Affiliate programs come in all shapes and sizes, but the basic concept is simple: Independent parties will help you sell your parts, and you’ll give them a percentage of the sale for their trouble (see graphic below).
Conceptually, it seems like a win-win. In practice, affiliate programs can be hit or miss. Here’s our assessment of affiliate programs based on some of our team’s experience in a marketing agency and as individual affiliate marketers.
First, An Affiliate Marketing Disclosure
Before Jason Lancaster was the President of Spork Marketing, he was an affiliate marketer. He owns various web properties that have generated millions of dollars in parts and accessories sales over the years, and he has earned a small (but respectable) percentage of those sales. He’s also done leadgen as an affiliate – which is very competitive – and he’s even worked at an affiliate marketing agency for a while before launching Spork.
While Jason does not claim to be an expert affiliate marketer, his experience is represented here in this post about the pros and cons of affiliate marketing. Which is to say that, despite his personal success as an affiliate, Jason believes affiliate marketing has some serious issues that most etailers overlook.
So What Are The Pros and Cons of Affiliate Marketing From A Brand Perspective?
With our disclosure out of the way, the pros are:
- Affiliates boost product and brand awareness, sometimes in a major way
- Affiliates are basically free marketing labor, so they can generate good profit when everything is working
- Managing affiliates takes a lot more work than you might think
- Affiliates can damage your brand
See below for more detail.
Pro: Affiliates Help Get The Word Out
If, for example, you have an affiliate who has a popular YouTube channel, their recommendation to consider a certain brand (or a couple of brands) can carry a lot of weight. Same goes for bloggers that people trust, forum managers, popular Instagram profiles, etc.
Likewise, affiliates can promote/share/talk about brands and products that consumers have never heard about. This is one of the main reasons that many new companies are interested in affiliate marketing – when you’re new and don’t have a lot of money to spend on advertising – affiliate marketing can be a shortcut.
Pro: Affiliate Marketing Can Be Profitable If Done Correctly
Imagine hiring an online marketing assistant who will:
- Search for opportunities to promote your products
- Share links to your website and encourage potential customers to buy products
- Create videos, articles, or posts to promote your products
- Come up with creative ways to market your product that you’ve never even considered
Now imagine that you only have to pay this new assistant if they produce sales. Sounds like a million dollar idea, right? Assuming they don’t do something terrible (more on that below), the ROI of a good affiliate can be awesome. (More about ROI in content marketing here.)
Con: Affiliate Management Requires A Ton Of Work
Some popular ecommerce platforms offer very basic affiliate tools that consist of nothing more than a few banners with unique link codes. While this type of program can be effective, most successful affiliates expect:
- The ability to deep-link to specific product pages, as that tends to convert better
- 24/7 access to an updated product data feed so that they can build sophisticated tools and/or scale efforts
- A dedicated program manager they can call or email with questions and concerns
- Quality photos, banners, and unique coupon codes for their own use
- Early access to new products, promotional support on social media, and even personal attention from company executives
Basically, the best affiliates in the industry expect you to lay out the red carpet for them. That means you need more than some banners and a unique link code, and supporting more than a few affiliates can quickly become a full time job.
It also means that, because of the amount of work it takes to maintain an affiliate relationship, affiliate marketing can get expensive.
By the way, “easy” affiliate marketing is a myth. We talk about this in another blog post here. Hope you check it out.
Con: Affiliates Can Damage Your Brand
All the damage in affiliate marketing comes from bad actors. Bad affiliates will:
- Lie, cheat, and steal to get their commission – see this article about affiliate fraud to learn more
- Make false promises about your product to potential customers that your product can’t possibly live up to
- Generate spam and engage in illegal activities (mass emailing without an optin, claiming proceeds go to charity just to get sales, impersonating someone to cash in on their celebrity), etc. just to get a sale
- Badmouth your company if/when you remove them from your affiliate program, and even encourage consumers to buy products from competitors if they are upset
Basically, if you have an affiliate program, you must have safeguards. Every affiliate application must be vetted carefully. Affiliates should have to clear numerous screenings. Contracts that lay out rules and expectations should be signed. And affiliate activities must be closely monitored.
This all takes work, and it’s one of the reasons that a lot of companies have shutdown otherwise successful affiliate programs – a few bad apples can ruin the whole barrel.
Should Auto Parts Retailers Have An Affiliate Program?
Generally speaking, large retailers should have some sort of affiliate program managed by a company that specializes in affiliate program management. That way, the risks are mitigated, and the success of the program will depend on the program manager (who has a vested interest in making it work).
For smaller retailers, affiliate marketing is a mixed bag. If your company is smaller and decides to offer an affiliate program, we recommend making it invite-only, and that each affiliate should have a short term (3, 6 or 12 month) agreement.
- An invite-only program has a lot of benefits, not the least of which is that you can control the amount of work that needs to be done to support affiliates.
- By keeping things invite-only, it’s easy to monitor each affiliate’s activity, provide the tools and resources affiliates want, and work with each affiliate to improve your product offerings.
- By making the program short-term, you give your company an easy way out of a bad affiliate relationship without risking hard feelings
Affiliate marketing can be a powerful tool for growing sales, reaching new consumers, and building long-term relationships with people who can help promote your brand. However, the most successful affiliate marketing relationships require a surprising amount of work. As a result, affiliate marketing isn’t typically the best place to start when your company is new.
And whatever your company size or age, safeguards are essential to the success of any affiliate program. Unless you’re working with a company that specializes in managing affiliates, you want to go slowly: Review affiliate applications and activities carefully, and start off with a short-term relationship. If things go well, it’s easy to expand the relationship. If they don’t, it’s only a few months until the relationship has ended.