How to Create an Affiliate Program? (8 Steps)

Affiliate marketing is a great way to get more sales for your business, and this article will show you how to create an affiliate program that bring highest ROI!

So, let’s dive in!

What is an Affiliate Program?

An affiliate program is when a company pays an affiliate (like a blogger, social media influencer, or another business) a commission for sending customers their way. This happens when the affiliate promotes the company’s products or includes links to their site in their content. The affiliate gets paid if those links result in sales or desired actions.

Beside sales, it offers various benefits including reach increase, credibility, and long-term relationship building. Here’s a concise process layout for an affiliate program:

1. Affiliate Joins: Affiliates sign up for the program and receive unique referral links or codes.
2. Promotion: Affiliates promote the business’s products or services via social media, websites, or other channels.
3. Tracking: Sales or actions are tracked through the affiliate’s unique link or code.
4. Commissions: Affiliates earn a commission for each sale or action they drive, typically a percentage of the sale.

Launching an affiliate marketing program is one of the most common ways to do affiliate marketing on Shopify

When to start an affiliate program?

Starting an affiliate program means expanding your network, working with more people and taking on more responsibility.

There are 02 main checkpoint you need to take into account before running an affiliate program:

• Do you brand REALLY need an affiliate program?
• Budget planning & market analysis to know if you can manage a program properly.

Here’s what you need to keep in mind:

Signs that you NEED an Affiliate Program

There are signs say that your brand need an affiliate program. Here are 03 typical signs & if you have one of the below, your brand may need to build an affiliate program:

• Your brand has operated stably for awhile: Affiliate programs involve many small tasks, which can be overwhelming for new businesses. It’s best to start one after your operations are steady, your online presence is strong, and your monthly revenue is consistent. This ensures you’re ready to handle and grow the program effectively.
• Your Business Thrives on Referrals: If customers are already recommending your brand to others, it’s a strong indication you could benefit from an affiliate program. Affiliate programs are ideal for e-commerce and subscription services, especially in industries like fashion, beauty, and tech. If you’re in one of these sectors, affiliate marketing could be a game-changer.
• Paid Ads Don’t Work: Some niche don’t work with paid ads & traditional advertising but referrals. It’s particularly true when your niche is small or unpopular. For example, handmade leather home products & mysticism services.
• KOLs & KOCs in your niche are thriving: When key opinion leaders (KOLs) or key opinion consumers (KOCs) in your industry have an active presence, it’s a sign that affiliate marketing can thrive. For example, fitness brands often collaborate with influencers who create engaging workout videos or product reviews on Instagram and YouTube. It’s really hard to stay away working with affiliate influencers, because your competitors would also do it to take the competittive advantages.

Budget for an Affiliate Program

Setting up an affiliate program is not too costly, especially for small businesses. Initial costs can range from as low as $100 to under $500, covering affiliate software, promotion, and materials like banners or landing pages. For mid-sized to larger businesses, costs can rise to around $5,000, factoring in advanced software, recruitment campaigns, and tailored creatives.

For the recurring fee, it may take around 15% – 20% of your revenue to maintain and grow your affiliate program. This includes commissions, software monthly fee, and management costs.

• Affiliate Commissions: 5-15% of revenue (incentives included)
• Affiliate Management Software: $50 to $500 monthly.
• Affiliate Materials design: It varies from hundreds of dollars to thousands of dollars, depending on the business’s size.
• Management Costs: 1-2% of revenue

Prepare for more tasks

There are 02 types of task you need to prepare after launching an affiliate program:

• Support affiliates
• Process the surging number of orders.

Affiliate Supports

At the beginning, a SMEs business owner might handle most of the marketing works alone. But as your affiliate program grows, there are a lot of things to do.

Your brand needs to deliver up-to-date information about products, promotions, and company updates quickly, so affiliates can promote your brand with ease. You also need to provide them with the right tools, like banners, ads, and other content, to help them market your products. Affiliates should have easy access to product data to use in their promotions. Payments must be processed correctly and on time to maintain trust and avoid frustration.

