Best Go @ Contests / Leaderboards

4 replies
• |
If I was to run a contest with the affiliates when I launch a product..
how can I calculate so that the rewards are attractive yet I don't lose too much money on giving out?

Let's say the product costs \$17 (75% commission), OTO \$27 (50% commission) .. how many sales as a goal should I set for the affiliates to achieve, that will make me profit the most?

If I were to use the 25% per sale from the affiliate to reward them back.. then with 100 sales, i can't pay over \$425 otherwise I won't make any money from the affiliate (assuming there are no OTOs...)

What are you experiences and suggestions?
• Maybe what you do is set up a system that rewards those with more sales, with higher commission rates.

For example, I know you're starting at 75%, which is quite generous, but say you start at 60%.

Then you come up with a chart that might look a little like this:
• 0-50 sales = 60% commission
• 51-100 sales = 70% commission
• 101-200 sales = 80% commission
• 300+ sales = 90% commission

In this way, you will always be profitable. Let's do a little math as well as to how much money you'd make (for now let's just consider the sale of the original \$17 product and disregard to OTO) based on those commission rates and the amount of sales:
• 50 sales @ 60% (you'd make the other 40%) = \$340
• 100 sales @ 70% (you'd make the other 30%) = \$510
• 200 sales @ 80% (you'd make the other 20%) = \$680
• 300 sales @ 90% (you'd make the other 10%) = \$510

Now this is what is really interesting... see how when you offer a 90% commission for 300 sales, you end up making less money than at the 200 sale mark? The idea here may be to graph these points into a smooth curve and figure out the max you could afford to give away commission-wise.

Of course, you don't have to listen to me whatsoever. I had this idea come to mind from a part time sales position I have. Currently I make 25% of the gross margin on any sale I make.

Gross margin = sales price - cost

As it would apply to us, you really don't have a fixed "cost", but hopefully you see my point. I think incentivizing based off percentages of return is far more effective than simply giving out sums of cash, and percentages are scalable from 1 to 10000000 sales.

Hope this helps.

Cheers,
Ben
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• Than you so much, I think this is a good idea!

If 300 at 90% is less than 200 at 80%, then why don't I stop at 80%
I just did a simple calculation:

\$17 * 50 sales @ 50% (you'd make the other 50%) = (I'd make \$425)
\$17 * 100 sales @ 60% (you'd make the other 40%) = (I'd make \$680)
\$17 * 150 sales @ 70% (you'd make the other 30%) = (I'd make \$768)
\$17 * 200 sales @ 80% (you'd make the other 20%) = (I'd make \$720)

Hmmmm, still the last one is a bit less than the one before...
how can I actualy avoid this happening? because if I were to run this
contest, i'd still have to use that part of money to spend to reward them...

By the way, does JVzoo or W+ have this option for setting up the contest? anyone?
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• Why not set a fixed prize for the contest for the places 1,2,3, and a fixed number of sales to get to each spot ? Something like.. The first affiliate who gets 200 sells will get .. dunno, do the math, see what`s working. The second one to reach 200 sells will only get.. less.. and so forth.. and do that every month, so if affs don`t get to the number of sells you don`t have to give prizes, making them work harder.. just a thought..
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•  Originally Posted by mrgoe Why not set a fixed prize for the contest for the places 1,2,3, and a fixed number of sales to get to each spot ? Something like.. The first affiliate who gets 200 sells will get .. dunno, do the math, see what`s working. The second one to reach 200 sells will only get.. less.. and so forth.. and do that every month, so if affs don`t get to the number of sells you don`t have to give prizes, making them work harder.. just a thought..
I think that'd be an good idea as well, however, there are just too much variables that someone could've hit 200 faster than the others, but the others could win the award for the most sales etc...

It's just hard to determine a right amount award, as well as the rules......
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