Is Residual Affiliate Program Right for You?
Got a website and looking for ways to generate some revenue or additional income? Or thinking for ways on how to earn income online? Affiliate Marketing may be a viable option. Affiliate Marketing provides you with a tried true way to generate additional income and not having to worry about what product or service to sell. What you need is a website with sufficient content that are related to the products/services of the online company whose affiliate program you are planning to promote. With the right strategy and the right program, you can start earning some extra money to either supplement your revenue or have a profitable online business.
Affiliate Marketing is a way of promoting online business through affiliate programs and advertising that pay the affiliate (or publisher) a type of commission based on the amount of business their website brings the merchant company. In affiliate marketing, an affiliate agrees to direct some traffic to a merchant’s website. In most cases, if the visitor traffic converts, i.e. purchases the merchants product or service, the affiliate receives a compensation from the merchant either as a percentage sales commission for the sales generated or a fixed fee predetermined upon the application of the affiliate on the merchant’s affiliate program.
Many major websites today, such as Amazon.com owe a good part of their success to affiliate marketing. The straightforward relationship, ease of set-up and benefits brought upon by affiliate marketing to merchants and affiliates alike has made this concept a very popular Internet marketing practice for many businesses. Affiliate marketing is now a standard part of online retailers’ Internet marketing strategy. Affiliate programs pay-outs and how affiliates can make money varies widely. Merchants can offer affiliates or members pay-outs via large one-time commissions, lifetime commissions, click through incomes and a lot of other benefits. It is fair to say that not all affiliate programs are created equal. The point for entry into affiliate marketing is easy, however, success is not immediate and is not guaranteed. A combination of right strategy and right program is key to be a successful affiliate. So how does a potential affiliate select which program is best for them?
The most common affiliate program used by retailers are ones that offer one-time commission for every sale or lead brought by the affiliate to the merchant’s website. Commissions for this kind of affiliate program are usually large, ranging from 15% to a high of about 60%. Other affiliate programs would pay you a fixed fee for every click through or traffic you send to the merchant’s site. Programs like this often pay a smaller fee for every click through, usually no more than fifty cents. A key advantage of this type of affiliate program is that the visitor won’t have to purchase anything in order for the affiliate to get compensated.
A sometimes overlooked type of affiliate program because of the small pay-out often associated with it is the residual income affiliate program. The commission for this program often comes only in the range of 10% to 20% sales commission. This low upfront commission is often a key reason for potential affiliates skip these programs and opt for the high paying one-time commission program. A question that may come up is that is it wise to skip residual affiliate programs?
The quick answer to the above question is NO. Affiliates are making a big mistake by simply ignoring programs that offer too low of a commission such as the residual affiliate programs. Although residual affiliate programs offer low up-front commissions, they offer a very important advantage for affiliates and it comes from residual income. Merchants offering residual affiliate programs will generally pay you regular and ongoing commissions for a single affiliate initiated online sale. Residual income or commission keeps coming as long as the visitor you referred to the merchant remains a client of the merchant.
To see the true value of the residual affiliate program, let’s consider the following example below:
You are reviewing the affiliate programs being offered by two competing web hosting firms. The first company will give you a one-time commission of for every visitor that you direct to their site and becomes a client. The second company only pays for every visitor that you direct to their site and becomes a client. Apple to apple comparison, it is obvious that the first company provides the better option.
However, there is probably a good reason why company 2 is offering such a low commission. Looking deeper into the program, the .00 is actually a monthly commission that you will receive for as long as the visitor you directed to the merchant and became a client. Doing the simple math, if the visitor remains a client for at least one year you would have earned .00 more than the one-time commission the first company is offering.
The bottom line, residual affiliate programs can significantly provide an affiliate more profit in the long run. There are still other factors that an affiliate must also consider when choosing the affiliate program that is right for them, this include that a residual program may not provide the longevity needed to become truly worthwhile for the affiliate, i.e. clients don’t stay long enough with the merchant or the merchant decides not to honor the affiliate agreement. However, one thing is clear ignoring residual affiliate programs by default is a big mistake.