Tips on Determining Affiliate Commissions
By Matt Bacak
Creating a digital product that is easily down-loadable is an excellent concept because it usually involves less overhead and less of your time and can be delivered through an automated process. With this type of product it is not uncommon for affiliate managers to offer up to 60% commission and sometimes more! Now this is fantastic if you are an affiliate because it obviously means more money in your pocket if you decide to market their product. However, the question remains, how can they afford to do this?
Just imagine if you were the one producing that product. How would you feel about giving away half of everything you sold to somebody else that had no input into its creation? 50% commissions are usually the standard and if you offer anything less, you are not going to be very successful trying to convince JV’s and affiliates to market your product, no matter how good it is.
What about hard tangible products? If you get into producing a hard product, there are some real costs involved in doing this. And you may wonder, do I still need to give up half of every sale to each of my partners? The answer is yes. You are going to have to eat all the costs of production.
Even in my case, a lot of people buy my programs at speaking engagements or via teleseminars. But if they were hosted by somebody else other than myself, there is still a 50/50 split. I eat all the costs involved, including travel. What about shipping and handling? A lot of times I personally handle that myself and I eat that as well. But this cost is optional and a lot of people don’t include it. I believe they should but that’s just my perspective.
So, the real question is why do we have to give up so much and cover so many costs? Well, what it all comes down to is, you’re eating the cost but you’re gaining the customer.
The value is in the customer, not in the initial sale. The benefit is now you have somebody that you’re able to work with and sell more to in the future. You could call it the cost of advertising or the cost of doing business. It is no different then what most corporate giants do. They spend a lot of money just to get a few new customers through the door, because they know that once they’ve got you, there is a good chance you will stay with them if they continue to service your needs. Investing in loyalty is always worth the cost.
There are many strategies to making money on the internet, but nothing makes sense unless you have a big list. Email Marketing is the most profitable way to make money on the internet. When you build a list of hot and hungry prospects you control your future. Discover how to use the internet and turn your computer into a cash gushing machine. Sign-up right now for Matt Bacak’s FREE online newsletter to find out how to do exactly that – Go here: http://www.promotingtips.com