Affiliate Marketing for Merchants: Definitions & 5 Tips to Success

Affiliate marketing is one of the best marketing methods. It quickly raises your brand’s awareness and rockets online sales without any upfront cost.

However, with countless affiliate marketing tutorials available online and various affiliate tracking platforms to choose from, it can be overwhelming for someone new to affiliate marketing.

No worries! We’ve got you covered.

The great thing is that starting with affiliate marketing is not difficult.

This affiliate marketing for merchants guide will be useful for businesses initially building up affiliate campaigns or looking for affiliate marketing tips to grow their business.

By the end of this article, any affiliate merchants will surely know how to get started and thrive with affiliate marketing.

Ready? Let’s dive in!

TL;DR 

• Explore the definition of an affiliate merchant and figure out the main tasks you need to handle in this role
• Understand the benefits affiliate marketing brings to your business
• Learn how to get started with affiliate marketing as a new affiliate merchant
• Discover 5 tips for merchants in running a successful affiliate campaign
• Want to jumpstart affiliate marketing? Use UpPromote, the top-rated affiliate software on Shopify, featuring a 4.9/5 rating and over 4,000 reviews on the Shopify app store, to launch your first affiliate program quickly.

What is An Affiliate Merchant?

An affiliate merchant, also known as an advertiser or vendor, is an individual or a business that uses affiliate marketing to increase sales and brand awareness.

Affiliate merchants team up with affiliate marketers (bloggers, influencers, ambassadors, etc) to promote their products or services to their audience. Then, affiliate merchants pay commissions to affiliates for any sales or leads generated.

To become an affiliate merchant, you are responsible for:

• Create an affiliate program: This involves setting the commission structure and implementing a sales tracking and payment system for affiliates.
• Recruit affiliate marketers: When your affiliate campaign is published, you are in charge of finding and attracting potential publishers to join the program. There are several ways to do this, such as social media, affiliate networks, and other channels.
• Provide tools and assistance to your partners: You offer affiliates unique tracking links or codes to use in their advertising activities. To ensure promoters work effectively and present your brand accurately, provide them with marketing materials, such as banners, text links, and product information, for their promotions.
• Track affiliate performance and pay them commissions: When a customer clicks on an affiliate’s tracking link or uses an affiliate’s coupon code to make a purchase, you record that order. Then, you pay a commission to the publisher based on the agreed-upon commission structure.

Why Should Merchants Consider Affiliate Marketing?

Becoming an affiliate merchant and tapping into affiliate marketing is one of the best ways to grow your brand reach and boost sales in the digital age.

In fact, 81% of businesses use affiliate marketing (Rakuten) to catch customers’ attention and raise revenue. Moreover, affiliate marketing is responsible for up to 16% of worldwide e-commerce revenues (Fetch Profits).

There’s real-world proof that affiliate marketing works: Amazon has built a strong affiliate network through Amazon Associates, with over 900,000 partners worldwide. This network has played a big role in boosting Amazon’s sales and revenue, helping the company reach $170.0 billion in net revenue in the fourth quarter of 2023.

Here are some key reasons to embrace affiliate marketing to boost your revenue:

First of all, it is a cost-effective and low-risk strategy. This is a performance-based marketing approach, motivating affiliates to promote your products or services in exchange for a commission. You only pay your partners when they deliver actual results, such as sales or leads. This means you don’t have to worry about upfront costs or wasting money on channels that don’t prove their worth.

In terms of ROI, affiliate marketing adopters see impressive results, with $15 gained for every dollar spent (Impact). In comparison, even paid ads only experience half of that number, at $8 for every $1 spent.

Affiliate marketing helps you access a larger customer base. Collaborating with bloggers or influencers can help you reach new markets. They have built-in audiences you may not have reached on your own.

Followers who already trust their recommendations and are interested in similar products are more likely to visit your site and make a purchase. Even if customers have not bought something instantly, this tactic is still effective in raising brand awareness and driving more traffic to your online store.

Additionally, the strategy can lead to higher conversion rates and increased sales. Your partners use their blogs, social media, email marketing, and other channels to talk about your products and share links to your website.

