Which Type of Affiliate Program is Right for You?

Author: Jo Mark

| Posted: 07-04-2008 | Comments: 0 | Views: 20 | Rating: (53)

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There are several different types of affiliate programs. The typical affiliate program pays you a one-time commission when a sale is completed. The commissions can vary anywhere from 30% to 75% of the sale price. Most people participate in this type of affiliate program.

Another affiliate program that many people ignore is the residual affiliate program. Residual programs typically pay a much lower commission rate. Commissions range between 5% and 15% of the sale price. Because of the lower payouts, they are less popular. However, if you are going to be in business for the long haul, residual programs may be more profitable in the long run.

Residual affiliate programs are most common for products that involve a monthly payment, so you will be paid each month. And your commission will continue to accrue for as long as your customer continues to make his monthly payments.

Let’s consider an example using two autoresponder companies. ABC Company pays a one time upfront commission of fifty dollars for each sale. In that case, you receive one payment of fifty dollars.

XYZ Company uses a residual affiliate system that pays 15%. If they charge your customer twenty dollars each month, you will receive three dollars each month for as long as the customer continues to make payments. If the customer remains with XYZ for 16 months, you will have netted forty-eight dollars. At that point, you are making the same amount of money that you would have made by using ABC Companies commission structure. But, you will continue to be paid for the life of the customer. This could be five years or more. In that case, you would make much more money with the residual affiliate program.

I like to use some of each type of affiliate program. To be honest, if you just have one customer in a residual program, it’s not worthwhile. But if you can get 20 or 50, it starts to add up to some very nice money. So if you are going to be recommending a program and can sign up a large number of people, the residual affiliate program may be a great deal for you.

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