I've just launched an affiliate program and I need help defining the offer

Hi guys,
I've just launched a new business trading ecommerce business supplies and related services with a friend, and we're trying to define an affiliate offer that is clear and competitive.

Having never launched an affiliate campaign before I wanted to ask some of you seasoned pros on here if the offer is attractive enough to generate interest and that it makes sense/is clearly defined?


Basically the breakdown goes like this...

Affiliates are paid on each new membership they generate through their sign up link, and we also offer them a unique 10% off discount code to send potential customers our way to try our service before signing up:

Yearly Membership
40% commission on first year.
£159.60 payout per member

Monthly Membership
50% + 30% Recurring commission for 12 months.
£20 first month, £12 x 11 months = £152 payout per member (max 1 year)


Now I don't know if that's low-balling it? As an affiliate - what would you expect?

To summarise the business, potential customers will become a member to unlock upto 12% discount on top of volume discounts across our product range on our website, our standard prices are already extremely competitive (in some cases we're 30% cheaper than competition like for like without the membership discount on top of that) - and our 12% membership discount makes us one of the best value providers on the market.

We make barely any margin at higher volumes, but we plan to make money on membership fees and higher volume deals in the future - basically our business model benefits small-medium businesses (who are currently being robbed at market prices), and our membership will allow them to pool their demand so that we can negotiate cheaper per unit rates on on things like packaging, shipping, 3PL costs and machinery direct with manufacturers).

I'd offer affiliates % of actual product sales, but as there's no margin I don't think this would be an attractive offer.

Thanks in advance for any feedback and advice.

ED

Affiliates are primarily interested in proof there is demand, your landing page converts and your offer sells.

Out of theose options neither would appeal to me.

If i brought a client to a subscription service i would expect a % of their subscription fee for as long as they remain a subscriber, not just year 1.

GringoMonkey said:

Affiliates are primarily interested in proof there is demand, your landing page converts and your offer sells.

Out of theose options neither would appeal to me.

If i brought a client to a subscription service i would expect a % of their subscription fee for as long as they remain a subscriber, not just year 1.

Click to expand...

OK that's great feed back thank you, so ongoing % cut of revenue. I do not think 40% year on year is sustainable for our model, so how would the below look to you?


Yearly Membership
40% commission on first year.
20% yearly thereafter
£159.60 payout per member year 1
£80 yearly.

Monthly Membership
50% + 30% Recurring commission for 12 months.
£20 first month, £12 per month ongoing for length of subscription.


Re. sales volume, I used to work as Head of Ecommerce for a business that was considered a very small player in the same sector, and we turned over £1.6million in online revenue and £13million in high volume DTC sales (40% YoY growth since 2016), it's a huge and ubiquitous marketplace selling product that basically every ecommerce business needs, and I am confident when it's up and running sales will come in (we're building out multipe platforms, google shopping and search ads, a lead gen funnel using videos and layered remarketing stack across Facebook and Google, and various external blog remarketing tools, and we've negotiated a monthly marketing budget with our top manufacturer to cover our media PPC spend [we'll just build out the campaign ourselves]). Also we have an amazing copywriter (literally works at Cambridge university) who we're working on implementing a solid content strategy with.

It's just the affiliate side that I have poor confidence in, but I do know it's value and that if we get it right it has the potential to be a major channel for growth for our business.

ext_digi said:

Hi guys,
I've just launched a new business trading ecommerce business supplies and related services with a friend, and we're trying to define an affiliate offer that is clear and competitive.

Having never launched an affiliate campaign before I wanted to ask some of you seasoned pros on here if the offer is attractive enough to generate interest and that it makes sense/is clearly defined?


Basically the breakdown goes like this...

Affiliates are paid on each new membership they generate through their sign up link, and we also offer them a unique 10% off discount code to send potential customers our way to try our service before signing up:

Yearly Membership
40% commission on first year.
£159.60 payout per member

Monthly Membership
50% + 30% Recurring commission for 12 months.
£20 first month, £12 x 11 months = £152 payout per member (max 1 year)


Now I don't know if that's low-balling it? As an affiliate - what would you expect?

To summarise the business, potential customers will become a member to unlock upto 12% discount on top of volume discounts across our product range on our website, our standard prices are already extremely competitive (in some cases we're 30% cheaper than competition like for like without the membership discount on top of that) - and our 12% membership discount makes us one of the best value providers on the market.

We make barely any margin at higher volumes, but we plan to make money on membership fees and higher volume deals in the future - basically our business model benefits small-medium businesses (who are currently being robbed at market prices), and our membership will allow them to pool their demand so that we can negotiate cheaper per unit rates on packaging with manufacturers).

I'd offer affiliates % of actual product sales, but as there's no margin I don't think this would be an attractive offer.

Thanks in advance for any feedback and advice.

ED

Click to expand...

You have a great idea. And as this is a great exercise for my brain, I will take a bite.

