It’s no secret that affiliate marketing success for both affiliates and advertisers hinges on choosing the right commission model, among other things. If you sell leads, you want to get the highest price for them; if you buy leads, you want to get the best price-quality ratio.
Likewise, you want to grow the number of leads you sell or scale up your lead acquisition game. Either way, choosing the right affiliate commission model – one that resonates with your marketing strengths – is a must to be cost-effective and competitive.
| “I always take a look and see what the competition looks like. For some of those areas, if you’re going to get into it, it can be quite competitive. There are a lot of big websites and a lot of lead gen things. But see what they’re doing and what you can do differently – what can you bring that somebody else isn’t doing right now, how you can approach a topic or a problem and bring in your expertise on it.” – Jeannine Crooks, Partner Acquisition & Development Manager of Awin |
Read on to learn everything you need to know about affiliate commissions.
For experienced affiliate marketers, you might want to take a product tour to see how Phonexa can grow your business.
Affiliate Marketing Basics: How To Generate Commissions Safely
In affiliate marketing, affiliates (also known as publishers) generate traffic or sales for companies selling products or services (also known as advertisers or merchants) in exchange for a commission on the sale or a flat commission per qualified lead.
The affiliate-advertiser partnership can be direct or involve an affiliate network that makes it simpler for both parties by handling tracking, reporting, and commission payouts. Likewise, bigger affiliate networks unite hundreds of advertisers and thousands of affiliates, so you can easily find a partner to sell or buy leads.
Source: Understanding Affiliate Marketing Ecosystem: What Is Affiliate Network?
Not all affiliate marketing campaigns are focused on sales, though. Brands also collaborate with affiliates and influencers to expand their reach and boost brand awareness. But, of course, generating leads and sales is still the number one goal of any affiliate marketing campaign.
One big advantage for affiliates is that they can advertise products or services without a big budget and sometimes even without a website. For example, if you have a large following on social media, you can drive leads from there. Likewise, you can synergize various marketing channels, like blogging and email marketing.
For advertisers, affiliate marketing allows paying for what they get without having to face unnecessary risks. Moreover, in pay-per-sale affiliate marketing, there’s no risk at all because you pay a commission on the sale that’s already made. But even with pay-per-lead, you only pay for qualified leads and can set any qualifying criteria, which means you know what you are paying for.
Long story short, affiliate marketing is a win-win. Businesses get customers, affiliates earn commissions, and customers connect to the product or service they’re searching for.
The only fly in the ointment is affiliate fraud, which can nullify your efforts and destroy your reputation. This is why having robust anti-fraud software is vital for everyone involved in affiliate marketing: affiliates, advertisers, and, even more so, affiliate networks that process thousands of transactions daily.
Take a quiz to know how well you are protected against affiliate fraud.
On a similar note, affiliate marketing compliance plays a crucial role. Adherence to regulations like GDPR, PCI DSS, CAN-SPAM Act, and CCPA, as well as intellectual property rights, helps establish trust and safeguards against legal issues.
Affiliate Commissions: What Are Affiliates Paid For?
First of all, it’s worth mentioning that it’s up to the advertisers to establish the monetization rules: they can choose to pay a commission on the sale, a flat commission per qualified lead, download, registration, or any other action. However, in the lion’s share of cases, affiliate commissions are paid either on the sale or per qualified lead.
Size-wise, affiliate commission rates vary from a few cents to a few thousand dollars, depending on the payment model, industry, and the customer’s purchase. Bigger commissions are typical for the pay-per-sale model, whereas a commission per lead almost never exceeds $200.
