Effective Affiliate Marketing for Small Businesses

November 30, 2016 • 8 min read
Ahmad El-Najjar

Ahmad El-Najjar


You’ve probably seen a headline (or two) telling you that affiliate marketing can be a great passive income stream or gotten promotional emails asking if you want to earn more money from affiliate marketing. It’s a term that comes up a lot in the world of small business, yet precisely what affiliate marketing is, or why you should you care, remains something of a mystery for many folks.

Generally, regardless of whether you offer goods or services in your business, you can think of affiliate marketing simply as a way to promote your business on another platform, while the promoter takes a cut of any sales that originate directly from that platform.

You may already be using affiliate marketing. If, for example, you sell goods on Etsy or Ebay, you’re engaged in affiliate marketing. If you’re a member of a local chamber or professional organization that charges a fee and lists your business, that’s affiliate marketing as well.

Affiliate marketing typically involves three main actors: the merchant, the affiliate, and the customer. For you small business owners, we’ll focus primarily on the role of the merchant.

Merchant affiliate marketing

Who is the merchant in affiliate marketing? It’s the person originally selling the product or service. The merchant is the one actually producing or holding the particular good, whether that good is physical, like a pair of skinny jeans, or a service, like a personal trainer or medical expert. The merchant is the maker and gatekeeper of the good on offer.

Who is the affiliate?

An affiliate is a person or company that doesn’t make or provide the product, like Etsy and Ebay, for example, but who promotes it and connects customers to the good. Neither of these companies actually makes a product a customer can buy directly. They simply act as a clearinghouse for sellers across the world.

We’ve all heard of Etsy and Ebay, but where the affiliate magic really happens is with the smaller niche companies that do marketing work to promote your goods and services, and then take a cut of the sale. The best way to illustrate this is through customer experience.

Affiliate marketing: The customer experience

garmentory listing edThe web site Garmentory has made it their business to appeal to retail fashion boutiques. The site provides a good example of how customers and businesses benefit from affiliate marketing.

As a customer interesting in buying a men’s jacket, for example, I’m able to go to their site and browse hundreds of items. When I see one I like, say Harden jacket from Portland boutique Bridge & Burn. I can click to purchase. But, the thing is, I’m not actually purchasing the item from Garmentory, but rather through them, from Bridge & Burn. Every single item on Garmentory has actually been uploaded and made available by a unique boutique retailer.

When I click to order and pay, Garmentory sends a notification to the boutique owner that I have purchased an item they listed. The boutique owner will then mail me my order and Garmentory will pass on the money I paid at checkout, minus 10 percent of the sale price.

Essentially, what companies like Garmentory do is make an attractive and easy-to-use portal so that a customer like me can look at hundreds of designers and shops all in one place. And, that’s why they take a cut of the sale.

garmentory jacketHow does this help you, the boutique business owner? If you’ve spent any time on search engine optimization (SEO) for your site, you know the likelihood of my coming across Bridge & Burn’s jacket through a Google search for “men’s jackets” is desperately small. Garmentory offers a more effective top-of-funnel than most small businesses can.

garmentory bridge and burn smallThe above is an example of how affiliate marketing works in general for any business. An affiliate marketer essentially creates a space where your goods and services are more easily accessible and positively presented to potential customers so your products convert to sales. That typically includes some charge to you for this service.

Now we know what affiliate marketing is and how it works, the next question is, how do you find the right affiliate marketing opportunities for your business?

Finding affiliate marketing opportunities

Google “affiliate marketing” and you’re going to get hundreds of useless tips from affiliate marketers all trying to cash in on you and your product. Let’s save you some trouble.

Before you search for the right partner to increase sales, you need to ask yourself three questions: What am I selling, who is promoting it, and how niche should I get?

For the first question, you’ll want to think about which of your products or services are semi-exclusive to your business, whether it’s your own clothing line, a type of yoga you offer, a medical or legal specialty, trade service, or food. You’ll need to understand what makes you stand out and why your current customers love you.

business servicesFrom here, you’ll want to do an online search for that particular good or service that makes you stand out from the competition. For example, if you’re a plumber in Portland, Oregon, search for “best plumbers in Portland” on the old Google and you’ll get something like these results.

Anything jumping out? Take a look at what comes up after Yelp: Home Advisors. Turns out that that site is, you guessed it, an affiliate marketer. If our plumber visits that site, sure enough there is an option to register with them—and no doubt, there’s a little fee associated with doing so. But, Home Advisors is a site that thousands of people trust, so their referrals to our plumber friend are more likely to translate into solid sales.

You can do this kind of search with whatever service or good you’re offering, and get some great leads on affiliate marketers that are looking to partner by offering your services or goods.

One way to take this kind of search to the next level is by getting niche in your search. Let’s say you’re looking for a marketer. You, the potential customer, might have a specific (and urgent) need, and be searching for “best freelance content marketer.” When you throw this in Google, you get something like this second set of results.

freelancer marketIn a generic “best freelance marketer” search, the freelance site Cloudpeeps didn’t come up. But they do show up in a specific search, like “content marketer,” suggesting a depth and expertise that the more general “marketer” you find might not have.

So, it’s worth doing both kinds of searches: see what people looking for your specific product or services will find, as well as what comes up in a more general industry search. If you can find an affiliate marketer you trust that shows up in both specific and general searches, so much the better.

More places to find affiliate marketers

While places that are directly and actively connecting you with potential customers are always worth your time, don’t miss out on other opportunities for affiliate marketing. Blogs or news sources can also be great sources of motivated customers.

Sites with articles like “10 best platform boots this fall” or “Best Brooklyn personal trainers” are places where your shoe shop or training expertise would get in front of customers looking for precisely those things. Most articles of this sort are sponsored content, meaning a business paid the writer or website to feature their product. Be sure to research articles and writers that feature products or services related to your business and reach out them.

And remember to always negotiate the cost of the services you request from an affiliate marketer because the fact is, you have choices!

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