Affiliate Marketing: Choosing Between a Flat Fee Referral Program or a Commission Based Program

When you are an affiliate with your own website and you're trying to decide between setting up a commission based affiliate program or a flat fee referral program you need to make certain considerations. The main determination is to figure out how much you will be paid for each new referral vs. how much money you could be making if you're making a commission from every single sale, then you need a estimate or test to see how many of the visitors from your website you can convince to buy a product or service that you're recommending (linking two from your website).

The example would be that your reviewing to different affiliate programs from two similar merchants. The first merchant is offering an affiliate program that pays a flat fee of $5.00 for each new customer that you refer to their website. The second merchant that you're looking at is offering an affiliate program that is commission based in pays out 20% of sales that you refer. Now assume that the visitor from your site that you refer to the merchants site purchases $200 worth of the merchants products or services.

Under the program that offers the commission based affiliate program you would make double the money you would make under the program that is flat fee based. However, the program with a flat fee offers $20.00 for every new customer so based on the commission based program your website referral would need to spend at least $300 in order for you to receive a similar amount of money.

Obviously if the products that are being sold or sold at a low cost there's a very little chance that you're going to make more than $20.00 in commissions so the flat fee program would be better for you. Understand though, that most merchants do not offer flat feet compensation to promote items that are low in cost.

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