How to Create an Affiliate Program (8 Steps)

Affiliate marketing, a big deal in today’s online world, is a great way for businesses to make money.

A majority of businesses spend 10% of their marketing budget on affiliate marketing the total spent reached approximately $8.2 billion in 2022 (Statista). But what exactly is an affiliate program, and how can you set one up for your business? 

Let’s break it down step by step.

What’s 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.

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

Do you need an affiliate program? 

Before diving in, let’s see if an affiliate program is a good fit for your business.

Why affiliate programs are beneficial for your business? 

Well, affiliate marketing is a business model that is beneficial for your budget. Well, let’s talk about ROI (Return on Investment).

When you set up an affiliate program, you’re recruiting a team of online promoters who only get paid when they bring you actual customers. That means you’re not shelling out cash unless you’re seeing results. 

And let me hit you with some numbers: on average, businesses using affiliate marketing see a whopping $14 in return for every single dollar they put into it. That’s a jaw-dropping 1400% return on investment!

Further, it offers benefits including reach increase, credibility, and long-term relationship building.

Does Your Business Need It?

Affiliate programs work best for online stores and subscription services. About the former, industries like fashion, beauty, tech, and subscriptions are the best match for affiliate marketing. If you’re in one of these, affiliate marketing could be a goldmine. However, smaller or niche businesses might need help finding suitable partners.

Can You Manage an Affiliate Program?

Though affiliate marketing will effectively bring bucks, it’s not all sunshine and rainbows. Running an affiliate program is like taking on a new level of responsibility. Here’s the lowdown:

• Everchanging demand: when you’ve got affiliates out there hustling to bring in customers, you better be prepared for a surge in business. That means stock, and human resources to keep running the business.
• Customer support: The more customer comes to you, the more questions and demands are laid down. You’ve got to be on top of your game when it comes to providing customer support.  
• Pay commissions: Make sure you’ve got your finances in order and that you’re prepared to pay up for affiliates when the time comes.

In a nutshell, running an affiliate means you need to handle the challenges that come your way, the rewards can be well worth it.  

How to Start Your Own 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 for Program Setup

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. Figure Out 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

• 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. Write Down Affiliate Rules and Program Structure 

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. Promotion & 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 Reachout 

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.

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

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

Choose 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.

Not getting serious about 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.

Not 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:

Credit strong affiliate

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.

Make a program page for your program

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.

Check Out the Competition

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.