Affiliate Marketing Tips – What Kind of Commission to Look For
Have you ever taken a look at the Clickbank marketplace? There are more products there than you can shake a stick at. Some are pretty expensive and some are dirt cheap. But which one do you want to sell? Does it matter what the commission is for the product you want to promote? Well, that depends on how you go about promoting it. At the end of the day, if you end up spending more money on advertising than what you’re making in commissions, then it doesn’t pay to promote that product. Makes sense, right? But how do you figure all this out in the first place? Well, this article is going to show you how. So pay attention.
Let’s take a fictional example so you can see exactly how this works. Let’s say you decide that you want to promote a product that sells for $47 and pays a 50% commission. That means you’re going to make about $23.50 for each sale, less whatever the processing fees are, which will be about a buck. So that means you can’t spend more than $23.50 in promotion to sell that one product. If you do, you’re losing money. But how do we figure this out?
The problem with doing this is that we’re not privy to the conversion rate of this product. In other words, we don’t know how many clicks it takes to make one sale. We could write to the merchant and ask, but let’s face it, you probably won’t get an entirely truthful answer as most merchants want to paint their product in the best light. So let’s make an assumption that if it’s a top selling product at the marketplace that it converts at about 1%. That’s about the average conversion for a decently selling product.
Okay, so what does this mean? It means that it will take 100 clicks to make one sale of this product. So, all we have to do is figure out how much we’re spending on each click. If we’re using pay per click advertising, that’s easy. We simply take the cost per click (cpc) and multiply it by 100 to figure out how much we’re spending on every 100 clicks. Let’s say we’re spending 10 cents per click. In that case, 100 clicks will cost us $10. That will leave us with a profit of about $13.50. So this product would be a good one to promote at 10 cents per click.
The above is a simplified example. It can get a whole lot more complicated depending on what kind of advertising you use. In my signature you’ll find a resource that uses mostly free advertising so that just about any product can be sold at a profit regardless of the cost. Then you can move on to paid promotion once you’ve figured out the conversion rate through testing.
Choosing a product with the right commission is key to making a profit as an affiliate marketer.
To YOUR Success,