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Models for Paying Affiliates

May 22, 2009 by Shawn Collins

Q: I run an affiliate marketing company and I am looking to hire affiliate marketers to work for me. I was wondering if you could suggest some remuneration models and incentives?

Shawn CollinsA: An affiliate marketing company? I am not sure if this is a network or merchant? I am not entirely clear on the question, but I’ll answer it assuming you are interested in launching an affiliate program for your company.

As far as the various payment models to affiliates, typically you would pay a percentage of a referred sale to affiliates, a flat fee for a lead, or per click.

Also, you could pull together a hybrid of any of these commission structures.

Incentives to affiliates usually work out in one of two ways: a graduating increase in commission rate based on the volume of leads or sales referred, or else cash prizes for affiliates that reach specified goals.

One thing to bear in mind is that you should budget for a “super affiliate” commission rate. If an affiliate has a reputation for being a top performer, they’re likely not going to work hard to promote your product or service if you’re only offering them the same rate as anybody that drives one sale or lead per month.

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