How can I attract affiliates?

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Bryan Le

Bryan Le

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Jun 24, 2006
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Hey everyone,

I have decided to start my own affiliate system over on ForumShock. It is not live yet (but I am accepting sign ups), as I would like to nail down some good advice before I proceed to make it public. Now, the questions is, how do I attract affiliates?

I know, good pay, quick payouts. However, the profit margins are not exactly great, and I have decided on this payout structure...it is what best suits my business and the current profit margins.
  • Level 1: 5%
  • Level 2: 10%
  • Level 3: 15%
  • Level 4: 20%
With that current structure, affiliates can make up to $45.00 per sale. I think that is decent, correct?

I am considering starting a race...where the first affiliate to reach 100 sales will get a $250.00 bonus ($100.00 for 2nd, $50.00 for 3rd) on top of what they get from their own generated commissions.

However, how do I get enough affiliates to sign up to begin with? I want to wait until I have at least 25-30 affiliates so that it is an even and fair race. Is that number to optimistic?

What attracts you the most to a private affiliate system? What is an effect "call to action" message? What makes affiliates happy? Do sign up bonuses really matter? Do affiliates really look at that?

Some help would be great, thanks ahead of time.
Bryan
 


With sexy pictures.

p/s didn't read a thing you wrote, sorry too long for my ADD.
 
Bryan Le said:
Hey everyone,

I have decided to start my own affiliate system over on ForumShock. It is not live yet (but I am accepting sign ups), as I would like to nail down some good advice before I proceed to make it public. Now, the questions is, how do I attract affiliates?

I know, good pay, quick payouts. However, the profit margins are not exactly great, and I have decided on this payout structure...it is what best suits my business and the current profit margins.
  • Level 1: 5%
  • Level 2: 10%
  • Level 3: 15%
  • Level 4: 20%
With that current structure, affiliates can make up to $45.00 per sale. I think that is decent, correct?

I am considering starting a race...where the first affiliate to reach 100 sales will get a $250.00 bonus ($100.00 for 2nd, $50.00 for 3rd) on top of what they get from their own generated commissions.

However, how do I get enough affiliates to sign up to begin with? I want to wait until I have at least 25-30 affiliates so that it is an even and fair race. Is that number to optimistic?

What attracts you the most to a private affiliate system? What is an effect "call to action" message? What makes affiliates happy? Do sign up bonuses really matter? Do affiliates really look at that?

Some help would be great, thanks ahead of time.
Bryan
Click to expand...

If you can afford 20% why not give everyone 20%? Tiers only benefit larger companies and i understand your reason behind it but it might piss others off. The more you can give to an affiliate the more they can invest back in to driving more sales to you, its a vicious cycle but it works.
 
20% is a lot to be honest. My hope is that if they can get to that level (20+) sales a month, then they deserve the extra push and money...I hardly make any money when it is set at 20%.

Perhaps I should revise the tiers and do:

- 10%
- 15%
- 20%

Would that be more appealing?
 
What is your average sale and what is the conversion rate? Whatever commision structure you pick, this number should probably be around $20-$25. Its not uncommon for companies running an affiliate offer to take a loss. The higher your payout, the more new customers you are going ot get. I see companies on CJ with piss poor payouts. I think shoemoney raised the question on his radio show this week, how many of these sites are even making anything?

After you can confirm healthy payouts and show affliates solid number (such as, an average of 65 cents EPC) then you can recruit affiliates through forums, blogs, etc.
 
I'm not familiar with your business, but seeing that you're offering a service, does the average sale last several months? You can factor this into paying your affiliates more up front.

Attracting affiliates is all about providing a competitive program that can make them money. The first step in doing this is with high pay outs.
 
Thanks for all the wonderful comments and constructive criticism. To answer everyone's comments and questions...

In general, this will be for www.forumshock.com - in the original post, I have attached a link to the affiliate page.

Andrew:
The average amount that an affiliate will make on the first 10% tier is $9.75 (the lowest payout being $2.00, the highest being $22.50). At 15%, the average is $14.62. And finally, at 20%, the average is $19.50.

I do not understand the concept of affiliate marketing if the company loses money? I can see how that makes sense in hosting businesses where they are on a monthly subscription, but this is for a one time product/service. I can not afford to take a loss on every affiliate.

Katoved:
I'm sorry, but I do not understand your request.

Trigatch4:
I am, myself, pushing my own product/service. It is for paid posting (forum population) and my website is forumshock.com

Someone:
The average sale last several weeks, sometimes over a month, but it is not a recurring fee. It is a one time, upfront payment from the client.
 
I'd like to thank everyone who's helped out. By taking the advice everyone has given me, I have already gained 9 affiliates within 24 hours.
 
Bryan Le said:
Andrew:
The average amount that an affiliate will make on the first 10% tier is $9.75 (the lowest payout being $2.00, the highest being $22.50). At 15%, the average is $14.62. And finally, at 20%, the average is $19.50.
Click to expand...

There are a few different reasons. One is to build up a customer base e.g. Vonage. Obviously not what you are interested in. What you want is to be able to attract customers who will buy more of your services.

You would need a lot more data to be able to figure this out, but for example lets say your average sale was $50. You pay out affiliates $50, bringing each sale to a $10 loss from expenses. So, say you've brought in 10 new customers, and you lost $100. However, out of the 10, 1 buys a $250 packages, bringing your profit to $150.

This concept allows many businesses to grow rapidly while their competitors stand around going, how the fuck do they do that. The reason is a customer's lifetime value. Once you can estimate it, you can figure out how much money you can lose in the beginning to grow your customer base.

That may not be a viable option for you right now, but its something to think about in the future.
 
Thanks Andrew...I understand the concept now.

I'll be looking into this into the future, and hopefully soon. It makes a lot of sense to me now...
 
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