A Question to Affiliate Marketers

by AbhiJ
11 replies
I have a question to all Affiliate- Marketers. Why do you think a valuable top notch product will offer 50% or more commission just to get customers ? Does this mean the product is overpriced initially to offer affiliate commissions ? For example, take I-Phone or Nokia Smartphone would you think Apple/Nokia will offer you 50% commission just to bring customers ? It raises question regarding the inherent value of the product.
Maybe I am wrong and there are good products which offer affiliates 10-20% of commission. IMO that is the product which customers will value.
#affiliate #marketers #question
  • Profile picture of the author Frank Donovan
    Originally Posted by AbhiJ View Post

    For example, take I-Phone or Nokia Smartphone would you think Apple/Nokia will offer you 50% commission just to bring customers ? It raises question regarding the inherent value of the product.
    No, it doesn't. It's simply another means of marketing. Affiliates can deliver more potential buyers than the product owner can do on his own.

    Brands such as Apple and Nokia have spent (and continue to spend) millions on marketing - does that question the inherent value of their products? All marketing and development costs are ultimately reflected in a product's selling price.

    .
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    • Profile picture of the author AbhiJ
      Originally Posted by Frank Donovan View Post


      Brands such as Apple and Nokia have spent (and continue to spend) millions on marketing - does that question the inherent value of their products? All marketing and development costs are ultimately reflected in a product's selling price.

      .
      Apple and Nokia spend millions but they make billions, so marketing costs is NOT 50% of the sales. Initially in the promotion phase its understandable if they marketing costs 50% of sale, but 50-80% for entire life cycle (like many click-bank products) is just too high IMHO.
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      • Profile picture of the author DavidOlsen
        Originally Posted by AbhiJ View Post

        Apple and Nokia spend millions but they make billions, so marketing costs is NOT 50% of the sales. Initially in the promotion phase its understandable if they marketing costs 50% of sale, but 50-80% for entire life cycle (like many click-bank products) is just too high IMHO.
        Again,we're not just talking about the initial product. They are paying to get the lifetime value of the customer.

        Like Frank Donovan said, Apple sells the phone to get the itunes business.
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  • Profile picture of the author lotsofsnow
    No, the products are not overpriced.

    You might want to read up a little on marketing and pricing strategies and study different business models.

    Just an example:

    It looks like Apple is in the phone business - wrong.

    They distribute phone so that people buy music and then
    have to continue with Apple as their music is not portable.

    Yes, the iPhones are neat (I have one ) but the real business is the music.

    Just do a little digging and you'll see.
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  • Profile picture of the author DavidOlsen
    No, marketing costs money. If a company is not paying affiliate commissions, they are paying for some other type of marketing/advertising.

    Also, businesses can often afford to take a loss on the initial product (by paying a big commission) in order to gain a new customer that will probably by additional products and services in the future.

    The lifetime value of a customer can be huge in some markets so that initial 50% commission is a small price to pay.
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  • Profile picture of the author Brent Stangel
    but 50-80% for entire life cycle (like many click-bank products) is just too high IMHO.
    You just don't understand how it works.

    Let's say I sell 10 products per day on my own. I clear $20 on each. So I'm clearing $200 per day.

    Now, with very little effort, I get affiliates to promote as well. This cost me nothing so I pay 75% on product sales.

    So , affiliate one sells two products a day, which nets me $10 and two new customers, which I wouldn't of had otherwise.

    Offering 75% vs 10-20% gets a lot more affiliates interested in promoting.
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    • Profile picture of the author AbhiJ
      Originally Posted by Brent Stangel View Post

      You just don't understand how it works.

      Let's say I sell 10 products per day on my own. I clear $20 on each. So I'm clearing $200 per day.

      Now, with very little effort, I get affiliates to promote as well. This cost me nothing so I pay 75% on product sales.

      So , affiliate one sells two products a day, which nets me $10 and two new customers, which I wouldn't of had otherwise.

      Offering 75% vs 10-20% gets a lot more affiliates interested in promoting.
      Thanks man, it makes perfect sense now. The way you put it, the customers are not loosing rather you are taking a cut. That was my main concern from the beginning.

      I am a newbie, trying to figure things out and taking everything with a pinch of salt.
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      • Profile picture of the author hustlinsmoke
        It all goes back to the money is in the list.
        I do not launch much anymore because I try to only launch quality products.

        I also want to give 75 percent for the front end offer and usually 100 percent. Then make some on the oto's to cover expenses. Say 50 percent.

        I would rather give it all away and I have to just get those emails on my list.
        If your new to Im and you don't have a list this is even more valuable to you.

        So do not get greedy, give it all away and some out of your pocket too. Have a product that you didn't include in your launch, after sending a couple of valuable emails to your new list offer the product to them. You have no affiliates to pay and everything goes into your pocket on that one.
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  • Profile picture of the author AbhiJ
    Alexa Smith has responded explaining the difference between physical products and information products. Clearly, he knows a thing or two about IM . So I will rest the case.
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  • Profile picture of the author Jeffery Moss
    The only sites offering a 75% commission are for Clickbank or digital products, which have low overhead. Most other tangible products offer a low commission because there are actual manufacturing and warehousing costs involved in the product creation.
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  • Profile picture of the author Samuel Adams
    Another factor to consider is how a tangible product will need to be shipped to the customer as is the situation with a phone or computer. For this reason, the commission has to be lower or else the product maker won't be able to cover their own costs or make a profit.
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