Affiliate Commission Rates

[rb30]

I wondered if anyone had any experience with playing with setting affiliate commission rates.

I found a great interview with Tim from 2003 in the Marketing Experiments Journal (http://www.marketingexperiments.com/improving-website-conversion/affiliate-marketing-analysis.html) where he says aff. sales only account for 1% of turnover but planned to relaunch with a higher commission rates - I expect they account for a lot more than 1%, even that small %'age is better than 100% of nothing. In the book he suggests between 15-40% .

Alex Mandossian (Teleseminar guru) suggests exploding your product sales with a 90% commission fee for a product launch (http://www.alexmandossian.com/2007/11/21/%e2%80%9cpay-affiliates-90-commissions-for-fast-growth%e2%80%9d/) which makes sense using his system for selling the actual affiliate program but could this also apply to product sales too?

[Vagabond]

I wondered if anyone had any experience with playing with setting affiliate commission rates.

I found a great interview with Tim from 2003 in the Marketing Experiments Journal (http://www.marketingexperiments.com/improving-website-conversion/affiliate-marketing-analysis.html) where he says aff. sales only account for 1% of turnover but planned to relaunch with a higher commission rates - I expect they account for a lot more than 1%, even that small %'age is better than 100% of nothing. In the book he suggests between 15-40% .

Alex Mandossian (Teleseminar guru) suggests exploding your product sales with a 90% commission fee for a product launch (http://www.alexmandossian.com/2007/11/21/%e2%80%9cpay-affiliates-90-commissions-for-fast-growth%e2%80%9d/) which makes sense using his system for selling the actual affiliate program but could this also apply to product sales too?



Kinda messed up that he had a poor experience with myaffiliateprogram.com but then recommended them in his book? whats up with that?

[rb30]

Their system is good but he critisises their premium service, which is where you pay a fee and they are supposed to actively recruit quality affiliates for you.

[Vagabond]

can you please share any info you find thats more recent than those 2003 interviews. The affiliate marketing industry has changed SO much in the past 5 years, I'd love to get access to best practices, whats working and what isn't for when I get to the point where I need to design my own affiliate marketing program.

It's hard to find information on the advertiser/owner side of it, its drowned out by everyone looking for info on being publishers and doing the marketing..

[rb30]

the question I was asking was does anyone have practical experience of setting affiliate commission rates?

[webgal]

Either James Gray or Italian Job could answer that.

[italian_job]

Thanks for inviting me to the discussion.

ASSUMPTIONS: you are asking us to give you our insights on setting up affiliate commissions rates for info-products. Infoproducts sold via Clickbank can give affiliates a commission of up to 75% of the sale price.

1) First of all, YOU must start selling your product yourself. If YOU can't sell the product, how can anyone else? But being able to sell a product is not enough. You must PROFITABLY sell your infoproduct. If you have to spend $100 in Adwords (I assume you know very well how to use Adwords), and your product sale price is $90, you are already in the red.

==> do not use affiiliates for product and marketing testing.

2) Once you KNOW how to sell your product, write a precise road map for your affiliates, with ideas regarding ways to sell your product (articles they can send to their list, example of PROVEN adwords ad, keyword lists etc). Allow them to add their google adwords keyword tracking code to your thank you page, so that they can discover new profitable keywords and also explore the CONTENT match in google (which is literally a goldmine for me, but content match is definitely NOT for newbies)

3) Give your affiliates the highest payout possible (normally it is 75% for Clickbank). Also, create up-sell products that your customer can add "to their shopping cart" once at checkout. That will increase your affiliates' profits...and yours.

4) Once your master the art of managing affiliates, identify the very few that will drive 80% of your affiliate sales, and work with them. Run extra promotions for your top affiliates.

The reality is you will struggle to find professional affiliates that know how to really push your product. Also because if they are at least a little bit smart, they will do what I do: I start as an affiliate for a product, I test all different methods to push the product. If they product sells....they I become a publisher and start selling a similar product myself (you can hire a ghost writer in elance for $1,000 and your product development is out of the way).

On this forum way too many people are focused on product development. That is the last of my problems. I focus nearly 100% on marketing.

Food for thought: differences between being an affiliate Vs being a publisher.

The affiliate gets 75% of the profits (- advertising expenses) with no customer service hassle.

