How much to pay affiliates?

by BenQ
21 replies
I have a monthly subscription service priced at $199/month. It's in the active trader niche. Of that $199, 20% goes to a vendor that broadcasts my info to clients.

I'd like to use affiliate marketing to expand, but not quite sure what would make it attractive to affiliates. Obviously the higher payout the better I'm sure they'd like, but I need to make it affordable for me too.

Any ideas on how to scructure it for affiliates would be appreciated.
#affiliates #pay
  • Profile picture of the author Tyrus Antas
    You already answered it: as high as possible as to attract them, but not high enough that it will eat away all your profits.

    Tyrus
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  • Profile picture of the author SeanSupplee
    a 50/50 split always seems tasteful and some private deals with jv members if you know of someone who you really want to promote your product you could even do 100% or 75% reason is your building your list here as well. So your getting his buyers onto your list for future projects.
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    • Profile picture of the author Muhammad Hassan
      '50% of something is better than 100% of nothing.'

      Read or heard the quote before, but cannot remember where from. However, I do agree with it.

      If you can get 'active' affiliates then they will bring in more money than if you are just promoting by yourself.

      For example, if you have 10 affiliates raising $10,000 altogether and you pay 50% then you will be giving then $5,000.

      Some people will say that giving away $5,000 is too much. However, they are looking at the wrong $5,000.

      The other $5,000 you earned by doing nothing - the affiliates did the work and you are $5,000 richer from it.

      The more money you are prepared to give affiliates the more affiliates you will get, the more affiliates the more promotion you will get, the more promotion you will get the more money you make.

      However, what Tyrus says above is also true.

      Find a balance in getting as many affiliates to make you as much money as possible without giving them too much money that your business stops being viable.


      Also, you get clients in a subscription service where you have contact with them regularly. This allows you to build a relationship with them and to educate them about you.

      You are then in a position at a later date to offer more premium services to them. You are in contact with them directly so no affiliates needed so you get to keep 100% of the new money.

      This loss leading system is what some people actually employ. They give a massive affiliate percentage at the beginning so that affiliates get a lot of people into their selling system. The seller might actually make a loss or break even with the affiliate commission offered.

      Once the affiliates get people into the system the seller sells to them and keeps 100% of the profit.
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      • Profile picture of the author edhan
        Yes. Normally I go for 50%. That will allows the affiliates to work for it. Once you get a happy affiliate, you will see money rolling in.

        Better make them happy and you get your fair share as well since they will be promoting for you. It is new clients so you have lots to gain.
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  • Profile picture of the author JakeRhodes
    Also consider what other similar services offer in the way of an affiliate fee. It pays to offer 5% more so all those potential affiliates swarm towards you.
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  • Profile picture of the author roukarous
    I would go for a 50/50 split which seems fair for both.
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  • Profile picture of the author lantil5
    Banned
    I would suggest to go ahead with 75% . As you have very nice price and it will not hurt your expense anyhow . But you will get more response by this .
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  • Profile picture of the author Andy Fletcher
    Everyone seems to be focusing on offering as high a % as possible. It's definitely a good plan but don't forget there's a lot more to consider in attracting affiliates.

    I for one would much rather promote a 50% commission product that has done all the work for me down to writing an email I can send to my list than a 75% commission product that will take a lot of work to promote.
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    • Profile picture of the author Brad Spencer
      Andy,

      I totally agree with you on this one.

      For example, running contests, providing prizes, sending random checks of large sums of cash for the top affiliates are all great ideas for promoting a product.

      Commission rate is important but quality product along with great tools to promote it go a lot further than just offering cash.

      Make it easy for affiliates and they will promote you in droves!!!

      Cheers,

      Brad Spencer


      Originally Posted by Andy Fletcher View Post

      Everyone seems to be focusing on offering as high a % as possible. It's definitely a good plan but don't forget there's a lot more to consider in attracting affiliates.

      I for one would much rather promote a 50% commission product that has done all the work for me down to writing an email I can send to my list than a 75% commission product that will take a lot of work to promote.
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  • Profile picture of the author nicholas08
    May be you can start with 50%. See the result and adjust your plan. That's a good start.
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  • Profile picture of the author BenQ
    Thanks for all the info. I see also now that I should have some stuff prepared for the affiliates to make it easier for them to market.
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    • Profile picture of the author Andy Fletcher
      Originally Posted by Benq View Post

      Thanks for all the info. I see also now that I should have some stuff prepared for the affiliates to make it easier for them to market.
      Definitely. If you need any help there are a ton of people providing such services. I can't remember anyone specifically but I was researching it a little while ago and there were plenty.

      There's also a load of good posts (easily found with a forum search) detailing the best stuff to provide for your affiliates.
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  • Profile picture of the author BenQ
    Yes, I do need some help with figuring out what to provide them. I'll search around. If you know of anybody that does that kind of stuff, please let me know.
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  • Profile picture of the author Andy Fletcher
    I dug through my posts to see who was recommended to me. Here's the best WSO I found -

    http://www.warriorforum.com/warrior-...tes-today.html

    Please note I haven't used this service yet so please don't take this as a testimonial or anything. Just a suggestions.
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    • Profile picture of the author Jesica-inc
      Banned
      i would say between 50% - 75%

      the higher affiliate payout will attract more affiliates, based on what i have read.

      hope that helps

      Jesica
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  • Profile picture of the author pritesh
    anywhere between 50-70 is good..
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  • You can look at it from a couple of ways. One it might be worth your time to create a program that pays residuals. That way you payout less up front, but if people stay subsribed the affiliate is rewarded as well. You can choose a tiered structure where your better affilaites are rewarded a higher percentage based on the number of sign ups for a given period. I for one like to promote residual programs because if the product/service is good in the long term I end up making more. If it were me I'd go with a fixed payout upfront then a residual. To just assign a percentage payout is the quick and easy way however.
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  • Profile picture of the author James Spinosa
    Well, it depends on how much promotion you have done for the product yourself. Enough that you will get the traffic you are looking for, while still keeping a chunk of the profits

    In the end the only one that can determine your affiliate commission is you, but for my products I like to give a 60% commission. This strikes a good balance of affiliates willing to promote my products while giving me a nice profit on each sale they bring in.
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  • Profile picture of the author MattSanti
    Another idea that some people do have as a lead generator to build the opt in list is to give 100% commission even on a fairly decent price product -say $27 (only if it is digital). That way the vendor can make money on the upsell and back end later on down the road.
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  • You will want to set up fat deals with JV partners that you really want maybe even give them 100% for the first 3 days for example but just normal affiliates 50% should be ok. of course 75% is more likely to bring you more affiliates but not always better quality ; )
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  • Test, test, test. I always recommend just test a few rates with your market and see how the respond. You can always start low and come up but its much harder to start high and come down becaue affiliates will get annoyed... Good Luck
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