Factors That Affect Your Affiliate Marketing Commissions
Statistics will also help you determine how you can win in terms of affiliate marketing commissions, without which your program will be inadequate and your efforts useless. You'll also need to learn how to 'read' the numbers so you can maintain a sufficient balance in the factors that affect your future income.
Increasing your affiliate marketing commissions
Earnings from affiliate marketing programs come in the form of commissions, similar to the type of earnings that salespeople receive based on the sales they generate. Commissions are a type of performance-based income, in that the amount will depend on how much an affiliate can produce based on the sales brought in by his leads.
There are several factors that will affect the amount of commissions you'll earn from an affiliate marketing program. These are:
The choice of affiliate marketing program
Not every affiliate marketing program pays the same amount of commissions to its affiliates. Affiliates will have a choice of programs offering a low pay scale ranging from about 5 to 15 percent per sale or performance while others may pay as much as 60 to 75 percent, depending on the type of products or services being offered.
All things being equal, choosing the program that pays a higher commission will result to higher sales.
This can be tricky, however. If you have the niche or at least a good market following, taking advantage of affiliate marketing programs that pay higher commissions will be a no-brainer. However, if you cannot capture the desired market, you might have to experiment with a combination of programs that will bring in the kind of income that is satisfactory to you.
By maximizing your ability and opportunity and building your reputation in the process, you will be able to earn a decent income and solidify your presence at the same time.
The type of earning opportunity an affiliate program can offer will also make a difference in the amount of commissions you can hope to earn. Two-tier programs, for example, offer a better income-generating opportunity than flat programs. Two-tiers offer two income sources, generally from commissions on sales of a product or service and from recruitment of a new affiliate. Income from recruitment can either be a one-time cut (usually a flat rate) for recruiting each new member or a commission off of those members' future earnings.
Some affiliate marketing programs may also offer recurring commissions, in which an affiliate can earn each time their lead or member renews a subscription or a membership. This type of program means you can hope to earn for as long as your leads or recruits continue to use an affiliate product or service.
Since choosing these types of affiliate programs can make a huge difference in the amount of commissions you can earn from an affiliate marketing program, it makes more practical sense to consider carefully the type of future earnings you can potentially generate.
The product
Affiliate marketing commissions will also depend on the type of products or services the program offers. A product that has the misfortune to belong to a market that's already heavily saturated will be difficult to sell. On the other hand, a popular item can mean large sales if you have a strong and ready market.
Find out how you can perform based on the statistics offered by the affiliate marketing program you wish to join. ClickBank, for example, allows you to view a product's potential based on its past performance.
The market
Affiliate marketing commissions rely heavily on how effective an affiliate's sales and marketing strategies are. In many ways, they will also depend on the relative popularity of the affiliate and on the type of market he chooses to sell to. A small but highly targeted market is more likely to bring in higher commissions for an affiliate while a fairly large but generic market may not produce the same results.
The conversion period
Once you have selected the best and most profitable affiliate marketing program in terms of commissions, your next concern would be how to shorten the conversion period for your customers.
The conversion period refers to the time from which you bring in your lead until the time that he performs a desired action. This action can vary – a lead may subscribe to a service, purchase a product, participate in an online poll or become a recruit. Since the incentive that drives leads to perform a specific action can vary, conversion periods can last anywhere from a very short 24 hours to about 30 to 60 days.
Your job as an affiliate is to persuade your leads to shorten their conversion period and thus increase your affiliate marketing commissions within a reasonable amount of time.
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