Have you considered how shopping habits have changed during the past few years? Many of us now expect to see online links to products as we scroll through social media posts, blog posts, or web pages. Consumers increasingly use these referral links, known as affiliate links, to shop—especially when they come from trusted companies, creators, and brands.
The affiliate marketing industry is expected to reach $13 billion in revenue in 2022—almost twice the level of 2017. Here’s how you can also unleash the benefits of affiliate links in your own marketing efforts.
What is an affiliate link?
An affiliate link is a URL, or a web address, that directs the reader to a webpage, usually a webshop, for an advertised product or service.
When an affiliate partner—that is, the website or influencer posting the link—signs up for a business’s affiliate marketing program, they receive a unique link to the business’s website. The link contains the affiliate partner’s ID, enabling tracking. When a user clicks on the link, it’s attributed to the affiliate partner, allowing the business to record the source of the traffic.
What is affiliate marketing?
Affiliate marketing is a referral marketing technique in which affiliate partners earn a commission by promoting a product or service for a business—typically a retailer—through affiliate links. The company rewards the affiliate partner with a payout for providing specific results, like clicks and conversions (i.e., when website visitors become paying customers). Affiliate marketing can occur through various channels, including video content, email marketing, blogs, and podcasts.
What is an example of affiliate marketing?
Imagine an affiliate partner, a blog called Coffee Knowhow, signs up for Redwood Roasters’s affiliate marketing program. Coffee Knowhow is assigned affiliate links, which might look something like the following in its online article about coffee brewing (with each link leading to Redwood Roasters’ respective product):
We tried different settings on the Redwood Precision Brewer, first with the pre-ground Redwood Mocha Blend, then with the whole bean Redwood French Roast Blend.
Coffee Knowhow’s content organically promotes a coffee maker and two kinds of coffee within a broader blog post. Affiliate marketing relies on the reader’s curiosity about the products mentioned and provides direct links to the ecommerce store.
When the affiliate partner, Coffee Knowhow, posts this content on its curated and well-trafficked blog, Redwood Roasters might receive 10,000 clicks per month on these affiliate links. Redwood Roasters’ affiliate system might offer their affiliate partners, for example, an 8% commission for new customers, 4% for returning customers, and $10 for every subscription purchased through the affiliate links, producing a decent payout for Coffee Knowhow.
Why engage in affiliate marketing?
Affiliate marketing is an effective way to strategically and organically expand your customer base. Its many potential benefits for your business include:
Benefits of affiliate links
- Authenticity. Affiliate marketing can feel authentic to your customers because they’re likely clicking on an affiliate link through a website or source they already trust. Affiliate marketing, therefore, reduces the time it typically takes to build trust with customers by bringing in a mutual friend—the affiliate partner.
- Projected growth. Affiliate sales numbers are likely to grow. One study found that since 2020, as much as 30% of shoppers made purchases from new brands through affiliate links. According to another study, more than 80% of large US companies used affiliate marketing for product promotion and allocated more than 10% of their marketing budget to these programs.
- Accountability. Working with affiliate partners can provide unprecedented access to sales metrics and data. This information can help your online business refine its marketing campaigns and target and increase website visitors.
- Mutuality. Affiliate marketing is beneficial for all parties involved. It allows businesses and affiliate marketers to build revenue—the business benefits from increased traffic, while the affiliate marketer earns money through commission. It also gives consumers an easy link to the affiliate marketing products and services they’re reading about.
- Ease of use and efficiency. You can start affiliate marketing with very little legwork or overhead costs, making it a great return on investment. There’s no need to hire an advertising firm or purchase advertising space. Instead, you can rely on your affiliate partners to market your physical products or services for you—and you only pay your affiliate partners when they successfully direct consumers to purchase your product or service.
- SEO improvements. Using affiliate links boosts search engine optimization (SEO) since other websites link to yours, which sends positive signals to Google about your site’s relevance. In turn, increased search traffic can drive more people to your website. Established affiliate partners are in the business of generating current, easy-to-find content, and likely know how to rank highly on search engines.
How to make affiliate links
Steps for implementing affiliate links
Affiliate marketing can increase your business’s visibility and help generate new revenue. However, it requires a few steps. Here’s how to make your own affiliate link:
1. Join an affiliate platform
Affiliate platforms—also known as affiliate management apps—help streamline the creation and management of affiliate links and serve as the intermediary between you and your affiliate network. Affiliate sites like Amazon Associates, Rakuten, and Refersion specialize in helping businesses create affiliate programs. Some affiliate platforms provide a pool of vetted affiliate partners, while others allow you to source your own. It’s worth researching the various features and benefits. The Shopify App Store offers platform options.
2. Log into your affiliate dashboard
Log into your affiliate management app and open the dashboard to access your affiliate program. Here you can post information about your affiliates’ onboarding, sales, products, and affiliate campaigns; generate links; find new affiliates to work with; and study metrics and data.
3. Add affiliates
Browsing the platform’s database lets you find new affiliates for your own affiliate program. Affiliate management apps can provide large affiliate networks. Search by name and niche to select affiliates you think are suitable ambassadors for your products or services. The affiliates you choose to work with have access to an affiliate dashboard to keep both parties aligned on your affiliate marketing strategy.
4. Create an affiliate link
From your affiliate dashboard, create unique affiliate links for all your affiliates, and give your links descriptive names according to the product or service you’re advertising. Some affiliate platforms let you create SubIDs that direct customers to specific features or places on your website, such as custom-designed landing pages. Each affiliate link is associated with a cookie (internet name tags that allow websites to recognize you) which can be traced back to the associated affiliate.
5. Customize the URL
Many affiliate platforms allow you to customize your affiliate link URLs. Most auto-generated URLs are random strings of letters and numbers. Customizing your affiliate links means you can make them more memorable for customers (and less complex). For example, the Amazon affiliate program generates a custom URL product link for each affiliate in its program. While this isn’t a necessary step, it can be a nice touch for your affiliates and their readers.
6. Define the promotion
After creating unique links for your affiliates, determine a promotional structure to motivate your affiliates and your potential customers. This could entail anything from tying links to promotional discounts or giveaways to garnering more followers on your social media platform. Experiment with your commission structure to find the proper return on your investment. The Federal Trade Commission (FTC) requires affiliate partners to disclose their connection to your product or service.
Note: If you don’t have the time or capacity to manage your own affiliate program, consider hiring an affiliate manager to oversee your affiliate campaigns. They can recruit new affiliates, manage onboarding, and provide customer service on your behalf.
Making affiliate links FAQ
How much do affiliate programs cost?
The initial startup costs for joining an existing affiliate network can range between $500 to $2,000, depending on the network size. Networks also generally charge a transaction fee based on a monthly minimum number of transactions.
How much do affiliate links make?
Affiliate marketing programs vary in the incentives offered to their affiliate partners. Some pay a specific dollar amount per sale, while others provide a percentage; some affiliate programs only compensate with free or discounted products. For example, Amazon affiliates earn 1% to 20% of each sale, generating passive affiliate income.
Do affiliate links pay per click?
Affiliate links rarely pay per click. What matters is what happens after a customer clicks on the link. Affiliate programs are more likely to pay sales commissions, though some pay per action, such as subscribing to a newsletter. Other affiliate programs use different payment models, such as paying per install (when a customer downloads an app).
For example, Canva offers up to $26 for each new subscriber who signs up through an affiliate link. Based on the product category, Amazon’s affiliate program pays anywhere from 1% to 10% commission for each sale generated through an affiliate link.