Suggestions: Affiliate Marketing
I’m not going to try to sell you e-books in this post, I promise (though there are a lot of good ones out there). It seems there’s been a lot of buzz lately about affiliate marketing online. The basics around this are that you sell another person’s product, usually a book in pdf form or video series of the SEO, Business, Lifestyle Design, or Finance genre, and get 50% of the sales. It’s pretty simple, and can be very lucrative.
While I was working today, I was thinking about how online affiliate marketing could be used in purchasing actual things. It would sort of be like drop shipping, but for the Etsy-BigCartel-independant-art degree’d-farmer’s market-probably had a deviant art account 8 years ago-loves old cameras 20- and 30-somethings that are starting a whole ton of wonderful small companies and finding success online (that I plan to visit when I leave for the Barter Project).
Here’s the way it works now: if you’re like me, you have a website with your products. You hope to get enough exposure via blogs to get you exposure in magazines. Then buyers might see them, or friends of friends of buyers might see them, and you might be lucky enough to get accounts with retailers either online or in actual retail spaces. You show them a catalogue/price sheet and they pick what they want. They place an order with you, you sell to them at a wholesale price (40-50% retail I think, I don’t sell in stores), ship their goods, and they mark up and sell to customers. Sometimes, you sell to a supplier, who then sells and ships to a retailer, who then sells and ships to the consumer…yea. Your result is a twice, maybe thrice or 4x shipped product (plus the materials being shipped to you, remember…I won’t count those here because it varies so much).
I think this is old fashion, if only for the fact that goods have to be shipped so many times, which means a whole lot of fuel and more cost to the consumer. It’s a big risk for shop owners to buy inventory from new companies, so they’re much more selective over what they buy/sell. It’s also nearly impossible for a retail store (short of a Wal-Mart or a grocery store) to match the daily traffic or customer base of a popular international online store. Thus, this practice severely limits exposure for brands, and shop owners loose selling potential because they can’t afford to stock a super wide selection or rent retail space with that amount of traffic.
We need to simplify and streamline the process, because there are a lot of great artisans making a lot of great, high quality, unique things that most of us have no access to (or have never even heard of). My idea is simple: affiliate marketing. This is mostly for online shops, and as I’ve only been formulating the idea for about 12 hours I’m sure there are tons of bugs and hell, this might even exist. If it doesn’t it should, and I call dibs on giving it a funky catch phrase (or maybe I should take down this post and act on my idea?).
My concept goes like this: a shop owner opens an online store. He finds brands he likes, and signs up to be an affiliate for them. He then gets a PDF with pictures of the items to post on his website, and posts them for sale. Meanwhile, the brand has entered the amount of each product they have into the website that this is all facilitated through, which will not allow any of the affiliates to oversell the product. The brand specifies the price including shipping per item, and the shop owner receives 30-35% of each sale. The shop owner’s only job now is to market his shop. He doesn’t have to keep warehouse space, or even retail space. He doesn’t need to worry about items not selling, and he can have all the sales he wants; the savings will be deducted 75% from his portion and 25% from the brand’s portion. Basically, it costs nothing for him to start his business.
On the brand’s side of things, it would be just as simple. Instead of dealing with selling things on their website for retail, and then wholesaling to retail and online locations and filling huge orders all at once, they would just get an email through the facilitating site with orders that come in, and they’d get their portion of the payment. The items would be shipped once, right to the customer, and the work load would be spread out a bit over the entire retail life of the product.
The big thing here is that this would create a sort of natural selection effect. Online shop owners wouldn’t have to risk buying inventory they can’t sell, or dealing with a ton of companies in person, so they could curate a wider and more unique selection for their shops without worry. Consumers would be much more in charge of an item’s retail success, and a lot of things that may never have seen daylight on retail shelves could become huge successes at the hands of the consumer, not the marketing firm or buyer. It would also allow small start up companies with good ideas to find success quickly, and better solutions to be available to everyone without a 30 minute Google search.
Ultimately I think this could be a simple solution to online retail. It would eliminate risk for buyers and shop owners, save the consumer money and time (and expose them to lots of new and great products and solutions), and would vastly improve a small business owner’s ability to succeed online. What do you think?
