By Cynthia Arko
If you want to get paid, you need to understand affiliate commission payments and the many different commission structures that exist.
With a pay-per-lead commission structure, merchants pay affiliates a flat fee or bounty for each qualified lead (customer) that is referred to the merchant site. Payments can range from 25 cents for a newsletter sign-up to upwards of $20 for a loan application. In most cases, an application must be filled out on the merchant site to qualify for the bounty payment. Typical pay-per-lead programs offer loan, credit card or insurance applications, Web hosting or a selection of FREE or trial offers. Others include programs such as
Seminars.internet.com which pays a $50 bounty for each seminar registration and Stamps.com, which pays a bounty fee of $10 for every new customer generated through an affiliate site.
Pay-per-click commission structures pay affiliates a fee for every unique visitor that is referred to the merchant site. Under recent attacks for fraud, pay-per-click models are fast becoming a real nuisance for merchants. Common pay-per-click programs include search boxes, such as About.com, Goto.com and Business.com. Pay-per-click payments range from 1 cent to 25 cents.
The pay-per-sale model is the most common and easily tracked commission structure. Merchants pay commission based on a percentage of revenue generated by the sale of a product or service from the affiliate site. Sites with a high average order, such as computer equipment, might have a lower commission level than an online bookstore. Pay-per-sale payments typically range from five to 25 percent:
- Books: 5-15 percent
- Electronics: 5-7 percent
- Flowers: 10-15 percent
- Jewelry: 5-15 percent
- Nutritional Supplements: 15-30 percent
- Music CDs: 5-10 percent
- Office Supplies: 3-15 percent
Cookies are common in pay-per-sale models. They are the messages given to a Web browser by a Web server and the browser then stores the message in a text file. The message is sent back to the server each time the browser requests a page from the server.
Cookies are used to track your visitors' shopping habits and determine when a sale from your site is eligible for affiliate commission. Merchants set specific cookie time periods and many times you will lose affiliate revenue if your visitors get distracted and return to your affiliate site at a later date or time. Cookies range from a few hours to 45 days.
For more information
about affiliate programs, check out these other articles from Cynthia Arko's ongoing weekly series:
Getting Started in Affiliate Marketing
Revenue Sharing
101
In this first in a series of weekly articles, Cynthia Arko, Product Director for internet.com's Refer-it.com affiliate
directory, presents a no-nonsense approach to generating revenue from your Web site.
How to Indentify Quality
Affiliate Programs
With literally thousands of affiliate programs available on the Internet, it could be difficult to determine which ones
are high quality. However, the process could be made easier when using some basic criteria.
Understanding Affiliate
Commission Structures
If you want to get paid, you need to understand affiliate commission payments and the many different commission
structures that exist.
Content
Sells
Making money with affiliate programs requires much hard work and continued attention to developing and retaining visitor
traffic.
|
Two tier models allow affiliates to sign up sub-affiliates in a tiered structure. When the second tier affiliate makes a sale, the primary affiliate receives some small portion of the commission. Sometimes disguised as multilevel marketing
(MLM), two tier programs could provide a lucrative ongoing revenue stream for your affiliate site. Refer-it.com maintains a complete list of two tier programs.
Hybrid
Many merchants offer a hybrid selection of pay-per-lead, pay-per-sale, pay-per-click and two tier commission structures. For example, FlowersFast.com pays 10 percent commission per sale and 5 cents pay-per-click bonuses for all new affiliates.
Recurring Revenues
Many merchants pay a recurring commission based on the spending behavior of a particular customer. The One and Only Network pays 15 percent on subscriptions plus lifetime renewals.
Standards?
Unfortunately, there is no standard frequency or payment amount. Merchants can issue checks monthly, quarterly or whenever the commission reaches a specific amount. The most common payment structure is a quarterly payment after a $50 or $100 minimum is met. Smarter merchants issue monthly checks. These merchants typically get better placement on an affiliate site and small monthly checks tend to grow into large ones.
The Fine Print
Did you know that if you send a visitor to Amazon.com through an individually linked book and the visitor does not immediately make the purchase, the commission is paid at
five percent rather the advertised 15 percent? In other words, if your visitor views another page at Amazon.com, then comes back and makes the purchase, the commission is still only five percent. Sounds pretty sneaky - but it's true. Be sure to read all the fine print on the affiliate Terms and Conditions agreements to prevent unexpected surprises when checks arrive.
Stay tuned next week as we explore how content can create stickiness and help boost affiliate sales.
Cynthia A. Arko is the Product Director for internet.com's Refer-it.com (Refer-it.com) affiliate directory. She coordinates advertising, site development, and conference planning. Cynthia helped grow Refer-it.com from a small directory of Affiliate Programs to the Web's leading resource for information about affiliate programs. She also currently maintains KidsTown Direct, a shopping portal for parents and young families. Cynthia can be reached at carko@internet.com.
IE 7
Firefox 2.0
