Types of Affiliate Programs

Types of Affiliate Programs

1. PAY PER SALE (commission based) also known as Revenue Share

You get paid a commission for each sale you generate. If you refer a visitor to the merchant's site and the visitor makes a purchase, you get a percentage of the sale as a commission. Some programs offer a sliding scales for the amount of commission to reward affiliate sites with high traffic, while other programs stick to a flat commission rate for any level of sales. Depending on the merchant, the commission may be for that purchase only, for all purchases that customer makes within a fixed period of time (usually six months to one year), or for all the purchases that customer makes for life.

Advantages to you

You get paid for every sale that is generated through a referrer from your web site. If the affiliate program matches the content of your site, you are likely to get good results from a commission based pay-per-sale system.

Disadvantages to you

This kind of program usually has a low click-thru to conversion rate. This means most likely only a small percentage of your visitors will click on the banner or link advising them to buy. Of that percentage, an even smaller percentage will actually buy something. You may find that there have been thousands of visits to your site and yet no sales. The more you can focus your affiliate program and integrate it into your site, the better your chances for making real money will be.

2. CPA - Cost Per Acquisition (flat fee referral) also known as a Bounty

You get a one-time bounty payment for the customer you referred. You will not get commission on any future purchases that customer makes. Usually, companies pay a bounty of $10-$20 per customer.

Advantages to you

You get paid for every visitor you send to the target site that buys something.

Disadvantages to you

Your web site needs to have new visitors all the time. You only get paid for the referral once, even if the referred client keeps ordering from the merchant or purchases a service yearly.

3. PAY PER CLICK

You get paid for every visitor you send to the online merchant through a banner or text link, regardless of whether or not a sale is made. Usually, companies pay $0.05 - $0.10 per click per visitor.

Advantages to you

You get paid for every visitor you send to the target site, not only for the smaller number of visitors who actually buy something there.

Disadvantages to you

In most cases you will end up making little money (site with average page views will display f.e. 5000 banner impressions, of which 20 visitors click thru, resulting in a whole $2 income. Wow!

4. TWO-TIER PROGRAMS

You get commission on direct sales that you generate, plus you get commission on sales generated by affiliates that you recruit. Companies typically pay 15% commission for direct sales and 5% for sales generated by the affiliates you recruit. Same (dis)advantages apply as for the pay-per-sale programs.

5. PAY PER LEAD

You get paid a one-time fee for generating a lead for the merchant. Similar to a bounty program, you usually earn $2-$5 if the visitor you referred fills out a questionnaire or an application. Same (dis)advantages apply as for the Bounty programs.