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9 Mindset Changes For Affiliates Starting eCommerce - Part 1 (20)

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Welcome to the cyberpunk future of 2017. Self-driving cars are just around the corner. We can teach robots like we teach dogs.

Oh, and affiliates are converting en masse to the amazing, futuristic world of "eCommerce". It's an amazing notion: you promise to sell someone something, they give you money, and then you give them the thing!

Futuristic!

ECommerce has been around for ages, of course. But there's a reason eCommerce is the new hotness in 2017 - dropshipping and platforms like Shopify mean we affiliates can sell our own product almost as easily as selling other peoples'.

But if you've been a hardcore grinding affiliate for a while, it's going to involve a bit of a mindset shift. I've done both - in fact, I've been doing things that fit under the "e-commerce" banner since about 2 years after the word was coined in 1994.

So, here are 8 things that are very different for an affiliate moving to eCommerce, and how you should approach each of them...



Forget CVR. Think LTV.

Lead gen is easy. You fire an ad at a load of people, some of them think it sounds good, and you pass their details on to the merchant, get paid, and never interact with them again. Everything's a one-time deal.

But once you have your own product, that completely changes - and for one very simple reason.

By far the easiest person to sell something to is the person who bought something from you before.

You're not just limited to "one conversion equals 1 payout". Now, if you find the right people and treat them right, one conversion could equal TWENTY payouts.

The acronym you're looking for in this new world is LTV - Lifetime Value. That can be many times higher than your initial sale figure, because you sell to people again and again and again.

There are more ways to optimise it, it's more complex, and it can make you a LOOOOOOOOOOOOT more money.

LTV. Know it, love it, obsess over it.



Upsells Are A Thing.

OK, here's a simple idea: to increase revenue, find the people who are most likely to buy stuff from you, and sell them stuff.

And here's the twist: the person who is most likely to buy from you, in all of the world, is the guy or girl currently buying something else from you. Like, right now.

So if someone's buying a flashlight, you should be thinking about how to extract more money from that sale. Can you suggest a bigger, better flashlight? Can you offer them replacement LEDs or glass-cleaning cloths? Or an extra-care package? A special diffusing lens? A special focusing lens? ALL the lenses at once in one value package, available today only?

These are referred to as "upsells", and they're phenomenally effective. If you're looking for a single lever to pull that will increase your LTV at a stroke - here it is.

You'll spend a lot of time on your upsells if you want to maximise your revenue - and if you ignore them, you risk being beaten by conventional merchants with less marketing savvy but more mainstream ecommerce experience.

Bonus tip: if you really can't think of an upsell, just upsell more of the thing they're already buying. "Buy a second flashlight - just in case!" It works more often than you'd expect.



Sell To Them Whilst THEY Sleep

OK, you know about setting up campaigns to make money whilst YOU sleep. But have you considered setting up a campaign that sells things to people whilst THEY sleep?

Welcome to the land of recurring revenue - a land that, aside from the brave few running revshare deals, affiliates have been almost entirely excluded from. One-off payments are great, but subscription models where you get paid month-on-month are better.

This is a great approach for either an entire biz model - for anything that your customers might want again and again - or an upsell. How about a regular delivery of the world's best power-delivering batteries for that flashlight? Or the annual extra-care package? Or...

Recurring subscriptions are awesome because they trigger loss aversion (what if I cancel this and then my flashlight breaks?), because they remove ANY friction to repeat purchases (great for LTV), and because people straight-up forget to cancel them. I've not watched Netflix in about two months but I'm still paying them every single month, without fail.

There are challenges to this approach, obviously. Recurring payment models have a major trust barrier to overcome, there's the thorny "free / cheap trial" issue, and you get into the whole world of "churn reduction".

But the stability and growth potential of recurring revenue models is close to unbeatable: it's something to consider if you can build into any store.



The Money's In The List

This one's a cliche. For a reason.

I mentioned above that people who have bought from you before are the easiest to persuade to buy again. So it's probably a good idea to try to sell things to them.

That means you'll need to get in contact. Which means that you'll need a WAY to get in contact. Which means you should be thinking about a list of some form: mailing list ideally, but social media also works.

Unfortunately, mailing lists don't work as well if they're cold - if you only ever use them occasionally when you need to sell something. So you're going to need to contact them regularly to get the best results.

And that's where to start: how do you turn that necessity into an advantage? For starters, this is a great place to leverage the huge advantage you have as a product owner: you can have a relationship with your customers over years, and get them to genuinely like and trust you.

