The success of any online portal depends on the amount of traffic coming to its platform. Affiliate sites are helping online portals to attract more customers by directing traffic to them. These sites offer cash-back, coupons, daily deals and price comparisons to customers, which have become a force multiplier for online retailers and consumer internet companies alike, including travel portals.
Sulakshan Kumar, founder and director of MySmartPrice, a price comparison site wanted to set up an online portal but realizing the large amount of capital requirement, he opted to enter the enabler space. Last year, many companies started shifting from digital marketing campaigns to affiliate marketing as it gives twice the returns.
Affiliate sites work on a pay-per-purchase model – client has to pay depending on the number of purchases done by a customer. Online portals pay them commissions in the range of 2-10% of sale prices. Books and electronics usually carry a commission of maximum 5% only due to the low profit margins. However, FMCG and fashion products lean towards a 10% commission.
Price comparison sites are yet to gain popularity. Currently, affiliates which give coupons that convert into direct sales dominate the scenario with 90% of traffic generated from these sites.
Cashkaro, a cash back site, was born when one of its co-founders, Swati Bhargava, realized that online shopping gave better deals for global brands. It shares commission earned from large portals with customers, which they then can redeem for cash. The success of the model is evident from repeat with some of them having accumulated upto Rs 1 lakh worth of cash-back points.
Backed by a group of angel investors in UK, Cashkaro works with around 500 online retailers. Online portals prefer such tie-ups as compared to digital marketing because of the nominal fee involved.
Launched last year with backing by Rocket Internet, PricePanda aims to tap into the potential price comparison sites requirement in the affiliate marketing space. It will work towards attracting more customers while also helping portals to retain them, as affiliate sites can be a great support system for ecommerce companies.
Shopclues claims that 25-30% of its business comes from affiliate partners who also help by collecting data on the preferences and buying patterns of customers.
With the growth of the ecommerce industry, affiliate sites will become more crucial as they support and generate more traffic. With the network and expertise they have, customer acquisition will be easier.
A large ecommerce player may have tie-ups with 50 or more affiliate sites. As a seller, you can tie-up with favourable affiliate channels to generate more traffic to your site. Ensure that your prices are competitive so that you get an edge on price comparison sites and customer retention is easier.
After dwindling with her family business, into travel and hospitality, for more than 3 years, Pooja Vishant found her true love in writing. Happy-go-lucky and cheerful, she loves pink; so pink is the way to go if you want to get into her good books. The Associate Editor keeps track of even a leaf that has moved in the ecommerce world!
Leave a Comment