Getting Started with Affiliate Marketing (In 7 Steps)

Now that you see the value of affiliate marketing for growing your business, you might be eager to jump in.

However, becoming an affiliate merchant means having multiple tasks on your plate.

No worries! Let’s explore how to get started with affiliate marketing with us.

Make sure your products are qualified

Quality products are the cornerstone of all businesses. Everyone, including you, wants to buy items that are valuable for their money. Poor-quality products lead to unhappy customers, resulting in complaints, negative reviews, and requests for returns or refunds.

Before working with ambassadors, think about this: If you were a publisher, would you promote something you weren’t confident in or knew wasn’t high quality? Probably not. You don’t want to risk the trust you’ve built with their followers.

By putting yourself in the shoes of both consumers and affiliates, you can understand their perspective.

As a merchant, prioritize the quality of your products first. Ask yourself these questions:

• Do my products address any real problems or challenges my target audience faces?
• Do they deliver a good experience for users?
• Would I confidently recommend these products to my friends and family?

If your answers are “yes” to these, you’re ready to take the next steps.

Define your overhead cost and goals for your affiliate campaign

Any marketing strategy needs a detailed plan. It must have a budget and specific goals. This will help it run smoothly and measure its success.

So does your affiliate marketing program.

In traditional marketing, businesses have to cover the costs of hiring a marketing team and maintaining office spaces. With affiliate marketing, you can bypass these expenses. However, you still need to handle some types of expenditures incurred in setting up, managing, and maintaining the program. Consider some of the following aspects:

• How do you launch, run, and manage affiliate campaigns? In what ways do you track referral orders and monitor affiliate performance? If you use affiliate management software to simplify those tasks, pay attention to its subscription fee. Or, if you hire staff to take care of the affiliate program, including affiliate managers, marketing coordinators, and customer support personnel, you would have to take into account the salary amounts for these positions.
• Do you plan to run ads to promote your affiliate program to potential publishers? Or what other methods do you use? Do you join affiliate networks, attend industry events, etc.? How much are you willing to pay for these activities?
• What about the costs of creating banners, links, and other promotional materials for affiliates?
• Have you considered the fees charged by payment processors for handling affiliate commission payments?
• Commission payouts to affiliates are not fixed amounts, as you pay them based on their promotional results. However, you still need a budget for it.

Thinking about these expenses can help you thoroughly prepare to jumpstart affiliate marketing. Drawing up the appropriate budget depends on your revenue and profit margin.

Also, you need to identify the goals you have for your affiliate marketing program. Are you trying to:

• Grow your brand awareness?
• Increase sales?
• Improve customer loyalty?

After setting your goals, define specific targets. For example, if you want to boost sales, your target might be “to attract 30 new customers through an affiliate marketing campaign in the first month.”

Next, choose key performance indicators (KPIs) to track your progress. Common KPIs for affiliate programs are:

• Conversion rate
• Number of sales per affiliate
• Percentage of active publishers
• Average order value (AOV)
• Total revenue generated from the affiliate program
• Return on investment (ROI)
• Customer lifetime value (CLV) from the affiliate program

By setting clear goals and tracking key metrics, you can make sure your affiliate program is effective and helps achieve your overall business objectives.

Do market research on competitors to finalize your commission structure

Discovering competitors’ commission rates is essential for setting your own commission structure. Knowing what others in your niche are providing can help. It can keep your rates competitive enough to attract and retain top affiliates.

But how can you research what competitors are offering? Here are several ways to do it:

• Browse competitor websites: Look at your competitors’ affiliate program pages to learn about their commission rates and any performance-based incentives.
• Engage in affiliate forums: Join affiliate marketing communities and forums on Facebook, LinkedIn, or Quora. Take part in discussions or browse threads to find information about typical commission rates in your field.
• Check affiliate networks or marketplaces: Visit popular ones, like ShareASale, Rakuten Marketing, Commission Junction, or UpPromote’s Marketplace. Check listings for similar products and services. Look for the commission rates other brands in your industry provide.

