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  1. #1
    Newbie Mindtrekker's Avatar
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    New Merchant: help set my expectations?
    Hello All:

    You've seen it before.

    New guy on the block.

    All pumped up.

    Gonna make a killin' and retire on the sailboat.

    Yaddy yadda.

    OK, yes, that's me now.

    Not new to this business (30+ years) or online marketing, but new to the affiliate side of things as a merchant.

    As a new merchant, assuming we get at least SOME of the things right, what should my revenue expectations be for year 1?

    We have two main channels for current business:

    Sales to individuals via ecommerce = $X

    Sales to institutions (multi-user licenses) via telesales = 2x $X

    Where do you think our affiliate sales will come in?

    Thanks for your educated guesses.

    Michael

  2. #2
    OPM/Moderator Hectic GHC's Avatar
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    It all depends on your overall sales and demand of product. In the affiliate space, after 1 year of a well managed program, you should expect anywhere from 5% to 40% supplemental sales.
    Greg Hoffman
    Affiliate Marketing Advocate of the Year 2016; Best OPM/Agency - 2014; Best OPM/Agency, Five Years in a Row - ABestWeb.
    Visit Greg Hoffman Consulting

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  4. #3
    Newbie Mindtrekker's Avatar
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    I realize that affiliate marketing revenues will vary all over the place -- tons of variables and there's no one answer that will fit everyone.

    I'd be very curious to see some case study, or simply "in my case," information here, of what different people in different industries experienced... what incremental revenue they saw from adding affiliate programs.

    Any published research or studies on this?

    Thanks a million.

    Michael

  5. #4
    OPM/Moderator Hectic GHC's Avatar
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    I've been doing this for almost 10 years. I've seen less than 1% and I've seen 40%. But the unknown variable is 40% of what? If you have zero sales overall right now, chances are you will have zero sales from the affiliate program. You have to have branding, a niche to fill and a well converting site before affiliates will jump on board.

    I just talked a merchant off the cliff today. She has two sales a month overall but she has a program active on ShareAsale, which has never had a sale. I told her to forget about the program until she fixes her website and starts bringing in sales naturally.

    Only you can predict how many sales you will have naturally. But affiliate marketing is not the place where sales start. Affiliates need proof they will earn money.
    Greg Hoffman
    Affiliate Marketing Advocate of the Year 2016; Best OPM/Agency - 2014; Best OPM/Agency, Five Years in a Row - ABestWeb.
    Visit Greg Hoffman Consulting

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  7. #5
    Newbie Mindtrekker's Avatar
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    Thanks, Greg, for your detailed responses. We do direct ecommerce and telesales in the multiple millions per year. We have a clearly defined product and a target audience (teachers), with years of branding, lots of awareness in our market, and about 500,000 subscribing members to our site (various payment levels -- from free to group licenses in the 5 figures).

    Just now launching affiliate marketing.

  8. #6
    OPM/Moderator Hectic GHC's Avatar
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    In theory, it should work well. But you need to tell affiliates what kind of conversion to expect.
    Greg Hoffman
    Affiliate Marketing Advocate of the Year 2016; Best OPM/Agency - 2014; Best OPM/Agency, Five Years in a Row - ABestWeb.
    Visit Greg Hoffman Consulting

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  10. #7
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    Toughest part sometimes is managing the expectations of senior management. Make sure they understand it will take time to get traction for a new program, especially a niche one. Be responsive to your affiliates, especially those with a good reputation, because they will know what they need to grow the program. Most merchants set a goal of about 15% of online sales coming from affiliates, but it doesn't happen overnight.
    Jeannine Crooks - Always happy to share what I know! - Voted Best Network Rep 2013 & 2014
    Email | LinkedIn | Twitter | Affiliate Window
    US Programs | Canada Programs | UK Programs | Ireland Programs | Mainland Europe Programs

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  12. #8
    ...and a Pirate's heart. Convergence's Avatar
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    Are your products B2B or B2C?
    Salty kisses, Sandy toes, and a Pirate's heart...

  13. #9
    Newbie Mindtrekker's Avatar
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    Quote Originally Posted by JCrooks - AffiliateWindow View Post
    Toughest part sometimes is managing the expectations of senior management. Make sure they understand it will take time to get traction for a new program, especially a niche one. Be responsive to your affiliates, especially those with a good reputation, because they will know what they need to grow the program. Most merchants set a goal of about 15% of online sales coming from affiliates, but it doesn't happen overnight.
    Thanks much, Jeanine, for some specific targets. I was thinking maybe 20% so guess I was in your ballpark.

  14. #10
    Newbie Mindtrekker's Avatar
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    Quote Originally Posted by Convergence View Post
    Are your products B2B or B2C?
    The business does both B2B and B2C, but the merchant part would be just for B2C.

    Curious as to why you ask that question.

  15. #11
    ...and a Pirate's heart. Convergence's Avatar
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    Asked because, personally, think your products would be more difficult to sell via an affiliate program for B2B...
    Salty kisses, Sandy toes, and a Pirate's heart...

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  17. #12
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    Our UK team just put together this article on Five Performance Advertising KPIs to Target Your Team With. Perhaps this can help you with goals.
    Jeannine Crooks - Always happy to share what I know! - Voted Best Network Rep 2013 & 2014
    Email | LinkedIn | Twitter | Affiliate Window
    US Programs | Canada Programs | UK Programs | Ireland Programs | Mainland Europe Programs

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