As the program grows, it’s a good idea to hire an Affiliate Manager to handle these tasks, ensuring the program runs smoothly and continues to expand.

Prepare for Increased Demand

Unexpected demand surge is common in affiliate marketing, as many affiliates promote your products and some of the promotions might be unexpectedly viral. As a merchant, you have to be ready for potential spikes in orders.

Make sure you have enough stock, staff, and systems in place to handle the increase in demand smoothly.

How to create a successful affiliate program: Step-by-Step Guide

Ready to roll? Here’s how to get started:

1. Set clear goals

Take a moment to map out your goals. You can start by answering some questions. Who do you want to target with your affiliate program? What are your expectations in terms of revenue generation?

Decide who you want to target and how much money you want affiliates to bring in. Set goals for things like sales, clicks, and leads.

While all metrics are important, sales should be your top priority since they directly impact your bottom line. However, don’t overlook other crucial metrics in affiliate marketing, such as click-through rates, conversion rates, and average order value. These metrics provide valuable insights into the effectiveness of your program and help you fine-tune your strategies along the way.

2. Choose a platform to set up program

Let’s talk about how you’re going to set it up. You’ve got 02 main options: doing it in-house using specialized software or joining an affiliate network. Let’s break down each one!  

See more: Affiliate Software vs. Affiliate Network: 5 key differences 

In-House Affiliate Program: This is where you manage everything yourself, right from your own platform. You recruit affiliates, set the rules, and handle all the tracking and payouts.

• Pros: Total control over your program. You can customize it to fit your brand perfectly and have direct communication with your affiliates.
• Cons: It requires more time and resources to manage everything yourself, and you might have a harder time reaching potential affiliates without the network’s reach.

Affiliate Network Program: Here, you join a network that already has a pool of affiliates ready to promote your products or services. The network handles a lot of the administrative tasks for you.

• Pros: Access to a wider audience of affiliates without the hassle of recruitment. The network often provides administrative support and built-in trust.
• Cons: Less control over your program’s rules and operations. You may have to pay fees or compete for attention with other programs on the network.

Such affiliate management platforms and plugins allow you to create affiliate links, customize URL, and track affiliate performance.

Each option has its pros and cons, so it’s important to weigh them carefully and choose what works best for your business. If you want full control of your campaign there’s BixGrow the affiliate management app that is perfect for you. So, pick wisely, and get ready to watch your affiliate program soar!

3. Pick your products

Not all your products might be suited for affiliate marketing. Choose the ones that are, popular or niche items that affiliates can easily promote

Consider these factors to choose the right ones:

• Suitability: Not every product is a natural fit for affiliate marketing. Look for products that are popular or niche items with a strong demand in the market. These are the ones that affiliates can easily promote and generate interest in.
• Promotability: Your product must be something that affiliates can effectively promote. Is it visually appealing? Does it solve a common problem or fulfill a specific need? The more attractive and useful your product is, the easier it will be for affiliates to promote and sell.
• Profitability: Take a close look at the profit margins for each product. While it’s great to offer a variety of products in your affiliate program, focus on those that offer the highest potential for profitability. After all, you want both you and your affiliates to make money from the partnership.

By carefully selecting the right products for your affiliate program, you’ll ensure that both you and your affiliates reap the rewards. So, choose wisely and get ready to watch those sales roll in!

4. Set up commission structure

Alright, we’re diving into the nitty-gritty of your affiliate program now. Here’s what you need to do next:

Commission Structure: Decide how much you’re going to pay your affiliates and when they’ll get paid. Remember, there are various commission models, and each of them matches a differentiated product type. Physical products typically yield lower commissions than digital ones, so factor that into your decision-making process.

• Normal Commission: This is your baseline commission rate, also known as the commission benchmark. It’s the standard rate that affiliates will earn for each sale they generate.

• Advanced Commission: Get fancy with your commission structure by offering different rates based on various factors. You could offer products-based commission rates, affiliate-based commission rates, recurring commissions for subscription-based products, or even commission for the lifetime of the customer’s purchases.
• Rewards: Affiliate rewards can vary among performance-based bonuses, store credit, gift cards, and discounts!.
• Promotion: You’ve got to give your affiliates the tools they need to succeed. Provide them with creatives, marketing materials, and designs that they can use to promote your products effectively. The more enticing and eye-catching your promotional materials are, the more likely affiliates are to use them and drive sales.

