Affiliate marketing for online retail: how profitable is it?

Alice Jones

Digital Marketer and Blogger

 


E-commerce marketing goes a long way, but can it make the most of affiliate campaigns? It’s a question a lot of marketers have been trying to answer recently, but you can hardly find a straightforward conclusion anywhere on the Internet.

A report shows that affiliate marketing is responsible for 16% of global online retail sales, so it’s certainly a thing to consider if you are running an eShop. However, the strategy also comes with a few downsides as well. In order to make it work properly for your e-commerce business, you need to take into account both the pros and cons of affiliate marketing.

In this post, we will try to identify the strengths and weaknesses of affiliate marketing in online retail and determine whether it’s really profitable or not. Let’s take a look!

The benefits of affiliate marketing

affiliate marketing

Affiliate marketing for online retail: how profitable is it? Source: unsplash.com

Why do e-commerce stores add affiliate campaigns to their marketing strategies? The answer lies in its substantial benefits, which is why we want to explain the top three advantages of affiliate marketing in online retail. Here they are:

  • Low upfront costs

Launching an affiliate marketing campaign requires little to no upfront costs. This is a huge privilege for newly-found online companies eager to attract customers without spending a small fortune on marketing activities.

All it takes is to sign up for a targeted affiliate marketing platform and pay the initial fees – if there are any. In practice, it means that almost anyone can afford to create an affiliate marketing strategy and run the first campaign without any major costs whatsoever.

  • Approaching a brand new audience group

If you are a well-known online retailer who needs to expand the customer base, then affiliate marketing may as well be the finest solution for your business. How come?

Instead of spending days and months creating relevant content on your own, you can simply hire someone else to do it on your behalf and promote your products or services.

More often than not, affiliate marketers are experienced content creators with established and loyal followers, so you can expect them to bring you closer to the verified leads almost instantly. It’s a quick fix for e-commerce stores in need of fresh shoppers.

  • Unprecedented return on investment

By far the best thing about affiliate marketing is its unprecedented return on investment (ROI). The tactic guarantees to earn you a lot of money because there’s nothing in it to lose. Keep in mind what we said about it already – affiliate marketing is a low-cost investment.

Apart from that, don’t forget that you only pay for what your affiliate partners really deserve. Instead of wasting time and money on suspicious and uncertain campaigns, you can grow revenue through trustworthy publishers.

You only pay them for the actual product sold over their affiliate links, so it’s easy to calculate commissions and put the rest of the money in your pocket.

The disadvantages of affiliate campaigns in e-commerce

affiliate marketing

The disadvantages of affiliate campaigns in e-commerce. Source: unsplash.com

You’ve seen the pros of affiliate marketing in e-commerce, but that’s just one side of the story. We can also name a few disadvantages, too, so let’s check them out here.

  • Short-term results

Affiliate marketing is almost always a limited-time project. Unlike search engine optimization, it offers you an almost instant traffic spike, but it doesn’t solve your sales issues in the long run.

For instance, an affiliate partner may publish a post about one of your products and earn a lot of attention, but the popularity fades as quickly as it emerges. If you are looking for a sustainable marketing strategy, you should search for other solutions or at least combine affiliate campaigns with other promo mechanisms.

Besides that, you probably don’t want to give up on a substantial portion of the margin with every purchase conducted through the affiliate’s content. A much more reasonable choice is to focus on your own marketing efforts and keep all the money for yourself.

  • Choosing the right affiliate partner

Thousands of publishers operate globally but don’t think it’s easy to choose the right affiliate partner for your campaigns. On the contrary, most e-commerce stores are struggling to find affiliates who precisely match the brand and the targeted product.

For instance, you cannot expect a renowned B2B publisher to impress younger audience groups and encourage them to purchase your products. On the contrary, it takes a younger affiliate partner who knows how to approach lookalike consumers.

This style-related feature of affiliate marketing is what slows down a lot of campaigns.

  • You lack control
affiliate marketing

Affiliate marketing is one of the fastest-growing industries worldwide. Source: unsplash.com

Although you make a general agreement with the affiliate and give the basic instructions, the bottom line is that online retailers lack control when it comes to campaign execution. From the moment you make the agreement with the publisher, it is all up to their knowledge, skills, and content creation prowess. You can only watch and hope that the strategy works.

  • Fraudulent activities

Fraudulent activities are not something that happens too often in the e-commerce industry, but it’s not unusual to see digital criminals trying to scam merchants and their affiliate partners. How come?

Well, hackers can steal affiliates’ links and redirect financial transfers in order to make money on your behalf. In such circumstances, it is always better to opt for a reliable affiliate marketing platform and use a strong security system to protect the business from possible incidents.

  • It requires continuous monitoring and communication

Finally, you should keep in mind that affiliate marketing campaigns require continuous monitoring. You don’t control the publishing process, but you must always be ready to react just in case you don’t like the current look of the campaign.

In this case, you need to communicate changes and get in touch with the affiliate partner once again, which can be a big burden and take you a lot of time altogether.

The bottom line

Affiliate marketing is one of the fastest-growing industries worldwide – and for good reason. The strategy is performance-driven, which means that you only pay for what you get.

Although it has a few downsides as well, the bottom line is that affiliate marketing can do miracles for e-commerce stores if they choose their affiliates properly. Keep our tips in mind and you’ll see soon enough that online retailers can benefit seriously from affiliate marketing campaigns.


Alice Jones is a full-time digital marketer and a part-time blogger from San Francisco, CA. Apart from that, Alice is also contributing to several thesis writing services and online assignment help agencies. She is a passionate traveler and a dedicated yoga practitioner.


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