Typical Commission paid to affiliates

[dvduval]

I'm curious to know what the typical commission that is paid to affiliates. I'm trying to come up with a program, but I'm not sure what standard I should use. I would love to get examples of what the big companies like Amazon are paying, but any and all examples would be appreciated. I'm selling shoes if that helps.

[rogerd]

Amazon pays 5% on just about everything, although if you send a direct referral to a specific book and the customer buys it, you'll snag 15%. If the customer does anything in the meantime, you'll be bumped to the 5%. I'd guess their average commissions on books run well under 10% because of the difficulty of getting, and keeping, a direct referral.

[vibgyor79]

dvduval.. I made quick check on your website and it looks like your average sale price is $100 plus. I suggest you give your affiliates a minimum of $5 per sale. $10 per sale would be ideal.

[Go60Guy]

I would strongly recommend 10% if you're serious about growing an affiliate marketing effort. I'm assuming that you have a sufficient margin to justify it. Ten percent will demonstrate seriousness to experienced affiliates - the ones you really want to bring on board.

I, also, would strongly recommend a cookie.

[oilman]

bare minimum 10-15%.

[buckworks]

A few examples...

... at Commission Junction:

Bexley pays 10% - cookie = 45 days
Zappos - 15%, 90 days
Shoes.com - 10%, 120 days
FamousFootwear - 10%, 60 days

... at Performics

Cloudwalkers - 10%, 90 days
Eddie Bauer - 5%, 15 days

... at LinkShare

Coldwater Creek - 5%, 7 days

[korkus2000]

I would expect at least 10% and a 30 day cookie. Anything smaller than that and I would be losing money sending my traffic to that affiliate.

[eljefe3]

If I can't make at least $20 per sale on items less than $150, I look elsewhere. I try to find programs that will earn at least $.35 per click and preferably around $1.00 per click.

[dvduval]

Without much experience in this area, I put someone on our dealer program, with commission at 40%. The only catch was that customers could not return items to us. I suggested that they find a dance studio to sell returns, etc.

After reading your posts, it sounds like 15-20% is quite generous. I have to admit that 40% is probably too high.
1) We are entering the order
2) Shipping the order
3) Providing basic account maintenance
4) Providing availability info when needed thru email

What about shipping charges? Our company charges about $9 for the item and this person is offering free shipping. So now this person is only making about 32%.

In addition we are charging a $5 drop-ship fee. Now we are down to 28%. If we sent a bulk shipment directly to the affiliate and then they fulfill the order, then there would be no drop-ship fee and the unit cost for shipping would be about $1.50. Unfortunately, this person is only selling about 3 units per week so that is out of the question.

My tendency is to say that either we do all of the fulfillment and he gets around 15-20% or he does all the fulfillment and gets 30-40% based on volume.

I'm sure I'll be facing these same questions as we roll out 3 new product lines this Fall. I appreciate the feedback.

[europeforvisitors]

I don't think there's any such thing as a "typical commission," except for specific types of affiliate programs.

Hotel affiliate programs, for example, often pay a 5% commission. The commission is low because the hotel-booking site is splitting a commission with the affiliate. But 5% of a $100 or $200 hotel room is still more than 5% of an Amazon.com paperback.

One of the two top poster-and-print retailerss pays a base commission of 20%, and $150 in sales per month will boost the rate to 21%. That sounds better than the hotel program's 5%, but the average poster sale is probably in the $15-20 range rather than the $100-200 range, meaning that the commission isn't going to be any higher (and probabl y will be lower) than on the average hotel booking.

In an ideal world, the hotel-booking engine would be paying a 21% commission like the print-and-poster retailer, and the affiliate would be raking in the dollars. :-) But that isn't going to happen because the hotel outfit isn't getting 21% itself, let alone getting enough per sale to pay that much to the affiliate.

In setting commission rates, you need to find out what affiliate programs are paying in your category. If you want to compete with that print-and-poster retailer, you'd better have a base commission of no less than 20%; if you want to compete with the hotel-booking engine, 5% is a good starting point.

[dvduval]

Well, in my category, ballroom dancing, there doesn't seem to be much of a precedent. We are the industry leader in the US and it's up to me to write the program. I found Buckworks listing of shoe companies very interesting. The ceiling seems to be around 20%, which you have further confirmed europevisitors.

Currently, we have one person running a website that gets a 40% discount, but he does all of the fulfillment and is responsible for customer returns; and we have one person who gets 15%, but they merely pass the sale to us and we do the rest. When it gets tricky is when someone wants to negotiate something other than these two models, which is the position I found myself in when I made this post. This third person who wants a 40% discount and us handling all of the fulfillment and returns doesn't fit these models.

One final question:
Do the companies paying the commission produce custom invoices to reflect the affiliate's name or do they just use a standard invoice?

[Travel]

David-
In our invoices we generally have both our name and the name of the affiliate. This helps the customer and affilaite.

Jessica

[mayor]

dvduval, a typical Internet based affiliate does nothing more than send traffic to your site, and you close the deal and handle everything from fullfillment to customer service to billing and returns. For this, I would try to offer around 10% commission if there will never be any reversals of orders due to returns (ie when the shoes don't fit well or they don't like the color) or 15% if you are going to accept customer returns and reverse commissions to the online affiliates.

On thing you might want to do is bump commissions up a couple of percentage points for top performers who refer the highest sales volumes to you.

If you have off-line affiliates who operate as dealers or manufacturing representatives the commission structure and participation are most likely totally different from the online affiliate arrangements.

You can learn a lot more about online affiliate programs by visiting some of the online affiliate networks, like Commission Junction, BeFree, LinkShare and Performance, for example.