Is the commission rate really that important
By Bruno Delepierre - http://www.4allsites.com
A lot of affiliates think the commission rate is the most important thing when choosing a merchant program…In my opinion the commission rate is a wrong aspect to choose a merchant for. Although a high commission rate is important you shouldn’t automatically reject the merchant if they do pay you a low commission rate. If you have to choose between a couple of merchants it’s sometimes even better to use the merchant with the lowest commission rate. This may sound a bit weird but let me explain trough an example and you will immediately understand what I want to say :
Let’s say you have merchant X that pays you 15 % per sale and you have merchant Y that pays you a wonderful 25 % per sale. Both merchants sell similar products so almost every affiliate would use merchant Y right ? Wrong, sometimes merchant X will be the better choice. Don’t let merchants overwhelm you with simple numbers ! I’ll give you a couple of possibilities where you will see that merchant X will be the best choice although the merchant offers a smaller commission rate.
Suppose you send both merchants 10 sales. You’d think merchant Y would be the best performing merchant but what about this : you earn 15 % on 10 sales of each 30 $ . That will make you 45 $ . With merchant Y you get 25 % on 10 sales of each 15 $ . Merchant Y will make you 37.5 $. It’s clear that merchant X is better performing even with a smaller commission. If you would have been able to send the ten sales from merchant Y to merchant X you would have made 90 $. If you’d send the 10 sales from merchant X to Y you would have made 75 $.
My point here is that you have to look further than the numbers as they can very often mislead you. A remark however : If both merchants sell similar services at a different price ( eg. webhosting ) it can be interesting to use both merchants : Try to convince people to use merchant X but also add that there is also merchant Y that isn’t as good as merchant X but still is more than ok for people with a smaller budget.
A second example now : Again assume that you have two merchants A and B . Merchant A pays you 20 % per sale and merchant B only 10 % . Once again they offer the same thing at the same price and you send them the same amount of visitors .You would presume that merchant A is the logical choice.
Now your site sends 20 sales for a 100 dollar product. This means you’ll get 400 $ by using this merchant. Merchant B however receives 50 sales on the 100 dollar product. This will make you 500 $. Merchant B pays you more so you should use merchant B instead of merchant A !
What I’m trying to say is that a commission rate doesn’t say a thing. In the end it’s the actual commission you see on your check which is the most important element. Don’t rely on the commission rate but on the commission itself. A good commission rate is very appreciated but if you cannot send any sales or leads to that particular site you will earn nothing at all… Check out the merchant and see if people are convinced to buy something, see if the merchant site is easy to use. Also compare prices of equal products and see which is the best paying one.
A final remark however : Also keep other aspects in mind before you pick a merchant. It’s possible that you know your visitors to learn which budget they have and how much they want to spend. Things like the reliability of your merchant,user-friendlyness and uniqueness are all aspects that you should keep in mind when choosing an affiliate program.
Written by Bruno Delepierre - Discover more information,tips and resources on affiliate marketing,webdesign and webpromotion on http://www.4allsites.com. You can also subscribe to our newsletter on http://www.4allsites.com/ourezine.html for regular inside information and webmaster resources.
| DISCLAIMER: The content provided in this article is not warranted or guaranteed by Developer Shed, Inc. The content provided is intended for entertainment and/or educational purposes in order to introduce to the reader key ideas, concepts, and/or product reviews. As such it is incumbent upon the reader to employ real-world tactics for security and implementation of best practices. We are not liable for any negative consequences that may result from implementing any information covered in our articles or tutorials. If this is a hardware review, it is not recommended to open and/or modify your hardware. |
More Affiliate Promotion Articles
More By Developer Shed
 developerWorks - FREE Tools!
|
Hear how IBM Rational Project and Portfolio Management integrated solutions help teams put the right tools and processes in place to maximize the effectiveness and efficiency of project teams and ensure that the business vision is being executed correctly. Learn how to automate and integrate requirements prioritization, top-down project planning, communications and controls, and methodology deployment to keep your scope, costs, and schedules under control. Tackle with an end-to-end approach the management of scope and scope changes, usage of methodology to control and empower project teams, and optimization of resources to align activity costs with the overall project plan.
