Everyone from bloggers to large publishers and even entire companies are finding ways to generate revenue through affiliate marketing. The kissing cousin to commissioned sales, affiliate marketing can be a great way to generate revenue without holding inventory. We track 38 companies in our fashion tech database that use affiliate revenue as part (or all) of their business model. Let’s explore.
Affiliate marketing, as mentioned, is essentially a commission paid on a sale. When a visitor to your webite clicks a link (or makes a purchase, depending on the provider), you generate revenue.
Here’s something you probably didn’t know: almost all affiliate marketing that takes place on the web falls under a patent owned and licensed by the Tobin Family Education and Health Foundation. A man named William J. Tobin developed – and patented – the idea of affiliate marketing on the web around his company, PC Flowers and Gifts, on the Prodigy Network, way back in 1998. (Good thinking, Bill.)
Affiliate marketing is relatively easy to set up. For testing a business concept – and proving that there’s revenue to be generated – it can be fantastic. Very early stage startups can benefit from this greatly, especially when in the fundraising stage. Larger, more established companies can benefit as well; with high traffic, the dollars can start to add up. The ability to build a fashion business without holding inventory is important, and using affiliate marketing is the easiest way to make this happen.
The percentages paid out can be quite low, so the traffic needed to justify affiliate marketing as a business model can be quite high. We always recommend to our clients that they have multiple revenue streams. The (traffic) bar is very high for a business to become profitable on affiliate revenue alone.
Setting up affiliate marketing can be easy – but tweaking it can be complex and time-consuming. You’ll need to know which programs work best for which types of posts / links, and what type of content drives the most clicks or purchases.
ShopSense // One of the top choices for affiliate marketing in the fashion industry, ShopSense (owned by POPSugar) uses ad units, widgets, and API’s. Critisized for a lack of analytics, some users have turned to link shorteners when using the platform. The program is one of PPC (Pay Per Click), so it’s best for high-traffic, low sales-generating sites.
Reward Style // Another very popular option is Reward Style. The company has good analytics, and is known for working with Pinterest. They are a pay-per-sale program, paying out when your user makes an actual purchase – so it’s best for sites that really know that their users are in a shopping mood.
Skimlinks // Based in London, Skimlinks is a very popular option as well. Known for it’s ease of use, the company boasts access to 18,000 affiliate programs.
72 Lux // While not a traditional affiliate program, universal shopping cart SaaS platform 72 Lux is offering an interesting platform for publishers (bloggers, magazines, and editorially focused companies) to monetize sales without making users leave their site.
Other affiliate programs include Beso, ShareASale, Affiliate Window, and Rakuten LinkShare. For general products and books, Amazon Affiliate can be a good choice. (And, as we all know, they’re making a fashion play as well.) Google recently shut down it’s own affiliate network.
Fashion Tech Companies
As mentioned before, at the time of this post, we track fashion tech 39 companies in our database that use affiliate marketing in their business models. These include sites like Lyst, Polyvore, Rank & Style, The Cools, and more. Shop It To Me is a perfect example of a company doing affiliate marketing well. So well, in fact, that they are able to support 26 employees with their 3 million users. We love their new-ish feature, Threads.
Affiliate marketing is an important supplement to many business models, and when done right, can be great revenue generator. Focused businesses are even able to build entire companies on it. Subscribers to our fashion tech database can search 700+ companies, including 39 affiliate-using sites.
Liza Kindred is the founder of Third Wave Fashion. Third Wave Fashion has been your fashion tech think tank since 2011. We publish the first ever printed fashion tech magazine, Third Wave. Follow us on Twitter or subscribe to our newsletter to stay on top of the latest in fashion tech + wearables.