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How to chose your affiliate’s commission ?

February 11th, 2010 Posted in article, emarketing

I have worked for several years for VSO-Software, and also for some other software publishers before this one. Affiliation is a popular way to get efficient promotion and additionnal sales. A web site, a forum, a blog, a catalog is listing your products or services, and if a sale of your product is completed after a user clicked on the affiliate’s web site, they receive a commission on the sales completed.

What are the big question to consider if you are interested in this model ? First of all, you need to use a paiment service or a affiliate’s network compatible with your own paiment provider. The 2 most popular service for software publishers ( One of the most active and profitable affiliate market ) are RegNow from Digital River, and Avangate. If you are not selling a software, please contact me, I could give you some other network fitting your activity.

“software market provides commission from 30% to 85%”

What is the most popular commission applied ? Even if recommand to look first at your competitors, it’s pretty safe to say the most popular and default commission is 50%, at least with this one, you don’t have to think if the 50% is what you get or the affiliate, you will have the same. It gives also the feeling to the affiliate you open a balanced deal, a win-win relationship as you split the profit. Any publisher providing a commission of less than 30% will sound greedy and they will need to justify it ( because they have a very popular product, special expenses due to patents to pay, retail distribution channel, etc… ). At the opposite, a publisher provider a commission of 85% ( yes, it happens ! ) will also have to justify how they could do that. As an affiliate, you will look at this carefully, or worst, it could influence their final decision without they know why.

Why you should start with a higher commission than you would like ? Of course, starting affiliation with 50% could sound you risky. As if you split a part of your own body, or revenue. Actually, you need to consider the competition and the time required for an affiliate to list you. People are lazy, and affiliates are persons like other. If competitors or other products offer a better commission, why they will waste their time ? also.. and that’s the key point, imagine you define a commission of 50% or more, and you don’t have any affiliate registering and promoting the product, what you could conclude ? If you set your commission reward too low, you will just miss the opportunities to acquire new affiliate, and even changing the commission, it will be more difficult to convince again. At the opposite, if you have too many affiliate with a high commission ( 70% etc ) , it will be easier to reduce it, especially if you have mentionned the attractive affiliate rate was for a limited time. You have to start somewhere, so save your time, and be dynamic by offering an attractive commission at the beginning or opt to be  assisted by a professionnal affiliation account manage like me ;-)

Few Tips and suggestions ( to be completed by direct discussion with me and your specific case ) :

Reward the early-adopters affiliates. Some people will contact you to discuss affiliation while you don’t have one, that’s for sure people motivated to promote your products, so don’t hesitate to give them an extra bonus to their commission ( 55% instead of 50 ), they are the one you don’t want to dissappoint, they will help you to build a better affiliation program, testing it, providing feedback, so they need a special attention.

Auto-Approval for all,  most system let you the possibility to accept automatically the new affiliates or to review them. Make it simple and auto-approve them, there is nothing worst than killing the move of the affiliate, if he just applied to promote your product, don’t let them give up or forget, he was taking care of your products, let him the possibility to promote them right away and without any delay.

– Explain the tracking method, don’t hesitate to provide a XXX link sample : Just to make the things clear between the affiliate and you, and repeat in a page or after contact page the link you would like to see them uses. Even if you relay on the RegNow or Avangate build links, you won’t lost anything to repeat the way you expect the links to be set.

– No Direct Buy links with affiliate. Wake up, nobody buy directly anymore, you can smartly place some buy links in addition of the

– Set your Rules, be “generous” doesn’t mean you are stupid, you have to define some rules about how the affiliate can market your product, especially about CPC Google campaigns, you can forbid the use of some keyword if you are doing your own campaigns. You can also opt to limit the discount the affiliate could offer from his own margin.

This is only a few points to consider, each software publisher can adjust his affiliation partnership depending on the popularity of the software, speciality, price, margin. Ask your questions in comments, and I will use them for a future article.

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20 Responses to “How to chose your affiliate’s commission ?”

  1. bb Says:

    Thank you for this article!

    Staring with a higher commission rate is a good idea. However, I think that the ‘high commission rate’ will depend on the product : for instance when 50% can be a high rate for a product, it can be too low for another to attract the affiliates. It may take time to find out the appropriate commission rate for a specific product.

    A question :

    We advertise our product in some popular sites. Therefore the software shows up as ‘sponsored’ or ‘featured’ on those sites. Do you think that it is a good idea to accept those sites’ affiliate requests? Especially if they won’t do any extra advertising other than the one we paid for.

  2. admin Says:

    that’s absolutly true, the default commission will depend on a lot of things, your kind of product and the competition in the existing affiliate network.
    I think it is always good to make some advertisment compaign, and I see your issue with the popular sites. You need to check they don’t have the double commission, the one from the campaign you paid and the other one from the affiliate network, if you pay to be placed, for sure, it is not to give them again another commission.
    Do you have a way to track the sales produced by web site you pay to be listed ?

  3. Patrick Says:

    Great post. Clear, smart. Thanks.


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