You should be thinking about what sort of repeat content you can put out there to people who have bought from you. The bulk of that should probably be stuff they'll find either useful or fun - do not underestimate the value of "fun", particularly if you're selling consumer goods. "Here's 13 pictures of cats doing amusing things with flashlights" might turn out to be your killer email.

You can sell pretty regularly too - once every two or three emails, perhaps even more often. (I have a client who's selling something pretty much every time he posts to social media or his email list, which is getting on for daily. And his audience love him, to a slightly stalkerish degree. It can work with the right audience. )

So - don't just think "OK, I need a list". Don't even think "OK, I need stuff to put out to the list". Think "OK, I need stuff I can sell super-regularly on the list" or "I need stuff that my customers will thank me for putting into their lives".

This will vary business-to-business, but again, intelligent use of your lists can make a huge difference to your overall LTV.

(Bonus point: lists are getting more sophisticated these days, and you should be getting sophisticated with them. There's a huge review of the top programmatic emailing services right now which is worth a read. Being able to easily customise and trigger emails is super-powerful.)

In Part 2: Quality, Funnel Optimisation, Customer Service, and what to do when people actually become fans of your product...

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Wow pure gold right here. Please keep em coming...

I'm about to launch my first e-shop soon and I know the lists as you mentioned are super important. never done email marketing though...

Out of the list of top programmatic emailing services you have provided, what would be the one you recommend the most?

Thanks

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Good article but it focuses only on the advantages and good points of ecommerce. There's definitely a negative and dark side as well you'll need to deal with.

1. Customer service
You're gonna get a million questions from your customers. Where's my package? How do I return this? How to get a refund? The product is broken or how does this work? etc.

2. Returns
You'll need to offer an attractive return policy. A customer who sends a return is a big loss - for ever. And you'll still need to pay your affiliate or traffic source.
People will go to extreme lenghts to get their 10 euro back.

3. Product quality
Could be a big issue if you don't have this under full control - which is the case with dropshipping from Chinese manufacturers

4. Shipping and Customs fees
Big, big, big issue to deal with especially when shipping from outside EU/US into the EU/US. Put a good lawyer on your T&Cs and return policy

5. Credit card fraud - theft
Go to http://www.fakenamegenerator.com and then order something on an online store. Imagine having a lot of people doing this on your store. And on the moment you realize it...oopsssss you've already dropshipped the product and need to pay the manufacturer. So you need to invest big in antifraud mechanisms. Think 800$+ a month for forensiq and maybe a BI analyst (+50K a year) if your store starts selling A LOT.

There's so much more to think about than just doing AM where you send traffic, get paid and take a holiday. Of course AM has its tricky parts as well but its a walk in the park compared to managing an ecommerce store where's there a lot more variables you need to manage and optimize.

Making lots of money is never easy so ecommerce definitely its not the unicorn or golden bullet for 2017. And if it is, for anyone, then it will be for the FB/Adwords focused affiliate marketeer. I agree with Caurmen it has a lot of potential but you'll need to invest A LOT of Benjamins in order to build something lasting.

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@evy123 - Personally, I'd say Drip, but I'll be honest and say I haven't fully explored the options. Drip's good, though, and powerful as all hell.

Watch out for Part 2 - more to come...

@cbrughmans - wait for Part 2! I'll be covering 1, 2, 3, and parts of 4 and 5 there. I'd argue that there are major upsides to 1, 2, and 3 as well as downsides - but you have to handle them right, agreed.

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OK - looking forward to your icing on the cake Caurmen!

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Solid points but i wouldnt classify them all as negative.

1. Customer service - you can easily turn into an advantage and use it as a tool to take care of issues before they actually occur.

2. Returns - indeed a problem, but once you gain experience and knowledge about your product you recalculate the loss % back into the items' selling price. so you essentialy roll it back to the selling price\The customer.

3. Product quality - thats why you should have the items you are selling in your hands at least once. so you can fully understand its Pro's and Con's.

4. Shipping and Customs fees - if you find a winning product you can use the services of a fulfilment centers in the US to reduce shipping time or to keep some inventory there. I'm a big fan of keeping the stock as nearest to me as possible as it gives me more control over my product and gives me less headaches on the CS side.

5. Credit card fraud - theft - Yup, fraud is here, there and everywhere. same as in affilaite marketing i guess. The only positive side to it as that if you encounter fraud on a large scale its a "good" problem, as it means you got big and people start noticing you, so you are making money.

