What is an Affiliate Program?
Affiliate programs have now become a cornerstone of online shopping. Affiliate marketing spending has been growing at a rate of 17% per year and estimated to be some $4.5 Billion in 2016. Business Wire
An affiliate program, also often known as an “associate” program is an arrangement between a merchant and another – oftentimes a blogger or similar online publisher/site owner – in which the blogger displays links/ads on the blog to the merchant’s site. When a reader of the blog clicks through to the merchant site and completes a sale, the blogger/site owner realizes a commission. Most typically the affiliate/associate only gets paid when readers click-through to the merchant site and complete a sale. Commission rates vary widely though most fall in the range of 4-10% of sale price.
Perhaps the most famous example is Amazon Associates.
While first in and certainly the largest, thousands of bloggers and merchants around the country are using Amazon Associates to increase revenues and benefit from their online presence. Amazon is far from being the only participant though, as many other retailers – large and small – have joined the affiliate boom. Some of the largest, like Target, operate their own programs along the same model as Amazon. Others have chosen to utilize another company to manage their program. These companies represent merchants and site owners, signing up merchants to manage their affiliate program, providing the links/digital ads to merchant sites and signing up site owners who can then seek to apply for entry into any of the available merchant programs.
Two of the largest affiliate management programs are:
- Rakuten Affiliate Network – formerly known as Linkshare
- CJ Affiliate by Conversant
In the spirit of full disclosure, we at Nourish and Nestle participate in the Amazon Affiliate program as well as the Rakuten Network and CJ Affiliate program. Our site contains links to many products sold and distributed via Amazon and companies in the Rakuten and CJ affiliate networks.
Why Participate in an Affiliate Program?
Simply put, it’s a mutually beneficial, “win-win” situation.
For the merchant, it can vastly expand the ad/promotion reach of the merchants – well beyond his own brick and mortar storefront and online presence. If a merchant doesn’t have an online presence, utilizing the “virtual” store concepts via Amazon and others can provide a quick and easy, almost “turn-key” ecommerce solution simply waiting to benefit from the added reach of the affiliate audience. For those with a more established presence with an existing ecommerce platform, a program management solution via Rakuten Linkshare or CJ might be more effective. Merchants will find a very cost-effective way of reaching the consumer wherein the merchant only pays for completed sales – a high ROI marketing investment. Imagine a massive expansion of a commission-only salesforce with none of the administrative or management burden – cha-ching!
For the site owner, it provides an additional means by which to monetize the site and generate revenue, provides a convenience service, on-line shopping, to your readers and can help establish the manner in which you want your brand to be perceived by careful selection of affiliate partners. The site-owner benefits by having a turnkey ecommerce option available without having to address any of the backroom tech or administrative issues.
How do they work?
At Nourish and Nestle, as previously mentioned, we are involved in four affiliate programs: Amazon Associates, Target, Rakuten Affiliate Network and CJ Affiliate by Conversant.
From our perspective as a publisher/site owner, with each of the programs, after joining and providing necessary registration information, you are provided a unique ID code by which they use to track your activity, clicks, sales, commissions, etc.
Once you are registered, each of the programs will provide you access to a wide variety of links on their site each representing various advertising banners, text or product-related images. Embedded in the code is the unique identifier provided to your account. This code is used to track all activity (images, clicks, etc.) and any sales that were derived from your site. It’s important to note that your readers/visitors do not have to purchase the product featured in the image upon which they clicked. If, for example, one of your readers clicks on an image showing Product X, but instead decides to purchase Product Y, most programs will pay you for that sale even though it was another product image or text that was clicked. They will pay you for bringing consumers to their site, so long as a purchase is made, no matter what they ultimately decide to purchase.
All of the programs in which we participate have very robust reporting features. They all track impressions, clicks, sales and commissions by advertiser some with very little delay, almost real time, but all at minimum on a daily basis. Most provide a variety of report formats for tracking and offer download features into Excel for helpful tracking purposes. We’ve been very happy with the reporting features of all the programs in which we participate.
In terms of payment features and billing, most ask to establish some minimum threshold for payment. For example, $25 minimum accumulated commissions, once reached, payment due is made on a monthly basis either by check or direct deposit – typically with 30-60 day lag (e.g., December commissions paid out in February). Our experience with program tracking, administration and payment has been excellent.
From the perspective of the merchant, after registering with the affiliate program manager, you will be added to the roster of merchants from which publishers/content creators have to choose to include on their sites/in their content. You will need to provide links to advertising banners and product links on your ecommerce engine/site for publishers to send their readers. In the programs that we use, all merchants have the right to approve or decline any publishers that apply. It’s important to use the same discretion in the selection of your publishers that you would use in the selection of the placement of any of your promotional efforts. They will be the face of your product/firm to their readers…..choose wisely. As a publisher, while we don’t have the direct experience as a merchant, it is our impression that the programs managers will track activity, billing, commissions, etc and have any backroom interface that you may require to facilitate any merchant arrangement.
If you decide to not register with an affiliate program manager and manage your own affiliate program, there are software applications available for you to install that will any or all facets of your program but we have no direct experience or real knowledge of these apps or their vendors.
How we use it?
At Nourish and Nestle, we use affiliate programs in a variety of ways. We often include links to products that are featured or used in the content that we create. Given the nature of our site, a lifestyle, home and garden category blog, these products run the gamut from cookbooks, ingredients and kitchen gadgets for cooking projects to yarn, knitting needles and paint supplies to be used in arts and crafting and mobile scanners we used in our efforts to go paperless…..and everything in between.
We believe our usage of these links to be mutually beneficial to us and our readers. First, it provides us an opportunity to generate additional revenue for our site. Secondly, for our readers, it provides a convenience factor to the extent that they want to use the same materials/tools that we use in the project – they can purchase the same supplies in a series of mouse clicks and typically have them delivered to their doorstep in a matter of days. In addition, if we have utilized the material in creating our content, we can validate quality and usefulness in completing the project or performing the task at hand.
Our experience thus far has been a very positive one and we would encourage all – publishers and merchants – to explore the possibilities for your specific situation.
About Nourish and Nestle
Begun in spring 2015, we are a rapidly growing home and garden lifestyle blog – celebrating nourishing food and recipes, beautiful art and crafts, simple DIY projects and organic gardening. We are fast approaching 20,000 monthly page views, our social media following is in excess of 2500 and has doubled just since October. The demographic profile of our readers is female, +35 years of age with primary interests in home and garden, crafting, Do-It-Yourself(DIY) and cooking/kitchen categories.
Our work has been featured in: Huffington Post, Home Talk, Favecrafts, Craftgawker, Yumgoggle, Foodgawker, Tastespotting, Finding Vegan, Ravelry, Knitting Help, Craftsy among others.
We are always open to collaboration opportunities with like-minded merchants be it in the form of product reviews, sponsored posts or as an ambassador for your brand. If you think that your products and services might find a good fit with our readers, we’d love to hear from you at www.nourishandnestle.com or you can email us.
Comments
Thanks so much for giving us an opportunity to contribute to your wonderful site at Vend Raleigh! We’re happy to answer any questions your readers may have about affiliate programs. Just let us know how we can help! Thanks again….