Should You Have An Affiliate Program for Your Products?
If creating digital and physical products is a natural part of your business model, it’s safe to say you depend on sales for a portion of your income.
Creating your own products can be great, but it can also create an uneasy feeling. If you do make sales and get a return on your investment, all your hard work and effort could turn out to be a bust.
Plus, even if you have a high launch, you’ll still need to decide how you will continue to promote and market your products to keep the money rolling in.
Many business owners are using affiliate programs to improve product sales, and it’s just a referral program for your products.
People who use a referral system and like them can sign up to be an affiliate and refer your product to others usually through a custom link that is unique to them and tracks conversions.
If the affiliate makes a sale, they earn a commission, and you keep the rest.
Establishing an affiliate program for your products may or may not be something you want to integrate into your business plan.
Here are some pros and cons to consider.
Pros of Having an Affiliate Program
Free promotion – Having an affiliate program for your products can result in free marketing. The people who sign up for your affiliate program will be motivated to recommend it to others knowing that they’ll receive a percentage of the sale as well. You can get people to promote your products to their audience on social media, their blog or website, via video content, and more and you won’t have to pay anything upfront.
You can get people to promote your products to their audience on social media, their blog or website, via video content, and more, and you won’t have to pay anything upfront.
The potential for more sales – Since you’ll naturally receive more promotion and buzz around your products if you have an affiliate program, that will help increase your reach and generate more sales. Let’s say you have other entrepreneurs, YouTubers, friends, customers, etc. promote your product. That could double, triple, or quadruple your reach.
The more people you reach, the more potential there is to have a higher conversion rate.
Cons of Having an Affiliate Program
You may lose profit – You get to choose the pay rate for your affiliates who sell your product but to get your affiliates excited about promoting it, you’ll need to offer a payout rate that is worthwhile. If you offer a high commission rate like 40%, and your affiliates don’t make a majority of your sales, their commissions could eat into your overall profit.
If you’re already doing a good job selling your own products, you may not need an affiliate program since you can just keep 100% of the profit instead of paying out a portion of it out to affiliate for just a few extra sales.
You can’t control how other people promote your product – Another drawback of having an affiliate program lies in the fact that you can’t really control how people promote your products.
While you can offer suggestions, if someone decides to write a really bad review, use sleazy marketing tactics to draw in sales, or falsify their experience using your product or any of the features it has, you can’t really do anything other than reach out to them and request they fix the issue.
If you want to have full control how your product is promoted and marketed to avoid any issues with future buyers, you may want to be cautious when considering an affiliate program since you’ll have to give up some of that control.
Summary: Decide If An Affiliate Program is Right For Your Business
Affiliate marketing is very popular these days. However, just because someone is having success with their affiliate program for their own products, doesn’t mean you should jump on the bandwagon too.
Affiliate programs will be more beneficial for some businesses with certain products and a specific audience over others. Be sure to weigh the pros and cons carefully when deciding if you should try an affiliate program to boost sales.