Affiliate Programme(2)

Affiliate Commission Types
There are basically three main types of affiliate commission – Pay Per Sale, Pay Per Lead/ Action and finally, Pay Per Click.

(1) Pay Per Sale
This is the most common form of affiliate payment. You will only pay your affiliates commission when they manage to make a sale for you. Affiliate commissions range from 5% to 75% per sale, depending on the product/ services that you are selling. For electronic products or EBooks, it is common to see merchants offering commissions of 50% to 75% of the sale due to the low cost.

(2) Pay Per Lead/ Action
You only pay your affiliates when they referred a lead (visitor) to your site and carry out an action (e.g. filling up an online form). As such, you will need to define specifically what qualifies as a lead and the specific action that the person has taken such that commissions will only be paid out after the completion of this action. This type of affiliate commission is very common and popular for insurance or property agencies where they pay affiliate marketers for every quality lead (where usually the visitor gives much of their personal particulars and contact numbers).

(3) Pay Per Click
This is the least common form of affiliate payment where you pay your affiliates for every click that visitors click on your advertisement. The payment is typically very low – usually between $0.01 to $0.30 per click.

How To Choose An Affiliate Program
There are two ways of creating an affiliate program. Each has its own benefits and limitations. You have to evaluate your own business to decide which one suits your business model. In general, if you are just starting out, it is best to start with the second type – the affiliate networks (agents).

(1) In-House Affiliate Program

Unlike affiliate networks, creating an in-house affiliate program will offer you the full affiliate management control as you are the one to set your own rules. In addition, you can control and decide on a flexible affiliate commission/ payout structure where you can offer 2 or even 3 tiers of affiliate commissions, which is attractive to marketers. You can also create any custom affiliate reports to suit any type of your business evaluation.

The limitation to any in-house affiliate program is that you have to manage the affiliate payouts by yourself. In addition, if you are just starting out and not established in the market yet, getting marketers to know your product is a problem. In addition, marketers may not trust you for fear of non-payment of their commission.


(2) Affiliate Networks (3rd Party)

The benefit of affiliate networks is thus the existing pool of affiliates ready to market your product. Affiliate marketers do not have to worry about non-payment of commission since these networks manages and pay the affiliates on behalf of the merchants. Although you are not able to create custom affiliate reports, you are still able to create consolidated sales and commission reporting from the various networks at affiliate network level. A list of popular affiliate networks are:

o http://www.clickbank.com
o http://www.paydotcom.com
o http://www.cj.com
o http://www.amazon.com
o http://www.linkshare.com
o http://www.performics.com