Affiliate marketing

Affiliate marketing is actually quite simple. As described above, there are other people who send visitors to your shop. Basically for free. If one of these people buys something, you pay an amount to the person who generated the visitor. Typically in affiliate it's a percentage rate such as 7%. So if the customer buys 200.00 in your webshop, you pay 14.00 to the person who generated the visitor. If the sale is canceled or the customer returns the item, you can also cancel the deal (typically within a month).

So affiliate marketing isn't free marketing, but you only pay if this marketing works. And thus an optimal marketing channel for new webshop owners.

How does affiliate marketing work?

There are three players involved in affiliate marketing:

• The webshop - who wants to sell some products
• The affiliate agency - who basically just connects the webshop with the affiliate
• The marketer - who has many visitors that he/she can influence to visit the webshop

Here is a typical example of affiliate marketing:

Peter has a webshop where he sells protein powder and supplements. He wants more sales.

Gitte has a website where she writes about weight loss, strength training, running etc. She has many daily visitors to her webshop, but also many readers of her newsletter and many followers on Instagram. But she doesn't really make any money from her website, which also costs money to run.

In an ideal world, Peter and Gitte would just meet and make a deal. But that would be time-consuming for both Peter and Gitte (and almost impossible as they don't know each other). So this is where the affiliate agency comes in. Let's say it was run by a guy called Ken.

Peter sets up his webshop in Ken's affiliate agency. Here he writes that he sells supplements etc. and is in the sports and weight loss industry. He also writes that he will give 10% of his sales if someone brings in sales.

Gitte also signs up as an advertiser in Ken's affiliate agency. She looks at what webshops are set up in the sports and weight loss industry and sees Peter's webshop. She immediately starts recommending products from here on her blog and sends 50 visitors that way every day. 50 visitors a day is about 1500 visitors a month. If Peter has a conversion rate of 2%, that's 30 extra orders per month. Let's say they buy on average for 350,-. This means that Peter has to pay Gitte 35,- for each sale. That's 1050,- per month. To avoid money going back and forth, people not paying, etc., Peter pays the money into an account with Ken. Ken then tracks the sales and pays the money to Gitte. For this administrative part, Ken typically takes a small slice of the pie (which is only fair).

As you can see above, it's a really good way to market yourself as it doesn't cost customers more. Neither Peter nor Gitte run any major risks (the only risk is that Ken's company closes, but you can choose a company with a long history and good references).

Is affiliate marketing only for blogs and webshops?

Not at all. If you have a large following on Instagram, you can easily use it against them too. Or in your newsletter. And if you sell another service, you can use it for that too. Telecom companies, unemployment funds and fitness centers have also used affiliate marketing, but now this page is mostly focused on webshops.

Which affiliate agencies are there in Denmark?

The most well-known for smaller webshops is PartnerAds. It's pretty well geared for smaller webshops and fully integrated with Shoporama.

Another popular service is Tradedoubler, which tends to focus on the slightly larger shops.

We know online marketing in Shoporama

We've been working with online marketing ourselves for decades. As the only shop system in the country, we have spoken multiple times at conferences such as Marketingcamp, SEOday, Shopcamp, Digital Marketing, E-commerce Manager, Ecommerce Day, Web Analytics Wednesday and many more.