I used to own an eBay store a few years back selling Antiques and collectiables. I think that if you hold some level of connection to your products you learn to like dealing with the negative sides to the business as they make you grow both on a personal level and the professional one.
The thing i disliked the most about eBay (and is so relevant to Amazon today) is that you are stuck to that platform's rules and conditions with and with a limit to your reach. Opening an eStore opens you to so many levels of freedom that makes it so exciting and appealing. Of course while taking into account all the good points you raise and that Carumen will address....

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Great thanks! looking forward to it...

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Nice intro to highlight some of the things that matter in ecommerce.

All very valid points and important for profitability and growth.

Would be good to explore a few of these things in-depth.

If we look at LTV, a lot of this can be determined by the product you sell (what's the lifecycle of a product) and your customer service. To touch on that, @caurmen mentioned this as "how well you treat them" and you would easily just nod in agreement and go to the next point.

But that service will often determine:
- If they come back themselves
- If they will find customers for you, by recommending their friends, family and colleagues to you

It's hard to attribute a percentage of sales to recommendations, as not everyone will tell they came through a recommendation. Some do, as part of the conversation, and it runs in the thousands in sales per order sometimes.

So an element not to be underestimated.

And it's not hard. The bar is actually pretty low.
You sell, ship, answer any question the customer might have in the process and KEEP COMMUNICATING. That last part is crucial.

You can mess up a shipment, but if you let the customer know and communicate all the way and do your best to solve the problem they will show appreciation.

An real life example:
We shipped a 3K custom order in 2 parts. On both occassions and despite proper packaging, the order arrived damaged and the manufacturer had made mistakes.

We apologised, had them remade at our expense (manufacturer of course denies any resposability) and had the order delivered to our warehouse.
Did the inspection with the customer and found a scratch on one of the products.

Customer not furious, but now understands what we had to deal with, realises the effort we made. Tells stories about how he was treated at other companies in similar situations. Brought a friend that now also wants to buy because of the level of customer service.

In short: customer gets a mess, comes out the other end happier.

I'll be honest about the cost though, as this was not a profitable transaction for the direct customer. But he will recommend us to everyon he talks to, brought his friend in as a potential new customer and will come back when he needs replacement parts.

So this is just touching on one of the points @caurmen mentioned.

Might come back with a how-to guide if people are interested ( or make it part of a new curriculum if that would be the preferred option of the powers that be)

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Great points.

I'm going to touch on the customer service and communication aspect a bit in Part 2 - as pekadis says, often a screw-up is a great opportunity to over-communicate and get a very happy new repeat customer.

That's really important.

Most companies suck, badly, at customer service.

If you talk to people, are polite, and keep talking to them even if it's awkward, you'll exceed their expectations about 80% of the time.

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Maybe its better to start selling products of other people (from amazon/ebay for example) and than sell own goods? And all problems with shipping/returns go to seller. Am i right?

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@continental If you are the one taking the money, you're responsible for solving the problem with your customer.

Then you have to solve it with your supplier, which is the company you bought it from.

So the problem might be caused by something your supplier did, but it's still your customer..

Hope this helps

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Why people will be goods in my Shopify store if they can go to google, find same good in amazon for lower cost?

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are Voluum and Adsbridge actually integrated with shopify? huge potential there for them

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They're not, but tag manager works well with Shopify and the FB pixel for instance.

Edit: or at least Voluum isn't,can't speak for AB.

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shopify lets you implement an unlimited number of cookie based c2s pixels on the order confirmation page; it doesnt support postback s2s tracking though.
so in a certain way Voluum and Adsbridge are perfectly compatible with shopify, only pity is there is no guide on either site how to do easy set up/integration between them

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Great stuff guys!
When will part 2 be published?

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@adzonemg - this week, most likely!

@continental - people are lazy, and often not very sensitive to price. Beyond that, it's all down to branding and copy: if your store makes it obvious they could buy elsewhere, they're more likely to look.

(Also, there's no reason you have to sell things that are easily purchasable on Amazon - but if they're popular, it may matter less than you think that you are doing so.)

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One of the general things I've learned about people since getting into marketing is to not underestimate how lazy and uninformed some people are.

Assuming others think like yourself is the biggest and most costly mistake you can make in the long run.

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The 1st part is gold. Waiting for the second part.

Thank you.

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Nice real nice.

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