When Should We Expect Our Affiliate Program to be Profitable?

As outsourced affiliate program managers, or OPM’s, we often get this type of question from new clients and potential clients—and it is a great question. WHEN do you expect to see your program pay for you? The answer, however, isn’t as easy as many would like. There are a few things to take into account, such as:

• Is your’s a retail, lead gen, or business to business affiliate program?
• If it’s retail, are you starting out in your busy period, in your down quarter, or somewhere in between?
• How well known is your brand?
• What network or platform are you launching on?
• Are you launching with ALL the tools your affiliates will need or is this more of a soft launch?
• What is the competitive space like?
• Are your products and services already proven and their demand already demonstrated?
• How long have you been selling products online?
• How long has your site been around and what other channels are you using to sell?
• Are you dedicating resources to this program, such as an in-house affiliate manager or team or an affiliate management agency such as JEBCommerce?

Answers to these questions will help you adequately plan for the performance of your affiliate program. But let’s start with the ballpark figure that you might be looking for right now. Here is our basic rule - you shouldn’t expect true performance and profitability before month 6. That is our general rule. Why? Managing an affiliate program takes time, it is resource intensive, and you are dealing with a relationship based initiative. It takes time to identify partners, contact them, get them excited, and get them optimized.

Basically, at month 6, if your program isn’t meeting expectations and delivering an acceptable percentage of your online business, either big changes need to be made, you are missing a few key points, you need new affiliates, and/or new tools, or this may just not be a great channel for your company.

Six months provides you, your affiliate manager, outsourced affiliate manager enough time to alter strategy, recruit affiliates, test promotions, product merchandise strategies, and more.

Can We See Success in Our Affiliate Program before Month 6?

Definitely! Many of the programs we have managed have produced a healthy percentage of sales or leads by month 3. But by that time, you should be able to identify things that are working and things that aren’t and alter your strategy and/or the execution of it accordingly. If you are around your third month and seeing little to no traction, you or your affiliate management team should be reinforcing or altering your launch strategy.

Programs of unproven companies or products with little brand recognition and companies with no other marketing in other channels, will most likely experience a longer ramp up time as you need to factor in product education and a little brand recognition into the whole process.

Retail programs tend to show results between month 3 and 6. Lead gen can show results right away or, at times, take longer than retail, and business to business programs tend to be more complex and challenging. So some additional time may be necessary.

These aren’t hard and fast rules, but a decent guideline to show you that it does take some time to build a strong and profitable affiliate program. But you should see results, successes, and failures within the first six months and a good affiliate manager will recognize these as you are launching to ensure the quickest success possible.