Member Avatar for Shoryuken

Of growing importance to companies involved in e-commerce is the use of affiliate programs.

Building a successful affiliate program can be of tremendous help to a company.

If you were running an e-commerce company, how would you tackle the idea of an affiliate program? Would you do it for sure or maybe not. Would you want to do it in-house or hire a 3rd party?

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A practical way to decide whether and how to run an affiliate program is to treat it like any paid acquisition channel: test small, measure unit economics and customer value, protect the brand, then scale. Building on points raised by , , and , the short checklist below focuses on decision criteria and concrete actions you can apply immediately.

  1. Financial feasibility — compute contribution margin per order (price minus COGS, shipping, payment processing and variable fulfillment). Translate allowable acquisition spend into a per-sale or per-lead commission cap that still covers expected returns and targeted profit.
  2. Channel fit — match partner type to your sales model: consumer, review-friendly and repeat-purchase products are easier to monetize via affiliates than long B2B sales or products needing heavy onboarding.
  3. Tracking and risk controls — pick reliable attribution (server-to-server postbacks, voucher codes, or order-ID matching), set cookie life and a withholding period for returns, and put fraud rules into the terms of service.
  4. Pilot and KPIs — run a 30–90 day test with a small, vetted cohort and measure attributed revenue, conversion rate, average order value, return/chargeback rate and net margin after commissions. Use those results to decide scaling.

On in-house vs third-party: networks speed discovery, payouts and some fraud tools but add fees and reduce direct control; in-house gives full control and better margins but needs tech, tracking and admin. A common approach is an in-house pilot, use networks to recruit partners, then convert top performers to direct deals.

Operational tips: pre-approve partner sites and creatives to protect traffic quality (addresses ’s concern), require clear disclosure per local ad rules, withhold payouts through the returns window, use tiered incentives for high-quality partners, and audit traffic sources regularly. Treat the program as a measurable channel — if the pilot does not deliver sustainable net ROI, redeploy the budget.

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Member Avatar for stymiee

Affiliate programs can be helpful but definitely aren't a must. Especially if you have a low margin. Now if your markup is very high it's easy to throw a decent chunk of change ($5 - $20 or more) at an affiliate as a strong incentive for them to send business your way. Having people motivated to send business your way using their own resources is a plus but don't do it at the expense of a tight margin.

Member Avatar for Shoryuken

I can't argue with that. There are definitely variables involved. The more profit you make on each unit sold the more you can put back into gowing the company.

Member Avatar for Apache4111

Of growing importance to companies involved in e-commerce is the use of affiliate programs.

Building a successful affiliate program can be of tremendous help to a company.

If you were running an e-commerce company, how would you tackle the idea of an affiliate program? Would you do it for sure or maybe not. Would you want to do it in-house or hire a 3rd party?

Affiliate programs have their place in Ecommerce. What you have to consider is whether you can afford to devide your profits... If you are selling a product and makeing only 10% profit over cost, are you going to give away 5% of it. You are going to realize that Lots of Affiliates use questionable methods to get your banner or text link out to the public in general and that probably 75% of the unique customers they send you are not going to be the least bit interested in buying anything. Remembering this how does your web host handle bandwith usage, are you going to be charged more for your website if your traffic picks up. There are a lot of things to consider before jumping in to having affiliates.

I'm not saying affiliate programs aren't good. I use them constantly, but as an affiliate not a merchant... I have affiliate banners all over my websites and usually have at least one in any chat I engage in. My results with them are good... I usually make 2.2 times more off of my affiliate sites than I make off of sales each month. A lot of this is residual income... (someone joined something last January and I still recieve a % of their monthly fees ) I do investigate any company I affiliate with and would not offer a banner for a site I wouldn't do business with.

In the end it's your choice. If you decide you can use the traffic, and can afford to split your profits, an affiliat program is the way to go... If you are like me and work on a shoestring budget .... I wouldn't do it... after all it is just another marketing tool and like others it isn't necessary if you have something else that works.

Member Avatar for tgreer

Am I seeing another venerable and respectable term being hijacked? I've been an e-commerce developer since there was a web, and have never needed an "e-commerce" application to carry ads or have affiliates, etc.

An e-commerce application is any web-enabled application that is integrated with the normal business operations of a company. An e-commerce application need not even have a user interface or be tied to a "web site".

So my answer to the question is that Affiliate Programs are largely irrelevant to the vast majority of successful e-commerce applications.

Member Avatar for aditd

For sure and probably 3 party ( this would reduce the cost of time and money doing it for myself )

Member Avatar for pgmco

I think they could certainty help. In some companies it is not needed. It really depends on the type of ecommerce shop.

Member Avatar for tnkleathers

It's great thing but requires money for promoting your affiliates program to as majority people join amazon's affiliate's program

Member Avatar for Joshsn

Affiliate programs are not a must but they are one way of earning additional income. It depends on the market niche one is involves in.

Member Avatar for allyson_gss

It depends actually if your product is really selling and you have high revenues, then you can venture to affiliate program. Aside from getting more exposure you will also be sharing profit for this affiliates.

Member Avatar for joshtimber

I don't think now affiliate programs are of any use. Earlier it was good but not now.

Member Avatar for rocco88

Affiliate programs are ok. You can make $ with them.

Member Avatar for 88dbsakthi

There are not not mandatory but its an value added tool.Recommended to integrate with.
Its not only for sales conversion but to attract natural link juice

Member Avatar for Hugo123007

you probably know about affiliate programs. The basics of affiliate marketing is based on revenue sharing. A company that sells stuff online establishes an affiliate program so that marketers can help promote the products.also,online which is based on electronic mode.

Member Avatar for Jashandeep

Affiliate Programs are not necessary ,but yes if you do so it will give a good results.

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