Over two years ago replying to a question of what percentage of sales an affiliate program can bring I wrote:
Much depends on (a) the size of the business at the point of starting the affiliate program, and (b) the niche in which the business operates. In reality, it is next to impossible to quote the exact percentage. If it’s a small business in a moderately crowded niche, 40-45% is a realistic growth to expect. If, on the other hand, it is a Fortune 500 business with a solid online presence and a good flow of Internet sales prior to starting the affiliate program, a 10-15% growth is a great result to achieve through the affiliate channel.
Yesterday, as I was listening to Ozon.ru, one of Russia’s top if not the top online retailers or the Amazon of Russia, present at the Russian Internet Forum in St. Petersburg, I’ve heard them quote some impressive stats. Regardless of the fact that roughly 80% of their customers choose cash-to-courier as their payment method (the “beauty” of present-day Russian e-commerce), they’re growing and currently getting some 4 million UVs, carrying 1 million products, having 1k employees, and registering gross sales of some 4 billion RUB (which currently equals some 143 million USD)/year at a rate of ~6,200 orders/day. Answering the question of of what percentage of their sales come referred through affiliates, one of Ozon’s directors, Anna Matveeva, replied that between 10% and 13% of the e-tailer’s sales are affiliate-driven. That makes up a range of $14.5-$18.6 million/year which is impressive not only for Russia.
I’ve asked some major American online merchants the same question, but most of them sent me replies saying “sorry, we’re not able to share that information” or something along similar lines. DaySpring.com, a Hallmark subsidiary, whose affiliate program we manage, did agree to share their numbers though; and I’m happily linking to all of their online properties, in return. Jesse Lane, the company’s Internet marketing director, shared that Year To Date 2011 numbers have been 12% to 14% of all online store sales. This seems to roughly match the range that Ozon has quoted above.
If you’re reading this as a merchant (or an affiliate program manager), I could really use your help now. Here’s a 100% anonymous poll that I’m inviting you to participate in:
I hope the above poll will help us all understand what part of an e-tailer’s sales can be affiliate-driven a bit better. Many thanks in advance for your votes.
I was wondering how effective it is to automatically sign customers up as affiliates? At first thought it sounds like a good idea but as I’ve been reading more of this site I’m learning that I may not want just anyone joining the affiliate program which would make auto-adding customers not such a great idea after all. But I’d like to find out about people’s experiences with that.
It seems an affiliate marketer is as unique a person as say, a computer programmer. Or is the sentiment that whoever isn’t into being affiliate just won’t use the program but for the few who would like to, its a good idea? Seems one would just want to add a message promoting the program instead of automatically signing them up instead.
Good train of thought, and an even better question, Isis. Approaching satisfied customers in an attempt to recruit them as affiliates is definitely one of the methods that is being used (sometimes very successfully). However, automatically signing them up isn’t something that I would recommend doing. Let them opt into the idea. They don’t always have to be “computer programmers” or digital marketers (something that in situational leadership we call “professional maturity”). If they’re as passionate (or “psychologically mature”) about what you do/sell as you are, they can probably make a very good affiliate (be it by pushing you through their blogs, or emails to their contacts who are interested in the same niche/product/service). But do let them make the decision on whether to become your affiliate or not. Don’t sign every customer up automatically. You, as an affiliate program manager, will ultimately be the one to deal with the mess such an approach will create.
I understand. I have made purchases online in the past and have been automatically signed up for affiliate programs but never became active with them. 🙂 I do plan to hire a good affiliate manager but I’m trying to learn as much as I can so I can at least set it up and have a good idea of its purpose and the manager can improve it where needed. The script I’m using has an automatic customer signup module and it left me wondering if it were worth using. But as you indicated, giving them an option is much better. Thank you. 🙂
Hi Geno,
I’ve been reading your blogs recently and found it very useful, especially for me who are trying to enter the Russia market as an affiliate.
I’m currently running ZZKKO.com, which is a social shopping site. Could you please check it out and let me know if you think this site has a shot in Russia?
We are collecting products from AliExpress, eBay (and I’m thinking about Ozon now), and users can form these products based on their own interests.
Will this work in Russia? We are doing pretty well in Brazil and Argentina.
Thanks!
Yang
Apologies for my tardy response, Yang. I was on my annual vacation when you posted this comment, and I’m still sorting my way through all the emails that came in during my absence… I do believe ZZKKO can be successful in Russia too. Email me, and I’ll hook you up with a product-oriented affiliate network there. Between Ozon and them, you should have plenty of products to work with.