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Looking for an advice of publishers

Discussion in 'General Merchant & Advertisers Forum' started by vladas, Mar 20, 2017.

  1. vladas

    vladas Affiliate affiliate

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    Hi,

    I am interested to advertise my Brand goods throw affiliate marketing.
    We produce high quality leather bags. Brand name - Time Resistance established in 2015. And in first year we make profit just with regular ecommerce sales but I would be much happier to get attention of more sales channels.

    I believe that we are perfect for drop shippers cause we have almost all our goods in stock and providing fast 2-4 business days worldwide shipping by UPS.

    Our eshop: timeresistance . com . Average item costs: 180$

    We also sell on Amazon and Amazon affiliate programs are interesting too.

    So the question is does affiliate marketing will work for our products? If yes where should we start? What rate of commissions we should offer to get publishers attention and etc.?

    or

    Maybe there are better ways to achieve common value?

    Looking forward for your comments, insights and professional opinions.


    [​IMG]
     
  2. ytz
  3. transyndicate

    transyndicate Affiliate affiliate

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    Hi vladas,

    To get started with affiliate marketing, you'll need a click tracking tool to use in conjunction with your website. This is how you'll keep track of which affiliate is responsible for which sales. Do you use an ecommerce website service? Depending on your answer, I'd have different recommendations for what tools to use for click tracking.

    When determining how large of a commission to offer, you should take a look at your conversions, profit margins, your Customer Lifetime Value (CLV or LTV), and your Cost Per Acquisition (CPA).

    Without knowing those exact numbers, it's hard to suggest what kind of commission to offer. ie. If your margins are 20% ($36) and someone tells you to offer a $50 commission per customer - that won't work for you. Especially if customers only ever buy 1 bag. So without sharing those numbers, no one will be able to recommend you an exact commission percentage or price.

    So without knowing the nitty gritty financials, here's a basic way to go about figuring out what to offer as commission.

    1. Determine your average customer lifetime value - which is the average of how much money you profit from each *customer*. Note that if you have repeat customers, this number will be different from the average profit from each sale. If you don't have a CRM or other tool that easily calculates this for you, try exporting your sales into an Excel sheet, add an extra column, manually input your cost to fulfill each order, and then make a new column with a formula to subtract the difference.

    2. Determine your cost per acquisition. If you pay for advertisements and know the conversion rate, great! Then you probably already know this number. If you don't have any paid advertising and are doing this all via free social channels and word of mouth, I would still recommend pinning down a number. For example, if you pay yourself $100 a day, and you spend half of your day promoting your site to get more customers, and you get 2 new customers a day, your CPA would be $25 per customer.

    If you don't have a lot of repeat customers, you will want your CPA to be lower than your profit margin on the initial purchases. If you have a lot of repeat sales, it is not uncommon for your CPA to actually be higher than the profit you would make on a customer's initial purchase. (A good example would be a magazine subscription; Commission might be $20 for new customers, even though the profit might only be $8 a month. The magazine company is counting on people to stick around for 3+ months before seeing a return.)

    With your LTV and CPA in mind, you can get a rough idea of what to offer as a commission. Is the time and money you're putting into acquiring customers worth the "cost"? If not, an affiliate program is definitely a good idea. Marketers who specialize in your niche might be able to produce better campaigns and get better results. Not always the case, but still likely.


    To sum that all up, here's 2 basic formulas to send you in the right direction:

    If the time and money you're putting in is worth the "cost":
    Commission = YourCostPerAquisition

    If the time and money you're putting in is NOT worth the "cost":
    Commission = YourCostPerAquisition + HowMuchYou'reWillingToPayToAvoidAdvertising

    And in case it's not obvious, the commission should always be less than the LTV.

    If you don't currently advertise (which you didn't explicitly say, which is why I mention this):

    If you ever have a hunch that you're over- or under-paying affiliates for their sales, try advertising yourself! Put together a few ads and promote them on Google Adwords, Facebook, etc. Tracking your sales and doing a bit of math will allow you to truly measure:

    1. Click through rate (CTR) - the number of clicks on your ad divided by the number of times your ad was seen
    2. Conversions - the number of sales divided by the number of clicks
    3. Cost Per Acquisition (CPA) - the amount of money spent on advertising divided by the number of customers (or sales) gained via advertising

    If you have the time and money to experiment with advertising, I'd recommend it. If not to boost your own sales or adjust your affiliate commissions, then at least to let affiliates know what kind of conversions/EPCs to expect during your affiliate recruitment efforts.


    Hope that helps! There's so much to say on this subject it's hard to get it all said in a post.
     
    Last edited: Mar 20, 2017
  4. vladas

    vladas Affiliate affiliate

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    Hi,

    Thank you a lot for information. It was really helpful to make better estimation.

    About tracking tool: I use opencart 2.0. But hadn't decide on tool to use for tracking yet. An advice would be very helpful.

    Regarding commissions: I would consider to offer 20-30 % commision rate per item. Conversion rate is up to 2% per visit at our page.

    What about affiliate networks? Which could work best for product like ours?

    At this moment I had only positive response from Flex offers, other top 20 networks just ignored or declined my request of becoming advertising there cause the brand is not known well.

    Total cost at Flex offers is 3k. escrow deposit 1k and 2k for managing my program there. Does it worth it to try with them?

    Also may you advice how to check on familiar brands programs and to see how does it work for them?

    Thank you.
     
  5. transyndicate

    transyndicate Affiliate affiliate

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    If you're looking for an Open Cart extension, I haven't worked with any of their tracking extensions to be able to recommend you one :/ But from a quick google search it looks like there's a few options available.

    As for a network recommendation, does the Flex Offers fee of 2k include getting your program in front of their affiliates and guaranteed traffic? Because if not, there's definitely some cheaper options out there...
     
  6. vladas

    vladas Affiliate affiliate

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    I will create an affiliate program first and than I would like to promote it in forums like this. I think it could show are there any interest in it or not. But what are the risks of doing so? Is there any threats that could affect us in negative way - for example our keywords SEO and so on?

    For example would you be interested to publish our production and earn something like 20-30 % commision rate? Why yes or no (despite that financial data you mentioned before) ?
     

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