For example, if you own a fashion store, join UpPromote’s Marketplace. Then, filter categories to find offers from other merchants in your niche.

When examining competitors’s commission rates, pay attention to:

• Which commission models do they choose (percentage of sale, flat rate per item, etc.)?
• Do they pay affiliates cash rewards or other alternatives?
• Do they offer additional incentives and bonuses for top performers?
• Are their commission rates low, high, or reasonable compared to their product prices?

Setting a commission structure also depends on your product prices and profits. However, research can provide valuable insights into how much to pay your affiliates.

For instance, if most of your competitors in the same price range provide an average commission rate of 15%, offering only 10% might not attract top affiliates. In such a case, you need to increase the commission rate or add bonuses to make your program stand out.

Select your affiliate management platform

If you are a new affiliate marketing merchant, everything can seem overwhelming. That’s why you need an affiliate marketing solution. It can help you create, run, and manage your affiliate programs more easily.

What features should you consider when finding the right affiliate software?

• User-friendly interface and ease of use
• Automated tracking and commission management
• Affordable pricing and scale capability
• Customer support and training resources

If you are looking for a solution that combines all the criteria above, consider UpPromote, the top-recommended affiliate marketing app, with more than 115,000 users and over 3,500 reviews on the Shopify app store. Our all-in-one software offers robust features that help you build affiliate campaigns from scratch and then blossom your sales with affiliate marketing.

What makes UpPromote the top pick for new affiliate merchants?

Its simple interface with built-in tooltips makes it easy to navigate and find what you need. You can set up an affiliate marketing program in minutes.

But it doesn’t stop there.

UpPromote provides dedicated support, available 24/7. If you have any questions, the support team is always ready to help and guide you through setting up and managing your programs, making the process completely hassle-free.

And the best part? You can use the software without worrying about upfront fees thanks to a 14-day free trial for the subscription plans. If you’re not ready to invest in an affiliate app yet, it’s a smart move to try our free version of UpPromote.

Recruit affiliates and build a team

Setting up an affiliate campaign is just the first step. For your program to work, you need to find affiliate partners and invite them to join.

But how and where can you start?

Here are several ways to look for affiliate marketers that you can apply:

Utilize your website to show your affiliate program

Showcasing your affiliate program directly on your website is a great way to get publishers to sign in. Place it in the header or footer for easy access. Create a dedicated landing page that explains the program and rewards clearly, similar to how BarkBox does. You can also share it via social media channels or put out ads to promote it.

If you would rather not make a landing page, you may put the registration form link on the store homepage.

Holbrook Pickleball, for example, uses this approach. They leverage UpPromote’s feature to design a registration form that suits their needs and publish it in the store menu. It helped the brands attract 173 new sign-up affiliates in just one year.

When drafting a registration form, keep these points in mind:

• Featuring outstanding benefits of your program (commissions, cookies, etc.)
• Ask for essential information only (name, email, etc.)
• Match your brand’s style (colors, logos, etc.)

With UpPromote, you can easily alter the fonts, backgrounds, logos, and other elements of your registration form.

Leveraging your existing customer base

Are you looking for affiliate partners to sell your products? Have you considered turning your customers into brand promoters?

In fact, 92% of people trust recommendations from friends and family over advertising. So, there’s nothing better than having a satisfied customer spread the word about your products or services to others.

But how can you do that? The answer is creating a refer-a-friend program.

If you use UpPromote, our referral and affiliate software enables you to create a form (widget or page) on your website. It looks like this:

• Widget: Appears on your website as a floating button.

• Landing page: Displays as a signup form for customers on any page of your store.

Customers can easily register for your referral program and get their referral link to start promoting your brand right away.

Find influencers and ambassadors via social media

Social media is a treasure trove to discover potential affiliates. Start by figuring out which channels your target audience loves the most. If your products look great in photos, Instagram and Pinterest are perfect. For in-depth reviews and tutorials, YouTube is a better choice.

To find the right influencers and affiliates, dive into the search functions on these platforms. Look for keywords, hashtags, and phrases that match your brand.

