Photo (CC) by Josh MacDonald, on Flickr
If you want to increase the sales of your product, you must get it in front of more people.
While there are many ways to make that happen, a way used by many small businesses is an affiliate marketing program. It’s simple in the concept, one business agrees to carry another’s person’s products, usually on a commission basis.
So as a business owner, you can participate in affiliate marketing in two different ways. First, you can carry the products of another business. This might help you increase foot traffic in your store or bring in a complementary product that would enhance the sale of your own products,
To be effective in this scenario, you and your sales people must understand the product and be able to help the customer see how both products together does a better job of solving an issue than either product does by itself. And while obviously you would love to sell your own product, you need to be able to sell the affiliate’s product as well as your own.
The second way to use affiliate marketing is for you to place your product in another person’s store. If that is the route you choose, be ready to help the other owner understand how carrying your product alongside their own will only help sell both.
It’s important in either scenario that you have a clear understanding of the responsibilities of each party, the financial arrangements, and on issues such as service, product returns/refunds, and who pays for joint marketing efforts. These arrangements must be in writing and reviewed and/or modified at least annually.
Cautionary Note – One aspect of affiliate marketing to remember is that actions of a store handling your products will reflect on your own brand and identify.
Let me share an example. For my daughter’s recent birthday, we know she enjoys key lime pie. So since we were traveling, I searched for the best pies in the area. The store that came up was some distance away but their products were handled by local businesses. I called one, they had it, I drove over and found out that it was out-of-stock. So I called another store and reserved one for a later pickup. But when I arrived, nothing was found under my name. So as I later reviewed the company, the performance of the affiliates played huge in my comments. (Just so you know we did eventually get our pie and it was enjoyed by all.)
So when setting up an affiliate marketing program include some means to determine how your brand is being influenced by the affiliate firm. Sometimes you will get the comments directly but be sure to ask for access to comments that include your product that the other business receives.
Affiliate marketing at times has received some negative stories about it. Yet it has a place in a business strategy.
Affiliate marketing can bring success. But you must plan carefully when setting up the arrangements.
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Glenn Muske is an independent expert on rural small business, working as GM Consulting – Your partner in achieving small business success. He provides consulting, and writes articles for county extension agents and newspapers across North Dakota. Previously, he was the Rural and Agribusiness Enterprise Development Specialist at the North Dakota State University Extension Service – Center for Community Vitality.