Read the details guide: How to Set Up Affiliate Commission Rates [8 Steps]

5. Set affiliate standards

Set an standards list so you can simply check & qualify every affiliate application. However, the most fundamental application of affiliate standards is for active reach out – which will be discussed later.

Here are some notes while you setting up affiliate standards.

• Standards for your Affiliates: When evaluating potential affiliates, have an eye on who shows professionalism, reliability, and genuine interest in your products. Other standards may be related to a history of driving sales and delivering results for other brands. Your affiliate program may not require a website for participation.
• Promotion platform: Today’s social media, email marketing, and offline methods may cause the same big influence.
• Prioritizing affiliates: There will be some personalities with a big following. Consider offering personalized offers to incentivize their participation. Use sequential invitation emails or targeted outreach campaigns to engage with potential affiliates and nurture relationships over time.
• Local affiliates: A program with local affiliates may work well especially when your business wants to target a specific market. A strong online/offline appearance in a specific geographical area will make your brand become their top-of-mind.

6. Set promotion rules

Now it’s time to lay down the law and establish some ground rules for your affiliate program. Here’s what you need to include:

• Promotion Guidelines: Clarify how affiliates can promote your products on different channels and what kind of content is restricted.   
• Commission Duration: Specify whether affiliates receive one-time or recurring commissions. 
• Cookie Duration: The duration in which the sales are considered commissionable since the last time the customer clicked the link. 
• Prohibited Practices: Outline prohibited acts such as spamming or using misleading advertising tactics to protect your brand reputation.
• Quality Standards: Define your expectations on accurate product descriptions and ethical marketing practices. Disrupted brand integrity may lead to legal issues. 
• Payment: Payment method, payout threshold, and payout frequency.
• Affiliate link: Create default and custom affiliate links and assign them to your affiliates.

A simple affiliate agreement outlines the terms and conditions of the affiliate program, including commission rates, payment terms, and promotional guidelines.

See more: 15+ Actionable Tips to Manage Affiliates!

7. Marketing materials

Provide affiliates with things like banners and email templates to help them promote your products effectively. To be more specific, a synchronized promotional theme, including content and colors, will help:

• Build a consistent brand image on various platforms.
• Deliver the same brand messages and make the same brand impression.
• Save time for affiliates.

Promotion: You’ve got to give your affiliates the tools they need to succeed. Provide them with creatives, marketing materials, and designs that they can use to promote your products effectively. The more enticing and eye-catching your promotional materials are, the more likely affiliates are to use them and drive sales.

8. Affiliates outreach

An affiliate partner is someone who promotes your products or services through their channels, such as websites, blogs, or social media, in exchange for a commission on sales or leads generated. You can actively outreach to affiliates or just promote your program on various platform and wait for the suitable marketer.

Now that your affiliate program is ready to roll, it’s time to recruit some top-notch affiliates. 

Here are where to Find Affiliates:

• Affiliate Networks: Join affiliate networks like ShareASale, BixGrow Marketplace, or Rakuten Marketing, where you can connect with a large pool of potential affiliates and manage partnerships efficiently.
• Social media: Utilize platforms like LinkedIn, Twitter, Facebook groups, and Instagram to reach out to influencers, bloggers, and content creators who may be interested in promoting your products.
• Industry Events: Attend conferences, trade shows, and networking events related to your niche to meet potential affiliates in person and establish mutually beneficial partnerships.
• Content Platforms: Explore platforms like YouTube, TikTok, Substack or personal blogs and podcast directories to identify creators producing content relevant to your industry.
• Affiliate Directories: List your affiliate program in directories such as AffiliatePrograms.com or BixGrow Marketplace to attract affiliates actively searching for earning opportunities.
• Existing Customers: Reach out to your loyal customers and invite them to become affiliates. As they already have a positive experience with your products, this strategy may bring a higher conversion rate.