Here's the tip.

Most affiliate programs are like the proverbial carrot and the donkey.

So, you have to offer something huge, $150 per member who signed up with credit card, verifiable mobile number, KYC etc.

Most people are worried about money, but not time.

And that's the secret.

You can offer a net 90 days payout after the month the sale was made.

And bearing in mind the power of money, you can use this as a marketing point to scale your business before the time rolls around.

So, basically what you are doing is, they get paying customers who pay you $xx per month, and those people can be up sold infinitely on more related offers, then they have a lifetime value of 6-12 months.

In the end, you will be making serious amounts of money at the EXPENSE OF TIME if you have a great marketing experience.

A perfect example of mouth watering affiliate program is Fiverr offering $150 per refferal.

Castamir said:

You have a great idea. And as this is a great exercise for my brain, I will take a bite.

Here's the tip.

Most affiliate programs are like the proverbial carrot and the donkey.

So, you have to offer something huge, $150 per member who signed up with credit card, verifiable mobile number, KYC etc.

Most people are worried about money, but not time.

And that's the secret.

You can offer a net 90 days payout after the month the sale was made.

And bearing in mind the power of money, you can use this as a marketing point to scale your business before the time rolls around.

So, basically what you are doing is, they get paying customers who pay you $xx per month, and those people can be up sold infinitely on more related offers, then they have a lifetime value of 6-12 months.

In the end, you will be making serious amounts of money at the EXPENSE OF TIME if you have a great marketing experience.

A perfect example of mouth watering affiliate program is Fiverr offering $150 per refferal.

Click to expand...

Thanks for feeding this back to me, so would you say that my original offer is solid then? In the case of an affiliate would be pretty much guaranteed $206 for each new member that signs up?

One point I forgot to mention is we're the only player in our sector with a membership model, and it perfectly aligns with market pressures affecting small businesses on price per unit (become a member = combined economies of scale / volume buying power with other members = low per unit cost).

I also know the minimum audience size is at least 322,000 in the UK alone (basically anyone who sells stuff for a living online), and we're gearing up to ship our product (and therefore our membership model) out to the USA later this year.

Without seeing your site and exactly what you do it is tricky to tell. But if you can afford 50% commission in month one, why not ongoing?

What is your cost per subscriber on your paid ad campaigns?

Ultimately a few whales will bring in most of your subscribers, the 80/20 pareto rule and they are the ones who when they see their campaign is profitable scale the shit out of it. As you are new you will have to entice them in.

If you made me wait 90 days for payment as castamir suggests i would not work with you either. Unless you offer a 30 day refund period / free trial, i would expect payment within 2 weeks.

ext_digi said:

Thanks for feeding this back to me, so would you say that my original offer is solid then? In the case of an affiliate would be pretty much guaranteed $206 for each new member that signs up?

One point I forgot to mention is we're the only player in our sector with a membership model, and it perfectly aligns with market pressures affecting small businesses on price per unit (become a member = combined economies of scale / volume buying power with other members = low per unit cost).

I also know the minimum audience size is at least 322,000 in the UK alone (basically anyone who sells stuff for a living online), and we're gearing up to ship our product (and therefore our membership model) out to the USA later this year.

Click to expand...

That's a big yes, I believe your idea is great like I said in the beginning.
Most importantly, follow your gut and always be testing.

GringoMonkey said:

Without seeing your site and exactly what you do it is tricky to tell. But if you can afford 50% commission in month one, why not ongoing?

What is your cost per subscriber on your paid ad campaigns?

Ultimately a few whales will bring in most of your subscribers, the 80/20 pareto rule and they are the ones who when they see their campaign is profitable scale the shit out of it. As you are new you will have to entice them in.

If you made me wait 90 days for payment as castamir suggests i would not work with you either. Unless you offer a 30 day refund period / free trial, i would expect payment within 2 weeks.

Click to expand...

We're start up, so will be reinvesting everything we make for the first 12 months at least. And memberships is where we'll be supplementing our extremely low product margin, so giving away 50% of our profits indefinitely is a bit of a hard pill to swallow and will slow down business growth. With that being said the landing page does have a line about the offer being negotiable depending on affiliate reach, site domain authority and their track record.

Payment is immediately after the monthly reports are in, and affiiates have a dashboard where they can track performance. (payouts are manual via paypal or bank transfer).

Of course if a whale we're to come on board with us we'd be happy to talk bigger numbers.

Castamir said:

That's a big yes, I believe your idea is great like I said in the beginning.
Most importantly, follow your gut and always be testing.

Click to expand...

Thank you for your words of encouragement

Another question comes to mind - where best to advertise an affiliate offer? Are platforms like clickbank and shareasale still relevant?

I mob around Clickbank sometimes, but in my opinion the offers that are real aggressive doesn't "fool" most people.

