Paying Affiliates - How to Decide on Affiliate Commissions

By Angela Wills

Paying your affiliates their commission is certainly an important part of setting up your affiliate program. Now there are no hard and fast rules for an appropriate commission to pay your affiliates but there are a number of things to take into consideration:

Your costs: How much will it cost you to produce your product. Of course this will depend greatly on whether or not your product is a physical or a digital (information) product. Information products are great to sell because beyond the initial setup costs, the expenses to produce them are completely free!

Your industry: For example, if you are in the internet marketing industry then you will have to work hard to get some of the heavy hitter affiliates because they have so many options to choose from. If you are in an industry such as quilting or something that doesn't have many competing affiliate programs you may be able to offer a lower commission and still have affiliates willing to promote it.

How to Pay: Working on the internet, many affiliates will prefer to be paid by paypal rather than check. If you are going to be paying by check you'll want to make sure you do offer a paypal option for those who don't want checks.

Here is an example of some typical commission rates for different types of affiliate programs. These are just examples and you need to work your own numbers to decide on your own rate:

Information Products: Typically info products owners offer their affiliates a 50% commission. Of course this can vary and it's not uncommon to see commissions of 30-50%.

Physical Products: A common rate for physical products is anywhere from 4-30%. Again, you need to consider your expenses.

Event: Some people offer commissions on an event such as a seminar or conference and this can really vary depending on the conference cost and also the expenses incurred by the organizer.

Service: It is not all that common to see an affiliate program for a service, but I've set my own program at 10% commission and have seen this in others too.

Pay Per Lead: Often, people will host a pay per lead program where you get paid anytime someone fills out their name and email to get a free report. This is typically anywhere from $0.25 - $1.00 per lead.

Don't get stuck on deciding on a commission, make an informed decision and then go with it. If you are completely unsure then start with one on the lower side and then work your way up as you are more comfortable if you need to.

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