Build A Sales Team Without The Overhead

Welcome to another edition of the WineMarketer.com newsletter.

Are you developing new revenue channels by tapping into the power of Internet marketers and publishers? With the highly competitive online wine landscape, it’s critical to fully leverage the power of the web in your favor - particularly finding ways to work with savvy Internet marketers.

Affiliate marketing is a practice that provides stores the opportunity to generate more sales, while generally developing a payment structure that best suits their business model. It is essentially a revenue sharing agreement between a website owner (publisher, portal, blogger, etc.) and an online merchant. As an online merchant there are tools and resources available to get started building an affiliate program. To give a quick crash course on the options available, I will be documenting some tips, including service providers and examples, which will enable wineries and retailers to visualize the potential and low barrier to entry for forming their own affiliate marketing campaign.

I am surprised to see more wine stores have not already embarked on this marketing play with the current rise of Web 2.0 and direct shipping slowly shifting the market. Today is the perfect time to begin and work out the kinks! Considering the average cut a distributor historically takes (30% on a fair day), affiliates leave room for higher margins and can help you flourish as the online wine industry continues to evolve.

Pay On Your Terms

There are generally three common options and payment types for developing an affiliate program.

1. Pay Per Click - This is the least common when it comes to online retailer programs. When a potential customer leaves an affiliates website through clicking on an ad (whether be a banner, text link, product, etc), money is deposited into the affiliates account as part of the arrangement. Basically in this relationship, the affiliate operates as a toll taker… offering you traffic in exchange for a fee every time they come into your site.

2. Pay Per Sale - In this scenario, affiliates are compensated only when a sale is completed through the merchant’s website. Also known as a commission, this can vary greatly by industry. Most online wine retailer affiliate programs pay between 5 to 12% depending on the monthly volume sold.

3. Pay Per Lead - For a payout in this type of agreement, the affiliate must provide traffic which results in a specific action on the retailers website. This can be any pre-agreed action such as signing up for a newsletter or registering for an event. This payment is usually a flat fee based on the action.

Get With The Program(s)

You don’t have to develop the technology (or even the customer service) for an affiliate program in house if you do not have the time or resources. Luckily, this is a rather advanced online marketing technique and multiple service providers offer solutions for merchants. These are known in the industry as affiliate networks and have been used by everyone from Visa to Golfballs.com to create more sales channels. These affiliate networks work to track traffic, sales, payments and affiliate member accounts for merchants. They also act as a great gateway to immediately find new affiliates by publishing your program to thousands of active clients they already work with.

Below are some of the more popular affiliate networks with a listing of current industry related clients.

LinkShare - Client’s include: Wine.com, Personal Wine, International Wine Accessories

ShareASale - Client’s include: WineZap, The California Wine Club, Cellars Wine Club

Commission Junction - Client’s include: The Wine Enthusiast, Chateau Online, Laithwaites

Converseon- Client’s Include: My Wines Direct

Don’t Sit Back Yet

If this was a fairy tale, after setting up an affiliate program the cash would come rolling in. You could sit back passively and attempt this, but designating an “affiliate manager” for your organization, whether it be internal or external, is a great idea. Why? To be successful and compete in your industry, your program will require maintenance, work, and great customer service for your affiliates. Networks will give you the ability to monitor your affiliates and approve those who wish to use your service. You don’t want one unsavory affiliate or spammer who runs an unethical marketing campaign to ruin your brand name, do you? To ensure you are working with reputable sites and affiliates, it’s important to have someone available to regularly screen and monitor members of your program. On the same token, it’s important to track the sales of your best affiliates by monitoring their campaigns and providing rewards such as different commission tiers for their promotions. With consistent trend monitoring you will also be able to align your program over time for maximum results.

Obviously, it is important to first have a working eCommerce site and develop your affiliate program as an extension of your online build-out for wineries and retailers. I recommend taking a look at your current sales channels to see if affiliate marketing on the web is right for you.

Learn More & Ask Questions

On the WineMarketer.com forums we have samples of wine retailers, wineries and accessory providers who run successful affiliate programs. We invite you to come and join the conversation.

Affiliate marketing has the potential to be a great revenue driver in the wine industry as the market continues to develop online. It might be time to grow some more grapes!

Cheers,

Mark Spangler, VP; ClassicWines.com, Founder; Wine Marketer

Mark Spangler, based out of Philadelphia, has been actively involved in Internet marketing and business development his entire career, often working in a capacity to utilize the web for brand development. He is the founder/editor of WineMarketer.com and Vice President at ClassicWines.com, an online wine community and shopping portal. He also consults small businesses in Internet Marketing.

This entry was posted by admin on Thursday, June 19th, 2008 at 8:10 pm and is filed under Blog, Customer Service, Direct Sales, Marketing, Web 2.0. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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