Making Sense of Affiliate Marketing on Etsy

Affiliate marketing is a popular strategy for marketing products online: you can get someone else to promote your product in exchange for a cut every time you make a sale as a result of their work. Many marketplaces have incorporated such programs in order to make it easier for their sellers to get reviews and promotions outside of the marketplace.

Etsy isn’t one of those marketplaces, though: while the site has gone out of its way to make it easy for developers to build tools that can help sellers promote their work in other ways, affiliate marketing just isn’t an official component of what Etsy offers. Despite that fact, though, there are some sellers on the site who are finding ways to access the advantages that affiliate marketing offers.

Offering an Affiliate Program on Your Own

The mechanics of setting up an affiliate program of your own can be a little difficult, at least compared to setting up a program on another site. That’s because most affiliate tracking software relies on your ability to add code to the site where you’re promoting your product — that way, you can track who sent you each buyer. The best software automatically generates reports you can review and send out payments for with one click, rewarding your affiliates for their hard work.

No affiliate is going to be willing to promote your products without a way to track how many sales they’ve sent you. But there is a relatively simple approach that you can use immediately. Because Etsy allows you to create multiple coupon codes, you can assign a coupon code to each affiliate. Then, whenever you receive a sale referring to a given coupon code, you can tell which affiliate helped close the deal immediately. You still need to do some tracking mechanically — it will be up to you to calculate and send out any affiliate payments.

There are a few services that offer to help with managing ‘referrals’ — the buyers affiliates send your way — such as Referral Candy. It’s a matter of personal preference on whether you want to pay for such a service, though if a system will actually help you sell more of your wares on Etsy, it’s probably worth the expense. If you’d rather go it alone, make a point of keeping your program as organized as possible.

The Pricing Issue

The big dilemma most Etsy shop owners face when considering offering an affiliate program is that such programs usually require raising your rates. Any affiliate program means that you’ll need to have enough margin in the prices you charge to be able to pay your affiliates a rate that will inspire them to work hard at sending you prospective buyers.

But on Etsy, since you’re most likely using coupon codes to track your buyers, you also need to have enough room in your prices to offer those coupon codes consistently. You need coupon codes that make a big enough dent in your prices to actually inspire buyers to use them, while still keeping your prices low enough that anyone without a coupon code will still be willing to make a purchase. It’s a very fine line to walk. If you can strike the right balance and your affiliates can send you plenty of buyers, though, it’s worth the effort it will take to price your products. It’s just like choosing to mark up your prices enough to be able to use Etsy in the first place and still turn a profit.

If Ety does roll out the ability to offer affiliate programs directly through your shop in the future, don’t be surprised if you have to offer those affiliate commissions on top of the fees Etsy charges you. There’s just not a big enough margin in those fees to cover paying affiliates.

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Finding Affiliates Who Can Actually Sell

The other major difficulty in offering an affiliate program is managing to find people who are actually good at being affiliates. There aren’t a lot of hard numbers specifically about Etsy affiliates, but in most ecommerce niches, only a handful out of your list of affiliates will sell more than one or two of your products. That can be discouraging, but if you find one of the better affiliates — sometimes known as ‘super affiliates’ in the industry — that person can make sell a huge number of your products.

Exactly who might be a good affiliate depends on what sort of audience the person has access to, and whether that audience will be interested in purchasing what you have to sell. It’s generally better to work with someone who has a proven track record of successfully selling affiliate products, but if the audience is right, don’t be afraid to take on someone who is much newer to affiliate marketing. You can always choose to offer a newer affiliate a small commission or otherwise negotiate the terms of your agreement.

Some super affiliates have their own expectations for any seller they work with. You may be asked to guarantee a specific commission level, offer certain support (like copies of your graphics or an interview) or even show that you can fulfill all orders they send your way. It’s up to you to decide if meeting such requirements are worthwhile. It’s a good idea to write out an affiliate agreement, if not setting up a full-fledged contract, to ensure that you and your affiliates are all on the same page.

Once you have your affiliates in place, you need to make sure that you keep them. That means maintaining your program carefully, even if you don’t have software in place to track all the nuts and bolts. You need to send your affiliates regular reports, as well as regular payments, and keep them updated on anything new you may be rolling out. The easier you are to work with, the more likely that an affiliate will continue promoting your wares over any new company that comes along.

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