benefits (e.g. up to 30% commission rate), and contact information for how to get involved.

Shopify Collabs

Shopify Collabs makes it easy to find influencers to promote your products. Install the Shopify Collabs app to run an affiliate program targeting social media influencers from your Shopify admin page. You can recruit new creators or invite creators you already know to join your affiliate program through Collabs.

5. Managing Affiliate Partners

Once you have affiliate partners, it is important to monitor the performance of each partner who has participated in the program. Regular communication is essential to building a strong relationship with each affiliate partner who has participated in the program.

Make sure your affiliate partners are familiar with the program’s rules and familiar with your brand. Create a content library or knowledge base with tutorials, webinars, graphics, pre-written social posts and templates, and a list of approved (or required) hashtags to help your affiliate partners align their actions with your business goals and your affiliate program’s marketing strategy.

To evaluate the effectiveness of your program, it is important to identify your best performing affiliate marketers. If they are one of your most frequent buyers, incorporate this into your affiliate marketing strategy and encourage more customers to join your program.

Here are some metrics to look at carefully when evaluating a program:

• Total Affiliate Revenue : Total revenue generated through affiliate partners
• Sales by Affiliate Partner : Sales generated by each affiliate partner
• Average Order Value : The average order value, especially when compared to non-affiliate marketing sales.
• Total Payout : Total amount paid to affiliate partners
• Paid-to-Sales Ratio : The percentage of commissions paid out compared to affiliate sales
• Total number of affiliate partners : The total number of affiliate partners that have participated in the program.
• Number of New Affiliate Partners : The number of new affiliate partners joining the program.
• Number of Affiliates Who Left the Program : The number of affiliates who left the program.

Are you ready to start your affiliate marketing program?

Now that you know the tools to get started with an affiliate program and how to create an affiliate program that works for your Shopify store, you’re ready to get started! Head to the Shopify App Store to find robust apps that can help you build a creative and professional program. Getting started is quick and easy, and many of them offer free trials, so give them a try today.

Affiliate Program FAQs