Instagram is rolling out a native affiliate tool — which means creators will soon be able to earn commission payments for the purchases they inspire on the app.
Creators will only be able to use the affiliate tool for products available to buy through Instagram Checkout, Instagram’s in-app payment tool.
Not only does this open up new ways for creators and influencers to earn on Instagram, but it also means brands can benefit from an entirely revenue-based form of influencer marketing.
Ready to find out more? We’re sharing all the must-know details in this blog post:
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How Instagram’s Affiliate Tool for Creators Works
Previously, select creators and influencers could tag products from the brands they work with on Instagram.
However, there was little monetary incentive for creators to drive products on behalf of brands — unless the promotion was part of a paid partnership.
Affiliate commerce changes that.
“In the coming months, we’ll begin testing a native affiliate tool that will allow creators to discover new products available on checkout, share them with their followers, and earn commissions for the purchases they drive — all within the Instagram app,” shared Instagram.
Instagram will test the tool with a small group of US-based creators and businesses including Benefit, Kopari, MAC, Pat McGrath Labs, and Sephora.
How Much Can Creators Earn With the Instagram Affiliate Tool?
As with all affiliate programs, the more you put in — the more you’ll get out.
The more regularly you promote affiliate products on your channel, the more likely you are to inspire sales with your community.
TIP: Check out this blog post for 9 Ways to Increase Instagram Engagement in 2021!
What is the Commission Rate for the Instagram Affiliate Tool?
It’s yet to be disclosed exactly how Instagram’s affiliate payment model will work, but this typically ranges between 5-25% of the final sale value, depending on product type.
Similarly, it’s still unknown how long the end-to-end payment process will take.
Most affiliate marketing programs require a sale to be fully closed before any commission payment is released, which means the return or exchange window has completely ended. This usually takes 60-90 days but can vary depending on the individual brand partner.
How Does Disclosure Work for the Instagram Affiliate Tool?
In terms of disclosure, Instagram will display a label above all posts that contain affiliate links to brand products.
“[People] will see “eligible for commission” at the top of the post, so it’s clear that their purchases help support that creator,” Instagram shared.
However, the FTC advises creators not to “assume a platform’s built-in disclosure tool is good enough,” and recommends using these tools alongside clear and accurate disclosure.
What Does Instagram’s Affiliate Tool Mean for Brands?
To start, Instagram’s affiliate tool will only be available to a limited number of brands and creators.
However, Instagram has confirmed the tool will “expand to more partners in the future.”
This opens up a huge opportunity for brands looking to drive sales on the platform, with affiliate marketing often perceived as a much safer return on investment.
Affiliate payments are typically only made based on closed sales, making them a more guaranteed form of influencer marketing.
Instagram’s move into affiliate marketing comes as no big surprise — it is the final piece to a successful 3-sided social commerce marketplace:
This makes the inspiration-to-purchase experience easier than ever for people using Instagram, with infinite possibilities for growth.
Despite such obvious benefits, brands should note that Instagram charges a transaction fee of 5% per shipment or a flat fee of $0.40 for shipments of $8.00 or less.
Similarly, brands lose out on valuable customer data (such as emails) as all communications are handled by Instagram rather than the brand directly for Checkout transactions.
With this in mind, it’s worth pairing Instagram’s native e-commerce tools with a strategy to drive traffic to your own domain.
One of the best ways to do this is by adding a link in your bio.
TIP: Check out this blog post for How to Craft the Perfect Instagram Bio!
With a fully optimized link on your bio driving traffic to your website and Instagram’s native e-commerce tools, you have all grounds covered for making sales on the app.
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