For example, if you’re in the skincare industry and want affiliates to promote your product, search for “skincare” on Instagram. You’ll discover many accounts with this term in their bio, username, or profile. Then, you can directly reach out to them and ask for collaboration.

Join affiliate networks or affiliate marketplace

Another way to find affiliate marketers is to participate in an affiliate network or marketplace.

Some popular networks are ShareASale, Clickbank, CJ Affiliate, and Impact. However, these networks often charge fees for their services. So, think about your budget carefully and research to find the network that fits your brand.

Or, you can recruit affiliate partners through a marketplace. This option might be more cost-effective.

For example, TréSkin, a well-known organic beauty and health brand from the USA, utilized the UpPromote Marketplace to connect with top-notch affiliates to sell their products. This approach helped them earn over $120,000 in affiliate revenue in just one quarter without a huge marketing spend.

Now, the UpPromote Marketplace is home to over 20,000 affiliates. By joining, you can access a large pool of potential partners.

In addition to the common methods mentioned above, there are other ways to find affiliates, such as using keywords on Google, attending industry events, or teaming up with experts in your niche.

To ensure you work with the right partners, always keep these points in mind:

• Is this affiliate’s audience similar to your target audience?
• Do they have a strong online presence?
• Are they interested in your products or services?
• Do your brand’s values and personality align with those of the affiliate?

Provide high-quality marketing materials

Affiliates act as brand representatives, spreading the word about your products or services. To ensure they do this effectively, it’s important that they fully understand what you’re selling and have a clear view of your business.

You can help them by providing documents, datasheets, product training, and other resources so they know more about your brand. Offering marketing materials like banners, logos, and official content will also help them promote your brand better.

With UpPromote, sharing this information is easy. You can upload documents and various types of media (images, videos, files, links) to the Media Gallery for your affiliates. If it’s an image, your partners can download it or get the embedded code to share it on their own channels. Pretty cool, right?

Track performance and optimize your affiliate campaign

After launching an affiliate program, you definitely want it to work effectively and bring good results. To run a sustainable and successful campaign, it’s crucial to track performance and continuously optimize.

How can you evaluate the effectiveness of your program? And what should you keep an eye on?

To be specific, you should use your goals and KPIs to track results. Look for trends in the data to identify what works and what doesn’t. For an affiliate campaign, focus on some key metrics, such as:

• Clicks: How many users click on affiliate links or coupons?
• Orders: The number of purchases made through these links or coupons.
• Sales: The total sales generated by the affiliate program.
• Commissions: The total amount paid to affiliates for the sales they generate.

And what about optimizing the affiliate program? It will involve:

• Concentrating efforts: Focus on channels and segments with higher participation and conversion rates. Use analytics to make data-driven decisions about what areas need improvement.
• Reviewing and adjusting commission rates: Change rewards according to affiliate performance and your specific goals.
• A/B testing: Test different types of rewards, banner designs, and promotional content to see which performs best.
• Staying updated with industry trends: Keep up with the latest affiliate marketing trends and best practices.

With UpPromote, you can access real-time data through accurate tracking methods and detailed reports about affiliate performance.

Our affiliate management system visualizes key metrics such as total affiliates, orders, sales, clicks, and commissions with various types of graphs. All data can be filtered by program and date.

UpPromote helps you easily identify top affiliates and the most preferred products to optimize campaign results. To see each customer’s performance, check the Top Affiliate board on the Dashboard. This app also enables you to download these reports in different forms, such as Excel, CSV, PDF, and more.

5 Tips for Merchants to Run Successful Affiliate Marketing Programs

A successful affiliate marketing program can be a game-changer for your business. It can help you reach new customers and increase your sales without a massive advertising budget.

But how can you achieve that?

To become a great affiliate merchant and run effective affiliate campaigns, here are 5 ideas for you:

Offer lucrative commission rates to affiliates

Commission rates are key to making your affiliate program appealing. After all, affiliates join your campaign to make money, right? So, it’s important to set attractive commission deals that keep your program competitive and draw in new affiliates with ease.

