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February 27th, 2009, 12:23 PM #1
What is the % range of total online sales you can expect from an affiliate program
- Join Date
- June 21st, 2007
I have heard that a merchant (let's say electronics or clothing retailer) can expect to have 10 to 25% max of their total online sales generated by the affiliate program. What you have found?
February 27th, 2009, 12:41 PM #2
- Join Date
- January 18th, 2005
How long is a piece of string? It all depends.
I know of well-established merchants who obtain more than 75% of their new customers from their "affiliate program" referrals. I know of merchants who profitably receive less than 5% of their new customers from affiliate referrals. I know of merchants who have affiliate programs that have never generated a single new customer.
It all depends on a huge range of factors, but probably the most important factor is, "What other marketing activities are you using?"
If you are active in PPC Search,
and if you've used best practices for organic Search Engine Optimization (which might or might not include an inbound-link strategy),
and if you're buying CPC and CPM-based advertising on other web sites and networks,
and if you're making use of "marketplaces" like Amazon, eBay, and others,
and if you've created a Google Base feed for Froogle,
and if you've provided similar price data for price-comparison shopping engines,
and if you're engaged in a variety of other marketing activities,
then those activities will each represent a "slice" of your sales.
I've worked with merchants who, shortly after site launch, drew 90% of new customers from paid search, because paid search is an "instant" tool. After several months, they see that percentage drop as they begin to draw traffic from organic search and from affiliates. As they implement additional marketplaces, the percentages shift further. Sometimes, merchants will scale back their internal PPC and allow affiliates to engage in "direct-to-merchant PPC" which can shift most of the PPC percentage over to the affiliate slice.
Merchants who allow "parasitic affiliates" will see their percentage of activity shift to the "affiliate program" from several other channels, although this is an "artificial" shift since the parasites don't add any value and merely poach transactions that should properly be allocated to other activities.
Merchants with poor tracking technology, or who don't properly implement tracking (for example, forgetting to include the transaction-tracking code on a Google Checkout or PayPal confirmation page), or who rely on multiple tools to track different channels, may also see misleading and conflicting data.
It's also important to recognize that "multiple referrals" might be responsible for a sale. A consumer might click first on a link on an affiliate or price-comparison web site; later, the consumer might search on Google and click on the merchant's PPC or organic listing; and then during checkout, the consumer might decide to search for a coupon, and click back from a coupon-affiliate site. All three of these clicks contributed to the successful sale transaction; most tools exclude all but one of these clicks from credit.
Last edited by markwelch; February 27th, 2009 at 12:59 PM.
February 27th, 2009, 03:49 PM #3
Mark always has an interesting perspective~Rhia7 -- Remember the 7
February 27th, 2009, 11:07 PM #4
I think your 10-25% range is very realistic for most merchants. For smaller merchants, that number can be even higher. For larger merchants with many other sales and marketing channels, it'll be hard to hit the bottom end of that range.
February 28th, 2009, 01:16 AM #5
- Join Date
- October 10th, 2006
I would definitely not suggest relying on affiliates to get a program off the ground, if that's also what you're wondering. It's hard for a merchant to get good affiliates that will send reliable volume.
Might want to treat affiliate sales as icing on the cake to start off with.
February 28th, 2009, 02:59 AM #6
- Join Date
- February 27th, 2009
- Napa, CA
Mark - just a note of appreciation for a detailed and educating answer.
Bart O'Brien - O'Brien Estate Winery - Romantic Wedding Gift Wine Sets
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