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How to set up affiliate marketing for your Shopify business

Rudi Eihenbaums

Dec 27, 2023

Will 2024 be the year you invest in micro-influencers or affiliate partnerships?

Affiliates drive shoppers from their channels to your business and you pay them a commission. Sounds like a dream, but how do you navigate the noise, apps, and scammers?

To get you the best advice, I spoke to OpenStore’s top partnerships marketing expert, Ross Yader.

Ross has worked in affiliate marketing since 2009 at agencies of all sizes in California. He also worked in-house, building affiliate programs for Yelp.

We discussed:

How an affiliate marketing partnership works.
How to get set up with partners.
What apps to use.

I asked him to start with the basics:

“Affiliate marketing is a paid marketing channel where your third-party marketing partners endorse your brand, products, or promotions.

Potential affiliate partners — called types — could include major media publications, niche content sites and blogs, shopping marketplaces, product discovery platforms, cashback and rewards sites, and various tech plugins, such as ones for site abandonment or upsells,” explains Ross.

Six benefits of seeking out affiliates

An affiliate program can:

attract new customer bases,
boost your Shopify business’ profitability, and
diversify your marketing channels through partners in symbiotic relationships, without the heavy lifting of running your own marketing campaigns.

1. Brand awareness

“Setting up a program in a well-respected network unlocks the ability to partner with affiliates who can promote your brand. If properly executed, affiliate marketing can lead to increased brand awareness, site visitors, sales, and revenue,” says Ross.

2. Long-term partnerships

Individual affiliates can become go-to growth partners.

“Providing an affiliate incentive can be a great way to activate, track, and fairly compensate referral partners.

Think content and review sites, loyalty platforms, major media publications, or deal and cashback sites,” adds Ross.

3. Social proof

Incorporating testimonials and reviews from affiliates on your landing pages can act as social proof that could encourage shoppers to choose your business.

It’s great if affiliates provide genuine endorsements of your brand that will likely resonate with their followers, boosting your brand’s image.

4. Diversified channels

Affiliates can use their websites, blogs, YouTube channels, Instagram and TikTok accounts, or email marketing to promote your products and drive traffic to your Shopify business.

Implement affiliate marketing helps you achieve an omnichannel marketing strategy. You’ll be able to, (1) explore where to reach new customer segments, (2) find out how to reach new markets, and (3) reduce your reliance on a single source of traffic, increasing your business’ value if you ever decide to sell it.

5. Profitability

Affiliate marketing is a performance-based marketing strategy, meaning that you only pay for successful transactions with a potentially high return on investment (ROI). It also minimizes your financial risk.

6. Improved SEO

Affiliate marketing can also boost your search engine optimization (SEO) efforts. Reputable affiliate websites that link back to your business can improve its authority. Press mentions and social media can (indirectly) also benefit your SEO.

Some drawbacks

Affiliate marketing needs strategic planning and execution, so you need to allocate time and resources for that.
Potential lack of control since you’re dealing with external partners.
Requires maintaining attractive profit margins so that affiliates will want to work with you.

Ross explains:

“For an affiliate program to be successful, it does take time to properly setup, manage, and optimize to make sure it's truly driving incremental value and sales.

Some affiliate types are more valuable than others, and so it takes time and, ultimately, experience to properly compensate and optimize affiliate performance,” says Ross.

Four-step setup

Does implementing an affiliate marketing program for your business need technical knowhow?

While some tech skills are beneficial, Shopify’s interface and many apps make it accessible to most. But first:

1. Plan

Start by selecting products you want to promote.

Outline a clear vision for your affiliate program, including customer personas you want to target, ideal affiliate partners, commissions, and expectations.

Make sure to identify which brand values are non-negotiable to you, and where you’re willing to be flexible.

2. Platform (and then app)

Ross’ next step is to choose an affiliate platform to use for tracking, storing creative, and paying publishers:

“To outline the strengths and weaknesses of various platforms, I use the buyer’s guide from Martech Record, an independent affiliate industry publication.”

Most (but not all) platforms will have a Shopify plugin or app counterpart:

“Reliable Shopify integration is a must to streamline and automate functions like returns and product feed maintenance,” adds Ross.

Check if your shortlist of affiliate platforms have apps that offer seamless integration with Shopify. Pay attention to tracking capabilities, payment processing options, and the user-friendliness of the interface for both you and onboarding your affiliates.

3. Petition

The next step is to find and invite affiliates to your program.

“Your platform of choice will have recruitment tools of some kind.

You can supplement their tools by using third-party SEO tools like Semrush or Ahrefs to find top-ranked traffic referral sources in your category or for your preferred keywords.

Some of these tools have free versions that are still helpful for finding good sources,” explains Ross.

Consider your initial plan and whether you need to offer exclusive discounts for your target affiliates’ audiences or other incentives that encourage long-term collaboration.

Choose affiliates that align with your brand values, and provide clear guidelines, marketing/brand materials, and support to onboard affiliates so they can get started as quickly as possible.

4. Performance

“From there, your platform partner should provide the key tools you need to manage and grow, with reporting and payment processing being two of the main ones,” Ross shares

Pay attention to metrics like click-through rates, conversion rates, and the overall ROI to evaluate the effectiveness of your affiliate program.

Keep it simple, says Ross:

“Using other basic business tools like MS or Google should be all you need to complement your platform tools and keep your program organized!”

Regularly review your program's performance. Experiment with different commission structures, promotional strategies, and affiliate partnerships.

Also, maintain regular communication and provide ongoing support to your affiliates. Recognize their efforts and offer feedback, fostering a positive and productive relationship.

OpenStore’s approach

OpenStore’s team of tech and e-commerce entrepreneurs manage around 50 Shopify businesses in the U.S.

“We take a sophisticated approach to affiliate marketing, understanding that different types of affiliates provide different levels of value to a merchant’s program, and thus they must be handled and compensated accordingly,” says Ross.

Here’s the step-by-step process OpenStore follows:

Use in-house tools to scale the program through publisher recruitment and activation.
Measure every affiliate’s contribution to sales with attribution tools like unique codes, parameter/UTM tracking, etc.
Compensate each affiliate appropriately to maximize ROAS.
Apply learnings from one program to benefit of another.

“Whether it's discovering a new publisher or finding a promotion that converts really well, we’re able to leverage our robust portfolio of DTC brands for the benefit of any new merchant we bring in the door,” says Ross.

There's another way

OpenStore can either buy your Shopify business flat out, or run it for a whole year, while paying you. We’ll manage your business’ operations, including your affiliate marketing efforts.

Turn your Shopify business into passive income

Our experts will run your Shopify business for 12 months while you receive guaranteed monthly payments. OpenStore analyzes your business’ performance to calculate your monthly payments.