Ensure your commission rates are as good as, or better than, what other companies offer. This way, you can attract more quality affiliates to promote your products or services over others.

A basic commission level is not enough to differentiate your campaign from your competitors and catch the attention of top-notch publishers. You might offer different commission rates for some products or categories. You can also set tiered commissions based on the affiliates’ sales milestones.

All these options are available in UpPromote. Our affiliate marketing system makes it simple for non-tech users to create dynamic commission rates.

UpPromote lets you build auto-tier commission rules based on referral sales, earned commissions, referral quantity, and more.

Each time affiliates hit a milestone, they automatically move to a better program with higher commissions.

In the UpPromote dashboard, go to Program > Auto-tier Commission.

For example, you choose the condition to be to the total sales of referrals and set three different levels as below:

In this setup:

• Affiliates who have less than $400 in total referral sales (only sales with approved commissions count) will remain in program 1.
• Those who earn $400 in total sales will automatically move to program 2.
• Likewise, they will move to program 3 once they earn $800 in total sales.

Saledress, an international online fashion store, leverages our advanced auto-tier commission structure to make its affiliate program more appealing and has achieved fruitful results.

The brand offers three affiliate programs: Silver, Gold, and Platinum, with commission rates from 8% to 10% and other great perks.

This approach was a game-changer for Saledress’s affiliate program. They grew a team of 5,000 affiliates, resulting in more than 30,000 orders in just 1.5 years.

Looking to create the same kind of success? Try UpPromote for FREE today.

Give generous bonuses to top-performing affiliates

Everyone loves rewards, right? So, offering bonuses to affiliates is a smart way to make the program more engaging.

It’s also a great method for keeping your partners engaged and motivated to increase sales. Whenever they reach a preset goal, reward them with a bonus to encourage them to keep up the good work.

Besides, generous rewards can give your program an edge over competitors and attract more talented affiliates to your team.

Using the UpPromote app, you can create flexible bonus rules based on affiliate performance.

Within our app, go to Motivation > Bonuses > Set up > Click on the Create new bonus button.

You can reward affiliates for reaching targets, such as commissions, sales, or referrals. For example, you might reward partners for their first 15 referrals or give a bonus when someone’s commissions reach $500.

On the right side, there’s a small box showing the rule you’ve set. Before turning on this bonus rule, make sure it fits your program.

When setting up bonuses, remember to:

• Set clear, measurable targets for affiliates that are challenging but achievable.
• Clearly explain the bonus program. Provide examples. Answer any questions from your affiliates.

Make clear and open communication with affiliates

One of the key factors in nurturing healthy and long-term partnerships with affiliates is communication. The more they understand your products and business goals, the better they can promote your brand. If you offer timely support and are always ready to answer their questions, publishers will see you as a dedicated and caring affiliate merchant worth working with.

For better coordination, you can:

• Discuss your goals with your partners. Clearly explain what you aim to achieve, like more sales or increased brand awareness.
• List the benefits of your affiliate programs. Include commission rates, rewards, discounts, and promotional materials.
• Share updates on your affiliate program, new collections, or promotions.
• Share updates on your affiliate program, new collections, or promotions.
• Reach out for reviews or brainstorming ideas to promote your products more effectively.
• Check in with them if they aren’t as active as before, asking if they need any help.
• Send a thank you message when they generate excellent sales.

As an affiliate management solution, UpPromote allows you to contact affiliates through email and in-app chat.

Within the UpPromote dashboard, navigate to Outreach > Affiliate Communication.

With customizable email templates and bulk-sending options, you can easily reach all your affiliates. For instance, you can send regular emails about new product launches, promotions, or program changes.

If you prefer more personalized communication, you can chat and send direct messages to affiliates within the app.

If affiliates feel connected and supported, they are more likely to actively promote your products, share good reviews, and bring in new customers through their networks.

Deliver exclusive deals to promote your products

Customers love hot deals, of course. According to Mediakix, 83% of shoppers are influenced by discounts when deciding what to buy, and 97% of US consumers look for deals when they shop.

