FAQs: What Percentage Of My Revenue Should Come From Affiliate Marketing?

What percentage of my revenue should come from affiliate marketing?

27 Mar 2023 • 6 min read

During every onboarding call, we're always asked this question: 'what percentage of my total revenue should come from affiliate marketing?' The answer: it all depends on your industry and how much effort you're willing to put into your affiliate program.

In this article, we outline our averages across every industry we work with, to outline exactly what percentage you should be aiming for over the years.

💡

If you'd like to learn what the average commission in your industry should be, just read our other latest article 'FAQs: What commission should I offer affiliates?'

So, what percentage of my total sales should come from affiliate marketing?

While the answer varies depending on the brand's specific goals and marketing strategy, our benchmarks confirm that the average percentage from affiliate marketing should be 12% for brands within their first year of affiliate marketing, 18% for brands in their second year and 26% for brands in their third year and beyond. Of course, this varies according to each industry, but we dig deeper into our data for each industry in the following article.

💡

The following stats are averaged across an entire year. We recommend thinking about your natural peaks and troughs across the year for industry and replicating the same model across your affiliate sales. For example, in January, Health & Fitness see's a bump for 'New Year New Me' purchasers, whilst Online Confectionary see's a huge decline.

Total affiliate sales percentage for Coffee brands

Your average coffee shops notoriously have incredibly low margins due to personnel and location costs (hence why we're seeing more coffee brands going D2C via online channels) - so we'll look at the eCommerce focused coffee bean brands.

Coffee brands who we work with, see a 15.6% average (if averaged over a three-year cycle) added to their total online sales revenue when working with affiliate marketing.

Total affiliate sales percentage for Clothing / Fashion brands

Clothing brands are seeing a huge resurgence in affiliate marketing and are classed as mature, with 15+ years in the affiliate marketing industry. Swathes of technological budget is pushed into advancing the space specifically for them, for one reason alone: volume of sales.

💡

Clothing / Fashion brands actually make up only 3% of all brands in the space, but total a staggering 29% of all affiliate commissions, due to their high volume of sales.

Clothing / Fashion brands have reduced their total spend on traditional advertising routes by 3% every year for the past 5-years (source: Marketing Weekly), and continue to pump money into affiliate marketing for its low-cost, low-risk structure. On average, we're seeing Clothing / Fashion brands in their first year hitting 17% of their total revenue in affiliate sales, 25% in their second year and 27.5% in their third year.

💡

Find out exactly how much commission you should be offering affiliates here.

Total affiliate sales percentage for Cycling brands

Cycling is a tricky affiliate space to get into, solely due to its split between brands moving towards a D2C (direct-to-consumer) sales route, solely for higher margins and less risk, and their traditional bricks and mortar, mom & pop stores. There's a reason why the likes of Canyon and YT are made up 32% of all online bike sales in 2021!

We'll split this into Cycling brands and Cycling retailers for ease of reading.

Cycling brands in year one are seeing an average of 3% in total sales revenue from affiliate marketing. In year two, they're seeing 7% of total sales revenue and in year three they're seeing 19% of total sales revenue. A huge leap from year two to year three.

💡

Online purchasing trends in the cycling space shows consumers are more likely to shop around for the best price, with a time lag between engagement with links to purchasing of 13+ days.

Cycling retailers are seeing an immediate impact of 9% in year one, 12.4% in year two and 17.1% in year three. The reason? The impact of 2020 - 2022's boom on the cycling industry was obvious, and now, swathes of discount code sites are popping up for consumers to take notice of incredibly bargains, which reduce purchasing time lag and increase volume.

💡

Find out exactly how much commission you should be offering affiliates here.

Total affiliate sales percentage for Cycling Clothing & Accessories brands

Cycling clothing & cycling accessories brands sit in two categories: high-end, which don't do much discounting, and mid-range, which focus on showing high discounts to attract customers to purchase in great volume. The two different types work with infinitely different affiliates and push different strategies. Long story short: they're just very...different, and for the purpose of this, we'll split them into two groups.

High end with minimal discounting

The high end cycling clothing (£80.00+ for a jersey & £120.00+ for bibs) & accessories brands work solely with social influencers and publications, pushing links at full RRP, over discount code websites. These high end brands in the first year average 12% of their total sales through affiliate revenue, 16% in the second year and 24% in their third year.

Mid-range with discounting

Mid-range brands (less than £80.00 for a jersey and less than £120.00 for bibs) that work with discounting sites, publications which post deals online and other social affiliates which push discount codes, have a much higher percentage of total sales through affiliate revenue. These mid-range brands average 17.2% in their first year, 18.4% in their second and 19.3% in their third year.

The reason for the reduced amount of growth is due to these brand's limited consumer base, focusing on recreational cyclists who hone in on discount and value proposition over performance benefits.

💡

Find out exactly how much commission you should be offering affiliates here.

Total affiliate sales percentage for Health & Wellness brands

Health & Wellness brands such as yoga accessories, fitness training solutions etc, have an incredibly high level of affiliate revenue due to their maturity in space (much like Skincare and Fashion). Their volume for repeat custom is 4-6% on average within a 3-month period, but their revenue is high due to pricing structure.

The total percentage of affiliate sales compared to entire sales revenue sits at 34% in year one and stays consistent through years two and three. We believe this is because of a yearly cycle / wear out of equipment, pushed by the New Year, as sales rise 150% in January and again by 350% in November/December time.

💡

Find out exactly how much commission you should be offering affiliates here.

Total affiliate sales percentage for Nutrition brands

Nutrition brands work closely with discount code sites and social affiliates for first time purchasers, and as such, have an incredibly high affiliate sales percentage vs the rest of their sales revenue. Nutrition brands affiliate sales sit at 37% of total sales online for the first year, 38.7% in the second year and 39.3% in the third year of affiliate programming.

💡

Nutrition brands offer very high discounts for first time buyers, so reduce their commission below their usual base line for affiliates. Full RRP sales offer an average 22% commission for both first time and repeat customers. There are currently no lifetime offers for commission in the affiliate space.

💡

Find out exactly how much commission you should be offering affiliates here.

Total affiliate sales percentage for Skincare brands

Skincare brands continue to offer the highest commission for sales vs any other industry and continue to have the highest percentage of total affiliate sales, as they draw in 500% more affiliates, too.

Skincare brands average 45% of all sales revenue through affiliate marketing. An incredibly high amount, with little to no discount code promotion. These brands solely focus on clicks and working with high-intent audiences.

💡

Find out exactly how much commission you should be offering affiliates here.

If you'd like to learn more about our in-depth data analysis of industry types within the affiliate space, just reach out to us on hello@avelonetwork.com.

Or, if you'd like to check out what the average commission within each industry is, read our latest piece about 'Average Commissions' here.