4 Lessons on Affiliate Marketing from Shopify
Shopify is the biggest e-commerce platform in the world with a market capitalisation of 121 billion (YCharts, 2020). Especially in recent years Shopify exploded, with more and more people starting side hustles and getting into e-commerce or dropshipping.
A few years ago, Shopify also introduced their Affiliate Program, which has contributed tremendously to their growth since then. And while specific numbers are hard to find, it is safe to say that by now thousands of people promote and sell Shopify memberships to their audience - without any additional cost to Shopify.
But how did they do it? What are the factors that make Shopify’s Affiliate Program so successful? And how can you implement some of those lessons in your own venture?
Those are the questions I am going to answer in the paragraphs below. Let’s dive into it!
Affiliate Marketing vs. Referral Marketing
First of all let’s clear up some confusion around the term Affiliate Marketing. What is Affiliate Marketing and what is the difference between Affiliate Marketing and Referral Marketing?
Both reward you for referring other people to use a certain product or service. But there are also some clear differences.
To make it simple, Affiliate Marketing is tapping into the followers and community of an Affiliate (from e.g. a Blog or YouTube Channel). While the followers know the affiliate from the (social) media, the Affiliate normally doesn’t know the people he is selling to personally.
Affiliates usually get compensated with a commission (percentage from the sale).
Amazon e.g. has an Affiliate Program that gives you X% as commission of every product that is bought via your Affiliate Link.
Referral Marketing on the other hand is based on a more close relationship between the referring person and the person she is referring to (e.g. friends, colleagues, family). The referring person is usually a customer herself and gets rewarded through premium usage of the product.
Dropbox e.g. has a referral program that gives you more storage space if you refer someone else.
What makes Shopify's Affiliate Program so successful?
So know that we have this confusion out of the way, let’s look at what makes Shopify’s Affiliate Program so successful.
It's free to join and transparent
Shopify is actually one of the few programs that require you to reach a certain audience size before you are allowed to join. We will discuss in the next point why they decided to create this criterion.
But apart from this, the program is completely free to join and Shopify makes it as easy as possible for you to create an account. They even created a whole FAQ Page. Before you even join the program, you know what Shopify requires and expects from you, what you can expect from the program and how you can maximize your chance of success.
Shopify offers a great service to their Affiliates, with a support chat answering in a few minutes and even a Personal Assistant. As you can see the threshold Shopify puts in front of their program allows them to take better care of their existing Affiliates.
Also when creating my own Affiliate Programs I recognized that 20% of Affiliates usually generate about 80% of the total sales, so this approach of quality over quantity can make A LOT of sense.
Shopify is removing as many roadblocks as possible, in order to help their Affiliates grow and make the participation in their program as smooth as possible with a great support.
At the end of the day, what is everyone really motivated by? Whether you like it or not, money is a great motivator for many people, especially when it comes to business and advertising.
Shopify realized this and offered their Affiliates generous commission payments ranging from 58$ on average to up to 2000$ for a “Shopify Plus”- Membership, per referred customer.
This might seem like a lot of money to “give away” but you need to understand that Shopify only pays if a sale is actually made. Furthermore, many of the customers referred will probably re-new their membership and maybe even refer others to use Shopify.
At the end of the day, there is no risk for Shopify, a great motivation for Affiliates and a huge opportunity for growth.
A good Product.
At last, Shopify simply has a good product. If your product sucks, it won’t be successful in the long run, no matter how good you promote it.
As mentioned before, Shopify offers a service that is becoming increasingly relevant for more people and their product is great. Shopify’s Affiliate Program had a high chance of success from the get go - simply because of their product.
How can you replicate this in your own business
How can you implement the lessons from Shopify’s case in your own business?
To summarize the most important points you should:
- Have a good product.
- Make it free and easy to join your program and be transparent with potential Affiliates.
- Offer support. Make it easy and attractive to promote your product/service.
- High commissions/rewards and just make it easy and pleasant to work with you e.g. by providing promotional materials that your Affiliates can use.
- Use the right tools to make your life easier:
- leadDyno or First promoter. Both are great Affiliate Management Systems that take care of basically everything, from creating your Affiliate Link, to tracking and managing Affiliates as well as paying out your commissions.
- SEMrush. My favourite keyword tool to find good Affiliates for your program.
- Inzpire.me. Great platform to find relevant influencers.
- Similarweb. Perfect for validating website traffic of your influencers.
- SocialBlade. The same as Similarweb but for Social Media like Instagram or YouTube
- AffiliateWP. Great WordPress Plugin for Affiliate Marketing.
Are you planning to build your own Affiliate Program?
Over the last 5 years I have created many Affiliate Programs from scratch and
We also recently -relaunched my e-course that explains step-by-step how I created an Affiliate Program with over 1000 members that generated 20% monthly growth for YC Startup SafetyWing. Check it out here and use discount code julyoff for 10% off.
YCharts on Shopify’s Market Cap: https://ycharts.com/companies/SHOP/market_cap
Ask Eustache’s Shopify Review: https://askeustache.com/shopify-affiliate-program-review/#:~:text=Unbiased%20Shopify%20Affiliate%20Program%20Review%20Based%20On%20Personal%20Experiences,-Last%20updated%20on&text=With%20Shopify%20Affiliate%20program%2C%20you,a%20Shopify%20plus%20referred%20account.
By Enelin Paas and Jakob Bodendieck
See more about affiliate marketing here: https://enelinpaas.teachable.com/