The publisher gets 25% of the affliate sales AND 100% of the sale he makes himself. But also gets 100% of the customer service.

Does the extra money in the publisher's pocket justify the customer service?

One more consideration:

I would never waste my time in selling physical products online (unless via dropshipping, which is a method I also use, and I have a 50% profit margin as well as the potential for returning customers).



Hope this helps.

ciao

[webgal]

3) Give your affiliates the highest payout possible (normally it is 75% for Clickbank). Also, create up-sell products that your customer can add "to their shopping cart" once at checkout. That will increase your affiliates' profits...and yours.

Hope this helps.

ciao

Yes it does help. Really great post Danny. It really boils the process down and compartmentalizes what needs to be focused on.

Can you elaborate on the above? The up-sell part? I understand what up-sell is but I'm not understanding how you'd add products to a sales page. I would have thought you could only prepare them for future purchases with the email capture.

[italian_job]

sure.

Basically, your first "long" sales page should follow the AIDA marketing model:

Attention: strong, very clear headline that pulls the readers' attention
Interest: testimonials
Desire: Benefits of your product (and not features)
Action: Order now or you will miss this deal forever this great oppty. Add here all the fantastic free bonuses your customer gets.

Once he clicks on "order now", you bring him to another super special sales page that tells him that for this time only, he will be able to upgrade to your products "Advanced" version for just an extra $30 or to your "Deluxe" version for just an extra $50.

Watch this now....if you want to be unethic, you can also ALREADY tick the upsells, so that the customers has to manually deselect the options or he will buy them...

This is not an ethic way to do it....your choice.

In clickbank you can find some great publishers that master the art of upselling.

Another way to upsell is to integrate your "muse" with an autoresponder like Aweber. Do that on the front end of your business (to capture prospects) AND on the back end of your business (to capture customers).

In this way you have 2 DIFFERENT lists, which means different mindsets, so you can not send those 2 different people the same newsletter. One lists knows you and trusts you, the other list is still sitting on the fences. Treat them differently.


Hope this helps. Ciao


============================================

Would you like to sell Info-Products online?


www.JamesBradley.info

=============================================

hope this helps

ciao

[rb30]

Thanks italian_job. This is good stuff, so much information condensed. I will have to print out and read several times.

Product development has largely been delayed due to agreeing terms with the copyright owner. Actual design to production will take less than a month. I agree with your philosophy about marketing.

My marketing will include:
PPC
Offline (Print ads, trade fairs, direct mail)
Affilliates (online & offline)

Frontsell, Upsell, Backsell. Every opportunity needs to be exploited at the same time its important not to become a workaholic!

[italian_job]

hello

you say that getting an agreement with the copyright owner is delaying your project.

Why don't you look at public domain works? There is so much QUALITY content in the public domain....it is a goldmine (no joke).

ciao

[rb30]

Yes! Will look in to that and implement at the right time.

My agreement is settled though and production is in full swing, initial start up costs were relatively low but I think the leg work (time/research/negotiations) will pay off. The deeper the digging the more gold will be found - its niche and no one else has ventured this way because of knowledge and lack of technical ability. The partnering deal I have made with the production company should reduce my workload. Believe me I've burnt myself out in the past so all i'm after is my TMI. Any sales made beyond that are great but others can chase those and I will get my percentage for their efforts.

Am checking out your other posts for more nuggets of gold.

Thanks again.

[italian_job]

ah ah!

I should start claiming royalties for my juicy golden posts!

:-)

[lookgreatmakemoney]

Hi Everyone,
I went to an internet seminar the other day and basically the presenter stated the following:
In order to make $3,000.00 a month on the internet, you needed the following:

1. 500 visitors a day to your website
2. pay ten cents per click on googleadwords and have a $50.00 a day budget
3. have a $30.00 info product to sell

This, at just a 1% conversion, would result in 5 sales a day or $150.00. $50.00 a day for advertising on googleadwords, leaves you $100.00 a day profit or $3,000 a month. Then he said, just keep repeating it with more websites till you are making as much as you need.

First, is this realistic?
Second, I do not have an ebook done yet so I wanted to go on to clickbank and promote one of their products with the above formula. Should I just pick the most popular clickbank product? or are those over saturated? Please advise, thanks, Lisa