This article will provide some useful information to those who are planning to start affiliate marketing. The profit in this business is the sales commission. Affiliates are interested in the products that offer high sales commissions. The merchants want to sell their products but they want to pay less sales commission to get the maximum benefit.
This article will guide the merchants on how to set their sales commission. Also it will tell the affiliates how to choose the products on the basis of sales commission offered.
Affiliate Marketers and Sales Commission
Whenever an affiliate marketer plans to enter into this field, the following questions arise in his mind:
“Will I be able to earn commission by selling merchant's products? What will be my percentage? Will I be able to earn a good amount from selling the products or not?”
There are different types of affiliate programs. The first type is called “Pay per Sale”, the second is “Pay per Lead” and last is “Pay per Click”. There are some more types, but these three are the most popular among affiliate marketers.
In the pay per sale option, the merchant pays the affiliates on every sale. Usually the commission rate is anywhere between 10-50%. The products that are really hot in the market usually give less commission. In the pay per lead, the affiliate is paid for every person that is registered on the merchant website. Usually a visitor is offered to use a free product on a trial basis and their credit card information is stored. The visitor's credit card is not charged during the trial period. After the trial period has expired, if the visitor is interested, he will be charged. In the pay per click option, the affiliate is paid for every click that is made on his affiliate link. The affiliate is paid for every click, even if the visitors do not make any purchases. Obviously the commission on per click is much less as compared to other options.
In the beginning, only select the products that are hot and are really making sales, even if their sales commission is lower. Greater sales will compensate you. If you are choosing the product just on the basis of high profits and not on the basis of its demand, then you may suffer. Another good way is to choose the hot products with less profit and some new products with high profit. Then keep an eye on your sales. If the new products are giving you the sales then it is ok. Otherwise remove them and select some other new product with good sales commission.
If your website has really a good and constant flow of traffic, then pay per click is a very good option for you. Because you are paid for every click and you are not required to make any sales.
Merchants and Sales Commission
If you are a merchant, then always offer a commission that is both acceptable by your affiliates and you. If you offer a very low commission, then there are less chances of affiliate's interest in your products and this may reduce your sales. On the other hand, if you are offering a very high commission, it will attract the affiliates but in the long term you may suffer. So always try to offer a reasonable commission.
If you are a merchant and are going to introduce a new product to the market, then you can offer some really high commissions in the start. This may be like 50% of the sale. This will attract the affiliates and you will get a large number of affiliates in very little time. The affiliates will be highly motivated to make as many sales as they can so that they can earn high commissions. This will greatly increase your sales. Once your product has become popular and in demand, then you may reduce the sales commission gradually.
As a conclusion, setting a reasonable commission is an important factor for the merchants to do good business. Also the affiliate marketers should select the products that are giving them good profit and are easy to sell.