How to choose the right affiliate percentage?

In affiliate marketing, choosing the right commission percentage is critical. There are several important things to consider when choosing a commission percentage, and that’s what we’ll cover in this article.

Affiliate marketing: Halfway between direct sales and advertising

Affiliate marketing is halfway between traditional advertising and generating sales directly to you, as it brings more visibility and an increase in your sales. Affiliation is, in general, adapted to bring traffic to your website. Each visitor that arrives on your website is a potential new customer, you expose them to your brand and your products.

Remember, an affiliate will try to help you sell your product, so visitors referred by the affiliate will be highly interested in making a purchase from your store. Affiliate marketing produces highly relevant and qualified leads.

Considering Your Profit Margin & Affiliate Benefits

In affiliation, it is not necessarily necessary to reason in pure profit margin. A visitor who is referred to you via an affiliate link may make a purchase, but he may also browse your website and share a link with his friends, or bookmark your site for a future purchase. They may sign up for your newsletter and/or follow you on your social networks, thus becoming a potential buyer a little later.

So for each sale that is referred to you, several visitors will have known your brand, interacted with your website, maybe bought and can potentially generate sales for you in the future.

Cost of acquiring a new customer

In e-commerce, it is important to be able to calculate an acquisition cost per customer. In this cost of acquisition, we can enter the general advertising costs, the affiliation costs and any other costs that contributed to transform a visitor into a customer.

Once you have a new customer, it’s up to you to keep them coming back through promotions or by sending them newsletters. Once they are your customer, if they buy from you directly afterwards, you have potentially gained a new customer for life.

Attracting affiliates

The commission rate you pay on a referred shopping cart is one of the parameters that will allow you to attract affiliates and especially to have affiliates working hard to bring you sales. It is therefore important to maximize your commission rate to get a good return.

Choose your commission rate

If we take into account all that has been mentioned above, we cannot base our commission rate only on the profit margin of our products. We must also think in terms of customer acquisition and targeted advertising. It is therefore important to take all the parameters into account when making your decision.

The commission rate is the number one parameter of your affiliate campaign. If it is too low (below 15% for example), then affiliates will unfortunately not be interested in working with you.