So, why not give your affiliates special discounts, deals, or early access to new products? This gives them unique selling points that help them stand out and attract more customers.

The strategy can lead to higher conversions, increased sales, and stronger relationships with both your affiliates and customers.

But how can you create discount codes for affiliates and track them effectively? Let’s UpPromote assist you.

Our affiliate tracking platform lets you track referrals using coupons instead of affiliate links. When customers use the assigned coupon at checkout, our system automatically calculates the commissions for affiliates.

To activate the Tracking by coupon feature, visit Settings > Affiliate link & coupon > Switch on Tracking by coupon.

UpPromote helps you create a discount code within the app and assign that code to a specific affiliate. Choose an affiliate to whom you want to assign a new coupon. Then, set the rules for the new promotional code: the coupon name, discount type, value, and usage limitations.

But that’s not all.

To save time and simplify the process, you can turn on Auto-generate coupon. Select preferred programs and choose a coupon name format (Affiliate’s name, random letters, or more) to complete the setup.

Imagine you run an online store selling high-quality skincare products. To boost your affiliate program, you create a 25% discount code for your top affiliates with UpPromote and let them offer early access to a new product line.

One of your affiliates, a popular beauty blogger, shares the discount code and early access with their followers through a blog post and social media updates. Their followers, excited by the offer, quickly make purchases using the affiliate’s coupon code. This results in a big increase in sales and helps the new product get off to a great start. Cool, right?

Ensure accurate and timely payment for your partners

Affiliate payments play an important role in the success of your program. No one wants to join an affiliate campaign that is uncertain about when and how they will receive their commissions. Simply put, making accurate and on-time payouts will motivate your partners and make you a reliable affiliate merchant.

Any errors in sending commissions to affiliates can harm your partnerships. So, it’s essential to use a powerful affiliate tracking system for help.

For example, if you use UpPromote, you can ensure all affiliate payouts are timely. Our system can make the payment process hassle-free with Auto-payout via PayPal.

To enable this feature, navigate to Settings > Payment > Schedule auto payment. 

You can set payment schedules to suit your needs. Choose between paying on a specific date or by cycle. The app will then handle the payments automatically.

Plus, UpPromote lets you set flexible payment thresholds for your affiliates and adjust payout limits to match your financial goals.

How to Launch an Affiliate Marketing Program with UpPromote?

After all, the first task is to launch your own affiliate program as an affiliate merchant. If you’re feeling unsure about where to start, don’t worry – you’re in the right place! Your search ends here!

UpPromote, the #1 Shopify affiliate software trusted by experts and over 115,000 global customers, is the top pick for a new affiliate merchant like you. With a beginner-friendly interface and easy-to-follow instructions, you can jumpstart affiliate marketing with no hassle.

Simply connect UpPromote with your online store, and we will introduce you to the 4 basic steps in creating an affiliate program. Follow this guide, and you can successfully launch your first campaign.

Then, in the UpPromote dashboard, a popup will appear to guide you. It will walk you through the next important steps to customize a program that perfectly matches your brand.

If you want to adjust the commission structure of your first program or create a new campaign, navigate to the Program tab. You’ll see the Program List:

• To add a program, click Add program.
• To edit an existing program, click on the program’s name.

Regarding setting the commission rate, you can choose among three types of simple commission:

• Percent of sale: a percentage of the affiliate’s total revenue, e.g., 15% of the total order amount.
• Flat rate per item: the number of product units sold. E.g., $10 per item.
• Flat rate per order: a fixed amount on each referral order, e.g., $10 per order.

Explore more, and you’ll find that our affiliate system software has advanced settings for your commission rates, including options like commission on order value, special product commissions, auto-tier commissions, and more. Depending on what you want to achieve with each program, you can easily create a smart, customized commission structure that works best for you.

Conclusion

This guide for merchants should now make you familiar with affiliate marketing. It covers the basics, setting up campaigns, and tips for success.

By setting clear goals, offering appealing incentives, and choosing a user-friendly affiliate management system with powerful features like UpPromote, you can smoothly and confidently kick off your journey as an affiliate merchant.