Forum Moderators: skibum
As an affiliate that has had some success (top 200 affiliate for Amazon, top 10/20 for a number of smaller e-commerce companies and several hundred thousand unique visitors per month), we can't invest in building the business on commission that averages less than 5% (part of the reason the average is low is the travel and computer category with high dollar volume and low commissions). Right now, all the commissions go into marketing, and handling the cash-flow problem of getting paid several months late. No person associated with the business gets a salary.
I'd appreciate any advice that successful affiliates can give. Right now, I think we just have to wean ourselves of affiliate revenue and go direct either by:
- hiring salespeople and going direct to merchants as a marketing partner (deal with the marketing department rather than affiliate manager).
- selling product directly; and/or
- using drop shipping.
Any suggestions or advice?
I personally know of mnay affiliates who are earning well over 5 figures per month. Most all of them spend time finding out which programs actually make good $$, then they invest some time by building multiple sites for specific products.
If you have a general interest site and fit in affiliate programs around the site, then the commissions tend to be on the low side. If you build sites around specific products, then your sales ratio tends to be much higher as does your commission.
The most difficult part of the whole process is to find out what is selling and making the successful affiliates a nice monthly sum. Study the new sites going into yahoo's business/economy shopping and services section as this will tell you what is being sold by affiliates.
All of your suggetions at the bottom of your post are good ones, now it's just a matter of finding the right products to promote :).
It's just that I have to believe that the easiest way for us to increase our profitability would be to move from a "small commission" to a "fair commission". I know that it is old news to cry about how unfair the affiliate programs are, but consider this February Press Release from the CEO of Coldwater Creek,
"The Internet now represents one-third of our total company sales, with much of the growth in new customers coming directly from these affiliates," she explained. "The real beauty of this program is that it costs us nothing to establish these links, and we only pay a small commission after the customer makes a purchase on our Web site at www.coldwatercreek.com "
And to their credit, their commission rates are above average for the apparel industry.
Does anybody out there have some hard facts on what % of sales, different industries spend on marketing?
[edited by: NFFC at 4:17 pm (utc) on June 28, 2002]
