Affiliate Marketing Opportunities for Dropshipping

Affiliate marketing tips for your e-commerce store

Running an online store can be a real challenge at times. Not only do you have to choose the right products in order to effectively meet customer demand, but you also have to get your name out there so that people can find your store. If no one knows your store exists, then they won’t ever buy anything! This is how affiliate marketing for dropshipping can make a significant difference for online retailers.

What Is Affiliate Marketing?

According to marketing expert Pat Flynn, affiliate marketing can be formally defined as “the business model of earning affiliate commissions by promoting products from other companies.”

In the simplest terms, you have affiliates market your store and then in turn compensate them in some way. This compensation is usually affiliate commissions, but you can also offer the affiliate a discount at your store. Affiliate marketing is a kind of performance marketing and may also be referred to as a cost-per-action (CPA) model.

This business model can be broken down into the following components:

  1. Advertiser. Your e-commerce store has products to sell and you choose to advertise them via the affiliate marketing model.
  2. Affiliate. This is someone who does the actual promotion online. They are also known as partners or publishers. 
  3. Affiliate network. This is the potential intermediary between you and the affiliate. Your affiliate will have access to your wide variety of products and can then choose how to market them to potential customers. However, if you decide to use an affiliate network, then you are usually required to pay some kind of entry fee to have access to that network.
  4. Customer. This is the visitor to the affiliate’s website who follows an affiliate link and lands at your e-commerce store. Once you have them in your store, you will have to turn them into a paying customer.

The most common affiliate networks are ShareASale, FlexOffers, or Rakuten Marketing. However, many online retailers opt out of using a preexisting affiliate network in order to cut down on costs. You can choose to build your own affiliate marketing network by using various Shopify apps that automate this process.

Affiliate Marketing Versus Traditional Marketing

Affiliate marketing is done entirely online

In order to truly understand affiliate marketing for your dropshipping business, it is useful to consider how it compares to more traditional methods. Many companies continue to use the following traditional methods:

  1. Newspapers
  2. Radio
  3. Television
  4. Printed material (sometimes known as collateral materials)
  5. Advertisements in public spaces (like billboards)

However, these marketing methods are limited because they are expensive and it is difficult for the company to determine if they are effective. For example, have sales actually improved due to the advertising? Furthermore, if multiple methods were used, which one was the most effective?

The nature of affiliate marketing, however, means that it is easy to track data and see how much traffic is generated to the e-commerce store. This is done via an affiliate link, whereby a potential customer is funneled to your store from an affiliate’s website.

Furthermore, you can precisely monitor this traffic through the use of cookies, which can provide you with the following information:

  1. Tracking clicks
  2. Conversions
  3. Overall return on investment (ROI)

Consequently, affiliate marketing is unique in that it allows you to track all the data you need for you and your affiliates. This means that you can craft marketing strategies that drive traffic and boost your profit margins.

The Benefits of Affiliate Marketing

Affiliate marketing will help drive traffic to your dropshipping store

Affiliate marketing and dropshipping have a variety of pros for online retailers who wish to generate a profit. These include:

  1. Low costs for affiliates. Because companies like Clickbank or Amazon Associates cover administrative costs, your e-commerce store should do the same for your affiliates. Ultimately, this is what will make it an attractive proposition for them and entice them to work with you. Furthermore, let your affiliates know that they will be responsible for website and server costs. You can always remind them that these are business costs, so they can likely write them off come tax season.
  2. Great source of passive income. This is one of the primary benefits of affiliate marketing for both you and your affiliates. Remember, if you are operating a dropshipping store, then neither you nor your affiliate has to worry about creating or shipping a product. Your affiliate will be responsible for sending highly targeted traffic to your store while you offer these potential customers a wide variety of products at competitive rates. Doing so will ensure that you increase your conversion rate.
  3. Customer support is not your responsibility. In this marketing and business model, your affiliates are essentially providing you with sales leads. It is your responsibility to capitalize on these leads.

As you can see, affiliate marketing programs have become exceedingly popular in online retail. It is a simple and effective means of generating a passive income.

Affiliate Marketing Tips

Working closely with your affiliates is crucial. Remember, this is a symbiotic relationship; you both benefit if the system is working properly. Consequently, you should:

  1. Develop guidelines for your affiliates to follow. When considering traffic to your e-commerce store, remember that quality trumps quantity. In other words, make sure your affiliates are sending you high-quality traffic.
  2. Choose the right form of compensation for your online store. Affiliate commission rates vary quite a bit – for example, Amazon can provide its affiliates anywhere from 1 to 10% commission. This most frequently depends on the type of product being sold. However, if you choose, you can also offer your affiliates discounts in lieu of commission payments.
  3. Develop a tiered affiliate program. If you decide to use affiliate commissions, you can offer various tiers for high-performing affiliates. Set milestones for amount in sales and if they reach them, offer them higher rates. This will provide incentives to your affiliates.
  4. Involve your customers. You can use various strategies to connect with customers and get them involved. For example, you can use the FriendBuy app to get your customers to refer their friends and get paid $15 for every sale. You can also entice new customers by offering a 15% discount if they go through their friends’ links.
  5. Use coupon affiliate sites. You can use sites like Ebates or Coupon Craze to share discount codes with your customers in exchange for commissions to the brands. Of course, you will have to determine which discounts and affiliate rates will keep you profitable.

As an online entrepreneur and retailer, you have the ability and freedom to build your network as you see fit. Conversely, you could also pay a little extra to tap into a preexisting affiliate network.

Common Mistakes to Avoid in Affiliate Marketing

Boost your online sales by working with affiliates

Implementing these affiliate marketing tips is an excellent way to increase your passive income and develop a successful e-commerce store. However, your affiliates may make mistakes that hurt your bottom line. Consequently, you should ensure that they avoid:

  1. Going over the top with requests and bombarding customers with promotions or information. No one likes to be overwhelmed with sales pitches!
  2. Promoting products in irrelevant user groups or forums.
  3. Not taking advantage holidays or special occasions to offer the proper promotions or coupons. It is vital that you and your affiliates capitalize on every opportunity to drive traffic to your e-commerce store!
  4. Not spending enough time researching and finding the proper target audience. Encourage them to pay attention to their target markets.
  5. Failing to verify that the potential customers trying the products have all the necessary information. Consumers like to be informed and know precisely what products are being referred to them.
  6. Not paying enough attention to their social media presence.
  7. Failing to properly implement SEO strategies for their website copy or blogs. On the other hand, always be sure that you are providing them with the best keywords possible – this means doing your research too!

Any of these mistakes can decrease traffic to your e-commerce store. Furthermore, it is crucial that all your affiliates understand that building a network takes time. Remind them that they need to be patient and to not give up during the initial phases of being an affiliate.

Affiliate Marketing and Dropshipping

When implemented properly, affiliate marketing can be an absolute boon to your dropshipping store. These strategies can drive higher rates of sales, increased brand awareness, and even develop trust with your customers. These are all crucial parts of making money in online retail! Furthermore, you can make informed decisions by tracking affiliate links – you can your e-commerce store with hard data and concrete information.

Marcin Ossowski is a writer based in Los Angeles, California. At GreenDropShip, he writes about e-commerce, lending his expertise to online retailers and entrepreneurs on how to best drive sales and market their online stores. In his downtime, Marcin spends a lot of time outdoors and is actively pursuing his passion for writing fiction, creative nonfiction, and satire.