The majority of affiliates begin by adding merchant partner links to their sites in order to earn commissions on purchases made by site visitors they deliver to the merchant. Affiliates earn no commissions if the would-be buyer lands on the merchant site, but decides against buying. This type of program is called pay for performance, and is popular with many merchants because they have no upfront costs if sales don’t materialize. Some merchants are, however, re-evaluating their programs because they are seeing a high percentage of their affiliate buyers coming from their catalog or customer lists, and feel many are buyers they could have reached themselves. Some companies will, as a result, be more selective in their affiliate approvals. And some super affiliates (high producers) may also see changes in programs that reward them with higher commission levels.
But there are other commission programs:
Pay per lead – Under this type of program, the merchant or advertiser pays the affiliate for each lead that is referred to the merchant or service provider, regardless of whether a sales is made. These programs are often used by providers of professional services or regulated services, such as brokerage or insurance. This is also called pay-per-click, because all that is required is that the customer click from the affiliate website to that of the seller.
Pay-per-sale – In this type of arrangement, the seller pays the affiliate a flat fee for certain types of sales. One industry that uses the flat rate commission model is travel, with some sites offering affiliates specific amounts for referrals that lead to sales of airline tickets, and the rental of hotel rooms and cars.
Successful affiliates utilize a combination of the above programs, and conduct partner negotiations based upon the models typically used in their merchants’ industries.