When you sign up for an affiliate program, whether that’s through an individual vendor or via a network, your motivations are pretty obvious: you want to make some money. And if you’re going to try and make some cash through affiliate marketing, then you may as well try to make as much of it as you possibly can for the least amount of effort. That only makes sense.
Choosing the right offer to promote can depend on a lot of different factors. If you have specific experience and expertise in a particular niche, that can be very helpful in formulating how best to promote the affiliate offer. You’ll naturally also want to look at the payout levels, but it’s important to look beyond the raw numbers themselves to determine where you’ll find the greatest profitability.
Dollar Amounts or Percentages
You see two affiliate offers from two competing advertisers that sell a similar product within the same niche. One affiliate program offers you a $50 flat commission and the other one offers you 25% of the first sale. Which offer will make you more money?
The answer is, understandably, quite ambiguous, because you don’t know how much that first sale is going to be. If a typical purchase from the second vendor is for a product that is $100, then you’ll only stand to make a $25 commission on the sale. On the other hand, if the typical purchase involves a product that is $1000, then you stand to earn a $250 commission. That sounds a heck of a lot better.
While it is certainly useful when affiliate networks allow you to sort the list of affiliate offers based on the commission rate (whether it’s in dollars or as a percentage), you need to look past these numbers to discern exactly which ones will actually net you more money. There’s no point in earning 80% of a $1 sale when you can put in the same effort to earn 10% of $1000 sale, right?
Average Conversion Rates
Bearing in mind that “average” is simply average, seeing how well other affiliates are performing with the same offer can give you some sense of how popular that product or service may be. Again, this is why it is important to look past any individual number to analyze the picture as a whole.
It may be great if there’s an offer with high payouts, but that doesn’t mean very much if the conversion rate is remarkably low. You might earn one hefty commission once in a blue moon. By contrast, an offer that may not have as high a payout but converts remarkably well could prove to be a lot more profitable overall.
Residuals and Recurring Payments
Another area where you’ll want to spend some time is differentiating between programs that offer a one-time commission and those that offer ongoing commissions for a recurring service. Membership programs, if they really are as great as they claim to be and have a great retention rate, can prove to be great money makers.
In this way, while you may be forgoing the more lucrative up-front payment for referring the member, you could earn a lot more in the long run because that member sticks around and you keep earning a piece of the pie. Passive income is the best kind of income and residual payment schemes like these can be a great way to take yourself out of the equation.
Leave Nothing on the Table
Figuring out which affiliate program and white commission rate is the best goes a lot further than looking at any individual number. You need to consider not only the percentage or dollar amount, but also how it relates to the actual sales you are referring, the conversion rate, and whether you have the opportunity to earn recurring commissions from the program too.
And as with just about everything to do with not only affiliate marketing but making money on the Internet in general, test everything. What works for one person may not work for another and what didn’t work for the other guy could be incredibly lucrative for you. Trust your gut and take a chance, but base those decisions on some real data.