This will provide useful information if youre planning to start affiliate marketing. You earn profit comes from sales commission. Most affiliates are interested in products with high sales commissions. Merchants are interested in selling their products and pay as little commission as possible. This will allow them to get the maximum benefit.
The following information is intended to guide merchants on how to set sales commission. Itll also help affiliates choose products on the basis of sales commission offered.
Affiliate Marketers and Sales Commission
Any new affiliate marketer that is looking to enter the field should as the following questions:
Will I be able to earn commission by selling merchant’s products? What will be my percentage? Will I be able to earn a good amount from selling the products or not?
The three most popular types of affiliate programs are Pay per Sale, Pay per Lead and Pay per Click.
With the pay per sale option, a merchant will pay the affiliates on every sale. The commission can range from 10-50%. The really hot products in the market usually give less commission. In a pay per lead option, the affiliate is paid for each person that is registered on the merchants website. A visitor is offered to use a free product on a trial basis and their credit card information is stored. The credit card is not charged during the trial but will be charged after the trial period if the visitor is interested. With a pay per click option, the affiliate is paid for every click that is made on his affiliate link regardless if the visitor makes a purchase or not. Obviously the commission is much less compared to the other options.
When youre first starting you only want to select products that are hot and making sales, even if the commission is lower. A larger volume of sales will compensate you. If a product is chosen based on the commission and not demand then you may suffer and not see the profit that you would like. You should mix in some new products in with the high demand products to help increase your profits. Dont be afraid to remove products if they arent making the sales that you expect them too, especially the new products.
When your website has a good and constant flow of traffic, the pay per click is a good option for you. This is because youre paid for every click and not required to make any sales.
Merchants and Sales Commission
As a merchant, you always want to offer a commission that is acceptable to both your affiliates and you. A very low commission will not draw the interest from affiliates that you would like. On the other hand, a high commission will attract affiliates but you wont see that profit that you would like.
You should offer a high commission to start with if youre a merchant and going to introduce a new product to the market. It may be around 50% of the sale. This helps attract a large number of affiliates in little time. The higher commission will help motivate the affiliates make sales so they earn commission. Once the product has become popular and in demand, the commission can be lowered gradually.
As a conclusion, setting a reasonable commission is a factor for merchants to do good business. Affiliate marketers should also select products that are giving them profit and easy to sell.