Affiliate programs see shifts during coronavirus outbreak

As the coronavirus outbreak continues to grow, many ecommerce sites are starting to pause their affiliate programs or reduce the commission levels.

This comes at a time when ecommerce in general is seeing huge spikes as people try to avoid stores — so it might seem odd for online stores to curtail sharing revenue with affiliates.

However, many sites are also added expenses and issues with fulfilling orders — ranging from increased labor costs, delayed shipping and delivery and capacity issues.

Because of this, companies are left with either raising prices or cutting costs wherever they can (or both). Depending on profit margins, cutting out even small affiliate commissions can make a big difference in financial stability.

It’s also worth noting that affiliate programs are often viewed as a customer acquisition method — in other words, signing up new customers who might not have heard of a particular online store or service before.

From that perspective, it might make sense to curtail signups and orders to some extent by lowering or eliminating affiliate commission — especially if the growth means a site can’t fill orders, leading to customer dissatisfaction.

Another area of concern is that affiliate programs could become rife with abuse and fraud. This is a common issue with affiliate marketing under normal circumstances, but some sites, particularly those selling high demand products, could see a sharp uptick in that now as site owners flood their pages with links and content designed to surface on specific search terms.

Many affiliate programs are also highly incentivized with discount codes and special offers, which can be difficult for affiliates to eat the cost of along with higher operating costs and increased demand.

All that said, it can be a delicate balancing act for ecommerce sites to keep publishers, customers and financials happy and stable.

Cutting off or reducing affiliate payments risks losing loyal affiliates — especially those who have been promoting a site or product well before coronavirus.

That said, if signing up new customers leads to logistical challenges, it’s a good idea for store owners to communicate this to affiliates — but care should be used because some may see it as “exploitive” to cut back payments when referrals and signups (and therefore presumably revenue) are up.

In general, reducing commission levels or cutting back on special offers could be a good compromise, as long as there’s adequate reasoning to justify this and that customers can’t get better offers easily via another source (such as just visit your site).

Some affiliate programs are also requesting that website owners remove all affiliate links during the programs’ suspensions — something that probably isn’t realistic to expect a good number of site operators to do.

Likewise, it’s also worth noting that some affiliate platforms require site owners to “accept” new terms manually — again something that might not be a high priority for many.

If possible, stores could handle commission reductions or cutoffs on the backend, allowing links to remain active.