Im thinking like digital marketing guru/coaching stuff

ext_digi said:

giving away 50% of our profits indefinitely is a bit of a hard pill to swallow and will slow down business growth.

Click to expand...

It really depends on how much it costs you to bring in customers by yourself. If you cannot do that you wont have any business growth

Dont get me wrong i think you have a really neat idea. But to be successful it will all be about volume and it will also depends on who your buyer is and what criteria they use to select products to feature.

I would not put all your eggs in the affiliate basket, consider hiring somebody to help you by posting in https://www.blackhatworld.com/forums/hire-a-freelancer.76/

Then when you are ready to lauch post in here:
https://www.blackhatworld.com/forums/dropshipping-wholesale-hookups.68/

Re. the website https://thepackagingclub.co.uk/packaging-club-affiliate-members/ to the affiliate landing page (T&C's are not outlined yet on the affiliate LP, neither is the design complete as only put the page together on Friday - just added the FAQ section).
Only launched the site at the end of Jan and I have loads more products and LPs to add for specific services, and we're yet to launch the blog / content strategy (toying with banner/ad placement but new site and no traffic [yet]).

GringoMonkey said:

It really depends on how much it costs you to bring in customers by yourself. If you cannot do that you wont have any business growth

Dont get me wrong i think you have a really neat idea. But to be successful it will all be about volume and it will also depends on who your buyer is and what criteria they use to select products to feature.

I would not put all your eggs in the affiliate basket, consider hiring somebody to help you by posting in https://www.blackhatworld.com/forums/hire-a-freelancer.76/

Then when you are ready to lauch post in here:
https://www.blackhatworld.com/forums/dropshipping-wholesale-hookups.68/

Click to expand...

100% agree - as I said this is not my only channel - but I know I have little experience with creating affiliate platforms so seeking advice.

I'm very experienced in growing businesses to multi-millions in revenue growth using multiple methods across digital and print - just always did it for other businesses as a consultant.

Kiellberg said:

I mob around Clickbank sometimes, but in my opinion the offers that are real aggressive doesn't "fool" most people.

Im thinking like digital marketing guru/coaching stuff

Click to expand...

Thanks, would you consider my offer to be too aggressive for Clickbank?

Oh from what you were saying i thought you were sourcing ecom products, but your site just talks about ecom packaging for the uk and does not mention sourcing products.

Your not too aggressive for clickbank

GringoMonkey said:

Oh from what you were saying i thought you were sourcing ecom products, but your site just talks about ecom packaging for the uk and does not mention sourcing products.

Your not too aggressive for clickbank

Click to expand...

That's good to hear, and thanks for the advice. Does the LP for the affiliate offer read well?
(obviously I'll add in stats, figures, images etc later)

Seriously, this is why I love BHW above all other digital marketing sites and have been coming here since early 2000's - you people are always so helpful!

You explain your proposition, but packaging is a very narrow niche for affiliates to target.

Plus i am not sure why someone would ever pay for a subscription when you sell the boxes/envelopes direct on the store.

You also dont seem to have an eco friendly version.

GringoMonkey said:

You explain your proposition, but packaging is a very narrow niche for affiliates to target.

Plus i am not sure why someone would ever pay for a subscription when you sell the boxes/envelopes direct on the store.

You also dont seem to have an eco friendly version.

Click to expand...

Thanks for feeding that back - I'll expand on your questions on the landing page to overcome consideration barriers to convert affiliates, so this is very helpful insight for me.

I wouldn't say it's narrow - literally every ecommerce business or ebay or etsy seller needs packaging for shipping their product, we'll be adding cardboard removal boxes soon too, and possibly office supplies - all under the same discount membership model. The market is huge. The leader in our industry does £8 million per month in revenue just on the website, and we're 30% cheaper on average BEFORE the membership discount applied. Total sector value is £11billion p.a as of 2021.

The product is sustainably sourced, biodegradable and recyclable - we don't sell plastic packaging, but offer many plastic free alternatives. We're creating landing pages on sustainability and will feature that on the website (plastic free for the sea campaign, FSC certified sustainable, partnering with a company that offers a tree planting service).

The membership side is how we are able to offer huge reductions for our customers (over 50% off when you add volume discounts to the 12% saved for the customer).
Basically, if a customer becomes a member and buys 2 pallets of packaging off of us, the money they'd save more than covers the membership costs for the year (so should be a no brainer).

Yes, you need to explain and if i was you, make a main selling point, that your packaging is eco friendly.

My point is nobody is going to buy the membership until they are happy with your product. In which case you are just going to be giving an extra discount to somebody who was happy to buy your product at regular price or will just cancel their subscription in the months they dont want to buy.

So, i dont think it will work as a subscription model.

Plus when you are looking at selling packaging direct on the site for prices of over £1,000 and an affiliate only gets paid if they buy a membership and not a % of the product sale an affiliate would have to be mad to agree to bring that customer