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Affiliate commission percentages

by Japanmarketer
5 replies
We are tweaking out affiliate commissions and would appreciate any input.

Our RRP is $485
Our affiliates can sell our product at the discounted price of $291
Monthly sales commission targets here:
1st Tier
1-9 product sold - 20% of total sales
10-19 product sold - 40% of total sales
20-29 product sold - 60% of total sales
100 and over - 80% of total sales

2nd Tier - 5% of referrers sales. Any affiliate they recommend to us that we approve they will get 5% based on that affiliates commission income.

We need to get 6% of $291 discounted price to break even.

We would value any feedback on our commission structure as we want to pay for performance.

Kind regards
#affiliate #commission #percentages
  • Profile picture of the author tpw
    This seems very generous.

    For most of my offers, although it must be said that I sell at a much lower price point, I will only pay up to 75% commission.

    With the numbers you are running, I think so long as the sales page converts, you will have no problems finding affiliates.
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    Bill Platt, Oklahoma USA, PlattPublishing.com
    Publish Coloring Books for Profit (WSOTD 7-30-2015)
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    • Profile picture of the author FredJones
      As Bill said above, this looks great and should be lucrative to an affiliate. Just for a psychological thing, see whether you want to merge the two buckets of 1-9 sold and 10-19 sold and make that a 30% or something - most affiliates know that it won't be too many sales for them so this may draw even more. Yes, I know that the payout will be high, but even then absolute commission numbers do play an effect of the psychology.
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      Get funded up to US $2 Million for your business as a JV (not a loan). Keep 80% of the profits.
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    • Profile picture of the author Japanmarketer
      Thanks Bill, yes I've found the higher the product price the harder it is to sell. With a cheaper product perhaps a lower commission would work, however as ours is quite high I think we really need to max out the commissions. Also we don't have a big customer list as we just started and I made the horrible mistake of making a product first and then looking for customers. I've now just completed my squeeze page and free content. Oops. Got that one backwards. But I've learned. Sounds like you have a nice offer there!
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  • Profile picture of the author David Keith
    what is your conversion rate? 20%-80% of $291 is great but if the sales page doesn't convert no one will promote the offer for long.

    Your affiliate commission percentage only tells part of the story. if your offer is converting, highlight that and "sell" affiliates on the average visitor value.

    Your plan looks like it should generate some interest though.
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    Just a Little War Room Gift.
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  • Profile picture of the author Japanmarketer
    Hi guys,

    Really appreciate the input. Currently we are offering 20% commission to our affiliates however I feel it doesn't motivate them enough. Many of our affiliates have face to face contact with potential customers. They then send them to their own sales page to convert. Other affiliates run popular blogs and just supply the link however have found they don't talk about our product much. I feel this is because they just aren't making enough cash. Our sales page converts quite well as the prospects are very targeted and have already been talked to by someone in person recommending our product.

    I thought I would try and be as generous as possible so that people can earn some serious cash and also thinking about the life time value of the customer any future offers we run, such as our membership support site at $17 a month we would keep 100% of that sale.

    It's very important we get the numbers right in the beginning as it's hard to change later. A lot of our affiliates haven't sold more than 9 product a month so they won't be bothered seeing these new commission scales.

    I figure I should do these things:
    1. Make a application form to weed out people who aren't serious.
    2. Find some good software to manage the affiliate program as it's all manual at the moment.
    3. We can't use clickbank as it's a physical product and also our affiliates are all Japanese.
    4. Anything else we should consider?

    Best regards

    We also thought, is it a good idea to reveal what we are making on our product? We just thought as it is high volume that helps reduce costs would be a good answer. Or we thought well instead of us paying advertising $ to a big company like Goog1e we prefer to build a team and pay more to affiliates.

    We are thinking to run this for a month to test the results but my feeling is, once they see the levels and the cash they can earn after reaching targets they will be more motivated.
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