FREE! Go There Now!
|
|
|
|
David Barnes, Lead Evangelist for IBM Emerging Internet Technologies will discuss aspects of Web 2.0 that bring value to corporations, academia, and government. He'll also discuss IBM's vision around Web 2.0, including the importance of remixability and consumability. The discussion will culminate with examples of various IBM Software Group solutions you can use to get ahead of the Web 2.0 adoption curve.
FREE! Go There Now!
|
|
|
|
Visit IBM developerWorks to download a free trial version of Lotus Quickr 8.0, which enables collaboration by transforming the way everyday business content such as documents, rich media, photos, and video can be shared. Lotus Quickr makes it faster and easier to share content of all types (not just documents) within virtual teams. It is designed to make it easier to collaborate across organizational boundaries, while continuing to work within the context of familiar desktop applications.
FREE! Go There Now!
|
|
|
|
Visit IBM developerWorks to download IBM DB2 Express-C 9.5, a no-charge version of DB2 Express 9 database server. DB2 Express-C offers the same core data server base features as other DB2 Express editions and provides a solid base to build and deploy applications developed using C/C++, Java, .NET, PHP, and other programming languages.
FREE! Go There Now!
|
|
|
|
Join this webcast to see how IBM Data Studio Developer and pureQuery can take the pain out of Java data access. uApplications developed using both Java and SQL have become a common requirement. Database connectivity using Java Database Connectivity (JDBC) to create an application is a multi-step tedious process, and tooling that covers both SQL and Java has been unavailable, until now. IBM Data Studio introduces the pureQuery platform: a high-performance, Java data access platform focused on simplifying the tasks of developing, managing, and optimizing database applications and services.
FREE! Go There Now!
|
|
|
|
Secure your Web applications with IBM Rational AppScan Standard Edition V7.7, previously known as Watchfire AppScan. This Web application security testing tool automates vulnerability assessments and scans and tests for common Web application vulnerabilities. Visit IBM developerWorks to download a free trial of IBM Rational AppScan Standard Edition V7.7.
FREE! Go There Now!
|
|
|
|
Discover how Rational tools and best practices for testing can make your job easier. The new Rational Testing eKits provide you with valuable resources – including demos, webcasts, tutorials, and articles – that help you address your specific testing needs across the software lifecycle. Five new eKits are available covering the topics of Requirements and Test Management, Functional Testing, Performance Testing, Code Quality and Embedded Systems, and SOA and Web Services Testing.
FREE! Go There Now!
|
|
|
|
Learn the basics of the IBM Customer Information Control System (CICS). With a hands-on exercise, learn how to get your first CICS application up and running on your desktop using TXSeries V6.1 for Windows. The tutorial shows you how to download and install a free trial version of TXSeries V6.1.
FREE! Go There Now!
|
|
|
|
Regression testing -- in which code is thoroughly tested to ensure that changes have not produced unexpected results -- is an important part of any development process. But many testing environments neglect the terminal-based applications that still form the backbone of many industries. In this tutorial, you'll learn how the Rational Functional Tester Extension for Terminal-Based Applications works with other Rational Functional Tester to help test terminal-based applications quickly and easily.
FREE! Go There Now!
|
|
|
|
Attend this launch webcast with Scott Hebner, Vice President of IBM Rational Marketing and Strategy, where he will overview Rational’s new offerings and programs to help customers accelerate software innovation on System z. He will discuss how these solutions help organizations extend their core business processes toward modern architectures such as SOA and web technologies to deliver business improvements that stand the test of time.
FREE! Go There Now!
|
|
|
|
All FREE IBM® developerWorks Tools!
|