Here are the pros and cons of affiliate commission models for affiliates:
| Advantages | Disadvantages | |
| Pay Per Sale | High revenue | Reliance on the advertiser’s sales skills |
| Pay Per Lead | Getting paid for every qualified lead, regardless of whether the lead makes a purchase | Lower Revenue |
| Tiered Commission | More revenues and extra motivation to stay with the chosen affiliate program | Lower rewards at the beginning and for low-scale affiliates |
| Recurring Commission | Extra revenue | Reliance on recurring sales |
Here are the pros and cons of affiliate commission models for advertisers:
| Advantages | Disadvantages | |
| Pay Per Sale | No risk | Possibly lower cost-effectiveness |
| Pay Per Lead | Possibly higher cost-effectiveness | Paying even for the leads that don’t convert |
| Tiered Commission | Motivating affiliates to generate leads consistently | Paying higher commissions |
| Recurring Commission | Extra motivation for affiliates to generate high-intent leads | Paying higher commissions |
Ultimately, your choice should align with your marketing goals, the products or services you’re promoting, and your strategy for building a sustainable affiliate income stream.
Build your plan now, or book a demo to learn how to grow your affiliate marketing business with Phonexa.
Who Is a Super Affiliate?
A super affiliate is an affiliate marketer who can generate significant sales and referrals for the products or services they promote. Super affiliates often negotiate special commission rates or terms. Speaking of which, super affiliate commissions can be 10% to 20% higher than average, with the actual percentage being based on negotiations.
Here are a few points to consider regarding super affiliates:
- Super affiliates receive higher commission percentages, tiered commission structures, or exclusive bonuses.
- Super affiliates might need a specific performance threshold, for example, reaching a certain sales volume or number of referrals.
- Negotiating with advertisers involves showcasing your track record of success, marketing strategies, and the potential impact you can have on their sales and revenues.
- Some affiliate programs publicly acknowledge and celebrate their super affiliates, providing additional visibility and recognition for them.
That said, becoming a super affiliate requires unparalleled dedication, expertise, and effort. You should have deep insights into your target audience, employ advanced marketing strategies, and invest significant time and resources into your campaigns.
This bundle unlocks techniques to simplify onboarding processes. Refocus efforts and expand your customer base to acquire leads.
| “In the affiliate landscape analysis process, you’re also learning a lot about the product and sometimes educating yourself around something you don’t have expertise in. What I found is that so many affiliates and publishers have become expert learners. They can pick up something new and be able to extract that information, understand it, and be able to deliver content.” – Talar Malakian |
The Average Affiliate Commission Rates
| Commission Rate | Additional Information | |
| Physical Products | 5% – 20% | Higher rates for top-performing affiliates and high-margin products |
| Digital Products | 20% – 50% or more | Higher rates due to lower production and distribution costs |
| Subscription Services | 20% – 50% | Recurring commissions for SaaS products and memberships |
| Financial/Hosting Services | Flat fees or a combination | Varies from $50 to over $200 per referral or a portion of the initial purchase |
| Travel and Luxury | 2% – 10% | Common in the travel industry for hotel and flight bookings |
| Fashion and Beauty | 5% – 20% | Clothing, cosmetics, and skincare products |
| Health and Fitness | 5% – 30% | Supplements and fitness equipment |
| Insurance | Varies by category | Health (5% – 40%), life (20% – 100%), home ($30 – $150 per policy), auto ($25 – $200 per policy), travel (10% – 50%) |
How To Choose The Right Affiliate Program
| Aspect | Considerations |
| Product quality and fit | High-quality products with a good reputation that resonate with your audience are more likely to lead to sales |
| Commission rate | A higher commission rate can be more attractive, but take into account the overall value of the product or service you’re promoting |
| Recurring commissions | Consider programs that offer recurring commissions for subscription-based products or services |
| Average Order Value (AOV) | Bigger AOV also means a higher commission per sale, which is particularly important if you receive one-time affiliate commissions |
| Competition | Research affiliate competitors to identify whether you have a realistic chance to drive customers to the products and companies you promote |
| Promotional materials | Opt for affiliate programs that provide banners, lead generation forms, product information, and other templates you can use |
| Program reputation | Research the program’s reputation and history to make sure you’re partnering with a reliable advertiser or affiliate network |
| Payment | Check the available payment methods, payment thresholds, and payout schedule |
| Affiliate support | Look for affiliate programs that offer extensive affiliate support and can solve issues quickly via different communication channels |
Last but not least, it’s crucial to have the right link tracking and affiliate management software. While smaller affiliates may rely on the tools provided by the affiliate network or their advertiser, it’s still better to have full control over your lead generation campaigns.
