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Sharing revenue

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  • Sharing revenue

    If I had a product to sell online and wanted to run an affiliate program to market it, how much should I share revenue with my affiliates? I see on Clickbanks they offer 50% or even 75% commissions to their affiliates. Are those reasonable offers?

  • #2
    The Affiliate commission you should offer depends on the profit margin you have on the products you sell. You should make sure that you are earning a good amount of money even after giving commission to affiliates so that the affiliate commission offered does not affect your turnover and you can run your business easily


    • #3
      I agree with Catherine. May be you can start off with a smaller commission percentage and later as your business grows you can offer a higher percentage. Besides this, selecting a profitable market is very important when it comes to affiliates. You will want to make sure that the people in the market are willing to spend money on your product.

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      • #4
        GWilson, what type of product/services you're dealing with? Is that recurring revenue business model or One-Time sale?


        • #5
          Well, I have yet to create the product, but I would be of the one-time sale type. I am thinking of selling digital products like ebooks or software, so that I don't need to deal with shipping and handling.


          • #6
            @GWilson : As it's one-time sale you should keep 50% profit margin, offer 10% to your affiliates and keep the remaining to fund your business.


            • #7
              It would be a good option to keep a scheme or say a kind of pattern to offer commission to affiliates.

              As Harry mentioned, you can start by offering 10% commission to affiliates who refer 1 customer and then offer 12% or 15% commission to affiliates who refer 5 or more than 5 customers.

              I am well aware of the fact that this will reduce your profit margin, however, this will increase your turnover which is certainly helpful


              • #8
                Normally people are offering 30 to 40% commission for the product you're dealing with, I think to compete the market effectively you should at least offer 20 to 30% commission per sale. If your product is unique you can reduce the commission structure substantially.