Affiliate Program Guide
Starting and Managing
an Affiliate Program
Affiliate Program Directory
SUMMARY: Flat-fee affiliate programs reward affiliates for generating an action (lead or sale), and pay the same amount regardless of the ultimate value of any one transaction. As such, they offer some advantages over commission-based affiliate programs. At the same time, the best affiliates will almost certainly do better with commission-based programs.
Advantages of Flat-fee Affiliate Programs
- You know exactly how much you will receive for a given action (purchase, newsletter signup, etc.) so it's easy to calculate your expected return very accurately, based on the clickthrough rate you're getting on the advertising material you're displaying, and the conversion rate (the number of visitors who go on to become leads.)
- You may well make more per new customer than you would under a % commission program, especially if your site's visitors do not seem to be predisposed to large initial purchases, or if the merchant is essentially rewarding affiliates for anticipated future sales.
- You can earn commissions for actions other than a purchase, such as generating a newsletter lead, free catalog mail-out, or other lead. Such leads are typically easier to generate than purchases (though the reward per lead is also going to be lower) so pay per lead programs are good for lower-traffic sites.
Disadvantages of Flat-fee Affiliate Programs
- You have to keep finding NEW customers
The key to these types of program is that they almost always pay a bounty for new customers only. If you send over somebody who has already purchased via the site or previously signed up for a lead, you won't see a dime for your efforts. And remember, we're not just talking about people who bought after coming from your site: if the person has been a customer any time in the past, having arrived at the site by whatever means, you will not get paid - yet the merchant in question will be delighted to sell to them again.
Advice: Try to determine approximately what percentage of the traffic to your site is new visitors. If you have the same 5,000 visitors coming back to your site every day, your overall traffic numbers will look healthy, but you're not likely to make much money under a flat-fee program since your potential "pool" of new customers is drying up day by day!
Choose programs that have not yet become over-exposed. If every site you visit is advertising the same deal, it's logical to expect that you won't have much success introducing new customers to that merchant.
- An attention-grabbing amount can actually represent a very small % commission
Imagine a flat-fee program that pays $50 per new customer - sounds pretty exciting, until you realise the product it is selling is automobiles. When you do the math on the price of an average new car, you'll quickly realize that even a program that paid you 0.5% commission on the sales price would bring you a lot more revenue!
Advice: Do the math! For instance, if a flat-fee program offers $10 per new customer and your choice is between that or a commission-based program offering 5% of sales, you can see that an average customer would need to buy $200 worth of merchandise for you to receive the same payment as you would under the flat-fee system. In this example, if the products being sold are books or videos (or anything with a low per-unit cost) you might be better to take your $10 per new visitor, and accept the fact that your earnings will go up less frequently, but in bigger steps. If the product in question was a high-ticket item, you'd be better off looking for a % program.
BACK: Go back to the guide to different types of affiliate program