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January 3rd, 2016, 01:25 AM #1
What Should The Commission Be?
- Join Date
- September 12th, 2012
My mother ran a small clothing shop but her landlord would not renew her lease because he found someone to sign a longer lease for more money so I told her that I would help her with an online shop.
We've had a lot of problems (designers not doing the work correctly or on time, merchant account issues, etc.) but things have settled down and we have started to do some advertising and get some orders. We are thinking that in addition to Adwords we may start an affiliate program but I've looked at some of the commission rates you can get for clothing stores through skimlinks and while some are in the 4-6% range a lot are higher.
So far the Average Order Value is $150 - the lowest order so far has been $80 and the highest was $680 - if we were going to offer affiliates 3% should we even bother - would you as an affiliate even bother to sign up at that rate?
I was thinking maybe we could do the 3% and every month we would reward the 2nd highest affiliate with double the commission (6%) and triple the highest earning affiliate (9%)
Set commission per item: Full Price Items get say 5% commission - Items on Sale by 30% or less get 3% and Clearance Items (which she takes a loss on) only get 1% - would that be too much of a turn off?
Sorry I did some affiliate stuff a long time ago but I only used PPC things like AdWords and Shopzilla and such I never really went with Linkshare or things like that. Sorry if a similar question has been asked (all I could find was: http://www.abestweb.com/forums/showt...est+commission) and I hope these questions are insulting anyone - I know most affiliate work really hard on their businesses just trying to help my mom as best I can.
January 3rd, 2016, 08:39 AM #2
- Join Date
- November 14th, 2005
- Chapel Hill, NC
Some of the answers depend on your location in this world.You must climb this mountain. There is no elevator. ---- Don't stick your finger in the liquid nitrogen.
January 3rd, 2016, 12:14 PM #3
Factors like your conversion rate can also play a role here. It seems that you've already got some historical information available, which is great, as it makes affiliates more comfortable that sending traffic to your site is likely to result in a decent sales percentage. I don't think you need to double or triple commissions, but do reserve a higher rate for your top performers (not just the highest but the higher handful - they will naturally show up with time). I've seen programs be successful with a multiple commission structure such as the one you are considering - just make sure that it is very clearly spelled out to the affiliates so that there are no surprises when something sells.
Make sure you've allowed for a commission override to a network as well in your calculations. As an independent company, you may be less likely to attract quality affiliates who don't know if/when you will pay them, how good your tracking is, and who just don't want to deal with logging into a bunch of in-house program interfaces each day to get their results. You will also be discovered more easily within a network by affiliate prospects, especially if you have a strong EPC and merchant rating. This will save you from spending a lot of time recruiting, as affiliate marketing is a lot about the 80/20 rule - 80% do nothing, 20% product. Most days I wonder if that isn't 90/10!
Good luck with your new program.
January 3rd, 2016, 02:01 PM #4
- Join Date
- September 12th, 2012
Sorry and thank you, Witzer - in my haste I did forget to mention we are in the US and at the present time we are only shipping to the US - Canada will be added and then we will be expanding we just want to find a good solution because we charge a flat shipping rate in the US but because weights and measures for our products are all over the place we need to come up with a fair solution for non-US buyers.
And of course, thank you Jeannine - you've given me even more great info to consider. I do recall EONS ago helping a friend with their e-commerce and helping her sign up with Share a Sale and yes, affiliate applications flowed in so it probably may be better to hold off a bit, try to convert some customers into affiliates and offer them coupons and/or points, then branch out to smaller bloggers and then see if we could handle playing with the big boys.
I probably am taking for granted too much that people would automatically trust us for payouts and such because we wouldn't need / couldn't handle the "press" of not paying and I am not even remotely that kind of person who wouldn't pay but of course people don't / won't know that.
Anyway, thank you both for taking the time to reply and anymore feedback from anyone here would be greatly appreciated!
Happy New Year, All.
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