Your Best Eight-in-One Affiliate Marketing Tech Stack
While choosing the right affiliate program and commission structure is important, it’s no less important to have full control over your affiliate campaigns. Whether you’re an advertiser, affiliate network, or affiliate, you can get full visibility into your campaigns with Phonexa’s eight-in-one performance & affiliate marketing tech stack.
The stack’s core solution is Lynx, an affiliate software solution designed specifically for click tracking and journey control. With Lynx, you know where your traffic is coming from, who the leads are, and how they move down the funnel.
Lynx has everything you need to keep track of your clicks and conversions:
- User-friendly dashboard that consolidates affiliate progress
- Performance tracking that enables real-time analysis of affiliate offers and traffic
- Precise targeting that gives you an idea of what demographics your advertisers want
Not only does Lynx unlock insights that remain obscured with any other software, but it effectively synergizes with Phonexa’s other solutions for affiliate and performance marketing, creating a full-cycle lead processing ecosystem.
And it’s quite simple to manage. All the data is pulled into a single dashboard, giving you an overarching view of your marketing campaigns and the ability to use insights across campaigns and traffic channels. With Phonexa, you’re always one step ahead of the competition.
Build your plan now, or book a demo to explore Phonexa’s full spectrum of affiliate marketing automation, call tracking, and lead management solutions.
LMS Sync and Call Logic To Track Your Web and Call Leads
Whether you’re selling or buying leads with Phonexa, you get exhaustive details about these leads: demographics, psychographics, firmographics, engagement & purchase history, and more. Then, knowing your leads to a granular level, you can improve on all fronts.
Here’s what LMS Sync enables for web lead campaigns:
- Lead tracking to reveal otherwise hidden customer insights
- Lead analytics to adjust targeting and the customer journey in real-time
- Lead distribution to connect the right leads to the right marketing & sales channels
- Automated reporting to know what’s going on across campaigns
For phone calls, there’s an analogous solution called Call Logic, which tracks, routes, and analyzes inbound calls on the fly and also, through a built-in IVR and conversational AI, interacts with callers to deliver the best possible experiences.
But, as you know, that’s not all. There are five more solutions in Phonexa’s suite on top of the already mentioned Lynx, LMS Sync, and Call Logic:
| LMS Sync | Lead tracking & distribution software |
| Call Logic | Call tracking & distribution software |
| E-Delivery | Email & SMS marketing software |
| Cloud PBX | Cloud phone system |
| Lynx | Click tracking software |
| Opt-Intel | Suppression list management software |
| HitMetrix | User behavior recording & analytics software |
| Books360 | Automated accounting software |
| “With all the tools we’ve got, there’s no excuse not to optimize every single cog in the affiliate journey. And if you didn’t get to where you wanted to, don’t give up because ultimately it’s possible to still get there – you just might need to tweak a few things along the way, so make sure that you’ve got the processes and the tools in place to know whether you should be doing that or not.” – David Pickard, CEO at Phonexa |
Build your plan now, or take a product tour to see how Phonexa’s products work in sync.
Frequently Asked Questions
How does commission work in affiliate marketing?
Affiliate commission is an affiliate’s compensation for advertising an advertiser’s product or service, either a flat fee per lead or a commission on the sales made to a referred customer. The right attribution is ensured by affiliate links.
What are the most profitable payment models for affiliates?
The most popular payment models are percentage-based commission on the sale, fixed commission per lead, tiered commission that changes depending on the affiliate’s performance, and recurring commission paid to the affiliate every time the referred customer makes a purchase.
What factors should affiliates consider when choosing their affiliate program?
When you look for an affiliate program, consider the commission rate, product quality, conversion rate, cookie duration, average order value, promotional materials, affiliate support, tracking and reporting, payment schedule, payment methods, program reputation, terms and policies, market demand, competitive landscape, and long-term viability.
Get in touch! We are available 24/7.
Download Publisher & Affiliate Reporting Templates
This bundle unlocks techniques to simplify onboarding processes. Refocus efforts and expand your customer base to acquire leads.
Download the free guide
