Affiliate Marketing Compensation
How You Get Paid by Affiliate Programs
During the massive surge in online commerce over the last ten years, a new business model has come very much to the fore. That model is affiliate marketing. The growth in just this one aspect of internet commerce has been simply astounding.
No less than $6 billion was earned by affiliates during the year of 2006, much of it by people who started out in a small way promoting simple products through networks from their home computers. Affiliate marketing has enjoyed this phenomenal growth due to the advantages it gives both the merchant and the promoter.
To the merchant, some of whom are among the biggest names in commerce, the affiliate marketing model allows them to sell their products without employing a sales team, or paying for advertising space. This makes it relatively risk free for them, as the affiliate commission, unlike advertising or wages, is only paid out of the price of sales. Make no sales and you pay no money. For the promoter, they have the option to promote an incredibly wide range of products and services, without the need to create a single product of their own.
With affiliate marketing, the promoter is paid a commission on every sale that they refer to the merchant’s website. These commissions vary enormously, with the commissions on digitally downloadable products being by far the greatest. Due to the fact that there is no cost involved in producing multiple copies of the product, vendors are prepared to offer as much as 75% commission to the referrer on purely digital products such as downloadable ebooks. Commissions on physical products must obviously be set that much lower, as there is a lot more expense involved in the production of the product.
These commissions that are paid to webmasters and promoters by affiliate networks can be paid in many different ways. PayPal, the online payment processor owned by online auction site eBay, is the most versatile form of payment, but some networks still insist on the old fashioned check.
This is especially annoying to affiliates from outside the USA, who often lose a sizeable portion of their money having to convert the currency. Some of the larger merchant networks will now pay directly into your bank account. One thing that always need to be borne in mind is that the affiliate network cannot pay the affiliate until any possible refund period has expired. This accounts for the sometimes long delay between the sale of the product, and the compensation of the promoter.
Some affiliate programs actually pay on two levels. This means that an affiliate who recruits another affiliate, gets paid a small commission on the sales of that second affiliate. These two-tier affiliate programs are designed to reward and encourage promoters who can bring other promoters into the organization, and as a result bring more sales to the business. These two-tier programs can be very rewarding, especially for someone who joins the system early.
Tags: affiliate programs, affiliate networks, affiliate marketing, making money with affiliate programs, make money online
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