PLEASE have a website first....

[Sarah Bundy]

I get a lot of calls from people who are looking to start their affiliate marketing program, thinking they are going to make a million dollars within their first three months. This just isn't now the industry works, especially not with one off products (diet weight loss ebook) or only one tangible product.

There are several things an affiliate manager / OPM is going to need in order to get your program working, the two main ones being:

1. A website. Yes, it's shocking but I still get calls asking to run an affiliate program for a company that doesn't have a website or platform to buy the product on. What pages do you think affiliates will be able to link to? they need a website or at least a landing page to be able to drive traffic.

2. A website that converts. You have to prove that your website can convert sales outside of an affiliate program first before you can effectively launch / manage it and reach your sales targets. Affiliates look at a lot of things when deciding what programs to join, and conversion rate is one of the top 3, if not the most important element. They also look at things like commissions, cookies, quality of products, competition, creatives, in house support (do you HAVE an affiliate manager taking care of them), etc.

I could go on forever, especially after the call I received today, however I will instead leave you with these thoughts: PLEASE have a functioning website that converts before you try to launch your affiliate program. If you don't have a site that converts, call us or your local trusted web developement / conversion optimization company to help you. It's the #1 thing that will make you profitable or not.

Example for a website that has 5,000 visitors per month:

0.3% conversion / $100 AOV
5000 x .003 = 15 orders
15 orders x $100 = $1500 /mo in sales

0.8% conversion / $100 AOV
5000 x .008 = 40 orders
40 orders x $100 = $4000

1.5% conversion / $100 AOV
5000 x .015 = 75 orders
75 orders x $100 = $7500

and so on.

Industry standard is 2% conversion for an ecommerce site OUTSIDE of an affiliate program. Many of our merchants are converting above industry standard and have far more traffic, so this is just an example to demonstrate to new merchants who are starting out why it's important to focus on having a website that works first.

[LizGazer]

Good post Sarah! I've received quite a few inquiries from merchants who are misled or misguided into believing that the role of an Affiliate Program is to turn their site into a conversion machine. Your Affiliates have no control over what happens to the click once it hits your site. Their job is to generate awareness & traffic. The merchant's job is to close the sale.

[Sarah Bundy]

Exactly, Liz. That's why a merchant's conversion rate is so important. If they have a zero percent conversion rate, it doesn't matter if they get a million visitors from affiliate sites, they still won't get any sales. That's the fault of the merchant website, not the affiliate. Here's a quick example of how important conversion rates really are to a merchant's success:

Merchant spends $10,000 month on marketing, has a 1% converion rate and produces $100,000 in sales. With a 2% conversion rate, the merchant could still spend $10,000 in marketing but will produce $200,000 in sales.

It's SO key to an online business's success.

Merchants can acheive this through AB Testing, redoing their website and/or having solid conversion optimization practices running continuously. There is always room for improvement, which means there is always room to close more sales.

Remember, if you have a 1% converion rate, that means you have a 99% failure rate to close your sales. That leaves room for a lot of improvement.