Since the launch of our new affiliate program last Sunday, we’ve already received great questions from you—the most important of all, what is an affiliate program and how do they work?Let’s break it down.
What it is: The Real Estate Agent Analogy
The best analogy for affiliate programs is that a real estate agent offline = an affiliate online.
In online marketing, affiliates have personalized affiliate links which can be used as text links, button- or banner- ads, Facebook comments, tweets, etc. Affiliates get a percentage of the sales made from clicks through that link, just like a real estate agent gets her commission after the completion of a sale.
So if you’re a Blogger Babes affiliate and someone clicks through to our eGuides from your referral, you’ll be making bank.
Why do we do this?
Affiliate Commission = Monetary Reward System for Referrals
How it Works: Commission
Affiliate programs give you, the affiliate, a personalized link or code that earns you some commission when it’s used as a referral.
Most affiliate programs have links that only last for certain periods of time. Amazon puts 24-hour browser cookies tagging the affiliate (they call them “Amazon Associates“)–Amazon can afford to give such a small time because it has its own traffic source and doesn’t depend solely on affiliates/associates to make sales. Other “not-so-kind” affiliate programs limit 30, 60, or 90-day cookies.
But some programs are cooler than that… I was an affiliate of a monthly subscription program once and was paid for 6 years, month after month, until that one subscriber finally stopped using their service. These are “lifetime” commissions which obviously last much, much longer than hour-length cookies.
Can you guess what Blogger Babes leans toward? 😉 (More on our details next post!)
Competitive Commission Percentages Online
Online, competitive commission prices tend to work like this:
- Referrers receive at least 50% for Inforproducts (i.e., ebooks, ecourses, or audio and video recordings) first-tier and 5% second-tier,
- 15-20% for services on the first contract,
- 30-40% on products (i.e., clothes, household products, etc).
Infoproducts are all made and uploaded to your shopping cart, so they can be sold easily. Giving a competitive 50% lifetime commission is customary and has been for the last twelve years I’ve been online.
Services (like our coaching and consultation) take a lot of time, effort, and scheduling, and they’re not indispensable or commodities, so 10-15% is common. Being highly competitive, however, the best commissions are 20% of the first contract.
Products like those sold on Amazon and clothing estores have limited profit margins, so they can give anything from 0.4-4% to remain competitive. But! If you work directly with the designers’ estore and cut out the middle man to receive delivery straight from the warehouse, you can profit big with things like Zindigo, who offers a whopping 40% commission!
There are even apps now that tags clothes and products. The first, highly-popular one is COSIGN, which pays up to 35% for sales on clothing, household products, and much more. You can check out our step-by-step tutorial for signing up here.
Phew! That was a quite a mouthful, and I’m nowhere near finished yet. Stay tuned for more in-depth information on affiliate systems–these are some opportunities you do not want to miss.
Next time Now Live: browser-based cookies vs email tracking, one- and two-tier systems, and where Blogger Babes falls with it all. Until then, ask any questions you have for us below!