How to Select an Affiliate Percentage
It may be hard to settle on a percentage to share with your Affiliates for their successful referrals. This article shares some information and strategies to help you plan and maintain your Affiliate relationships.
Information on Affiliate percentages
- The percentage that you choose for each Affiliate is the amount of your initial commission that you intend to give to them when a sale is completed based on their referral. Your Affiliates only receive a commission when someone that they referred to your product purchases that product—they don't make money unless you make money.
- You can set the percentage for each Affiliate in your Creator Dashboard. An Affiliate earns the same percentage on all of your products.
- Affiliate percentages across a variety of programs (e.g., Amazon, eBay, ClickBank) typically vary from roughly 5% to 30%. Percentages can be lower than 5% or higher than 100%, although on Blender Market you are limited to 100%.
Strategies for choosing Affiliate percentages
- Consider instituting a standard minimum percentage during a trial period for some or all of your Affiliates. The benefit of a trial period—for example, 3 months—is that you can evaluate what sorts of referrals and sales quantity you will enjoy from each of your Affiliates. At the end of the period, the percentage could be left the same or raised according to each Affiliate's effect on your sales, but you won't be in the awkward position of lowering the percentage if an Affiliate's referrals aren't as productive as you might like. They may just be getting the hang of things or expanding their audience, and you may be able to increase their percentage in the future.
- Whether you choose to stick within the 5–30% average range is up to you. If a potential Affiliate is extremely influential and you want to make your partnership worthwhile to them, consider bumping the percentage up.
- The percentage that you select should reflect each Affiliate's value to your business. If an Affiliate sends you the most sales of all your Affiliates, they should have the highest percentage.
- Find out whether a higher percentage will give your products greater exposure. For instance, BlenderNation offers Creators twice as much ad exposure for a 20% rate than for a 10% rate. These sorts of tangible benefits can make paying out a higher percentage to certain Affiliates more worthwhile for you.
- The higher the percentage that you grant an Affiliate, the less you will take home on each sale. But keep in mind that many of the customers that your Affiliates send to your product(s) may become repeat customers by purchasing your other products. Furthermore, many of those customers may end up referring even more potential customers to your products. Spending a little money to increase your sales and loyal customer base over the long-term is a good strategy to grow your business.
- A high percentage does not always equal a lot of sales. Consider the quality of referrals that you will receive (or are receiving) as you set or adjust Affiliates' percentages. If you get lots of traffic from the referrals but those referrals only result in a sale once a year, you might want to decrease the percentage to better reflect that Affiliate's value to your business.
- If you have a new product and want to incentivize your Affiliates to promote it, consider bumping up their percentages for the first few weeks or months that the product is on sale. Driving a lot of traffic to your new products can get them off to a good start, increase the likelihood that customers will review them, and generally increase the buzz around them.
- Identify reasons or times that you might want to change Affiliates' percentages either temporarily or more permanently. Maybe you want to review all of your Affiliates once a year, or once each quarter to make performance-based percentage changes. Or perhaps you want to increase or decrease percentages during a Blender Market sale to drive more sales or increase your profit. Or maybe you want to celebrate Affiliate anniversaries by bumping their percentages up for a couple of days as a way of saying 'thank you'. Make sure to communicate these sorts of regular changes to your Affiliates, thereby ensuring that they feel valued.
- If you want to give a higher percentage to an Affiliate but can't afford to, consider offering other sorts of perks. Some of the least expensive things can make people feel the most valued. For instance, allowing them to preview not-yet-released products, mailing them a thank you card, or publicly highlighting that they are one of your trusted Affiliates are all ways that you can compensate for a percentage that isn't as high as you (or they) would like.
- Do your best to reach an agreement with your Affiliate about the percentage that you are offering them. The decision is ultimately yours, of course, but having a conversation with your Affiliate about what they want and what you can afford will help to maintain the health of your working relationship.