So, how can you reach out to those affiliates?

Email outreach is probably the best way to say hi to a potential affiliate. Emailing directly to individuals or companies who have a strong online presence and have an audience that aligns with your target market. You can also use affiliate directories or attend networking events to connect with potential affiliates. Don’t forget to request their performance report or other metrics such as conversion rate. 

Even if you’re not able to actively reach out to affiliates, continue to promote your program through your social media accounts, online front store, or landing pages. This ensures that interested individuals are aware of your program and can reach out to your program. 

9. Tracking affiliate performance

As your program launches, it is important to track it regularly. You can do it with affiliate program software or the affiliate network.  

It’s essential to track the top-performing affiliates. Most sales are derived from a small number of affiliates. 

See more: 10 Most Important Metrics in Affiliate Marketing for Advertisers

Plus, remember to keep tracking goals, such as revenue, conversion rates, unique sales, and Average Order Value (AOV). If these benchmarks aren’t being met, it might be necessary to adjust your commission structure or reassess your lineup of affiliates. 

A marketing management app does help to streamline this process and improve campaign efficiency.

03 Mistakes to avoid while creating an affiliate program

Set the wrong commission model

Selecting the right commission model is crucial for the success of your affiliate program. Different commission structures suit different businesses and industries.

It does not stop at the common models like PPC, PPS, and PPL.

It’s important to analyze your competitors, and the behavior of your target audience to choose the suitable commission model.

For example, services that earn from long-term engaged customers (such as a language learning app) may tend to offer recurring commissions. This commission model incentivizes affiliates to build a strong learner community surrounding your app, which later brings benefits for both the affiliate and the brand in the long term.

Underestimating the Importance of Tracking and Technology

Regular tracking and technology are the backbone of any affiliate program.

No, it is not an exaggeration.

Without accurate tracking, you lack insights into affiliates’ performance and ROI of your program. Invest in reliable affiliate tracking software that offers real-time reporting and analytics.

Additionally, ensure that your website can engage traffic driven by your affiliates. Poor website performance can lead to a bad user experience and decrease sales eventually.

Ignore Monitoring for Fraud and Compliance

Fraudulent activities can undermine can result in significant financial losses.

Implement robust fraud detection measures to identify and prevent fraudulent activities such as cookie stuffing, click fraud, and incentivized traffic.

Furthermore, ensure that your affiliate’s marketing activities are ethical and legally accepted. A misleading or deceptive advertising activity will disrupt your brand image.

03 Tips for Making Your Affiliate Program Awesome

Starting your affiliate program is just the beginning of boosting sales and expanding your brand’s reach. To really make it work, remember these important points:

Reward Top-Performing Affiliates

Around 80% of your sales will likely come f

80% of the total sales are brought by 20% of affiliates. 

Give special offers and rewards to your best affiliates to motivate them and keep them productive. Building good relationships with these top performers can lead to a loyal group of affiliates who consistently bring in sales.

Create a Compelling Program Landing Page

There is a surprisingly large number of businesses that DON’T have an affiliate program landing page.

This page is where potential affiliates can learn about the program and sign up. So, a good one may increase your number of affiliate sign-ups immensely.

Check out 10 stunning program page examples.

Make sure your page shows appealing benefits, earning potential, and structure of your affiliate program. Having a highlighted CTA button for signing up is standard. Plus, it should be easy to understand and look nice both on a laptop and mobile. Testimonials from other affiliates are advised to build trust.

Analyze Your Competitors’ Programs

Don’t ignore what other companies are doing with their affiliate programs. Take time to research and see what’s working for them. You can learn a lot from their successes and mistakes, which can help you make your own program better and stay competitive.

What you need to keep an eye on are strategies, commission structures, and the performance of their affiliate programs.

Ready to Get Started?

BixGrow can help you launch and manage your affiliate program smoothly. With features like partner and offer management, advanced tracking, and fraud prevention, it has got you covered.

In conclusion, affiliate programs are a powerful method for growing your business online. By following these steps and leveraging the right tools, you can create a successful affiliate program that drives sales and boosts your bottom line.