affiliate marketing business models Archives - Affiliate Marketing Mentors

There’s many affiliate marketing business models you can use as an affiliate. Not all of them give you the same benefits either so it’s prudent to do your homework. You could spend years working on your affiliate marketing business and make peanuts if you choose the wrong one!

Business models for physical affiliate products tend to pay far less than those for digital products, for example. Take for example Amazon and eBay who’s affiliate programs pay between 1% and 10% commissions. Compare this to digital products which pay from 40% to 100% commissions and you can see the difference isn’t a tiny one!

Sell just 10 products from Amazon at $40 a product and you’ll earn only $12 at 3% commission. But sell the same value of digital products and you’ll earn $160 (at 40% commission).

Obviously with the physical affiliate products business model you’ll need to deal in large volumes. But there’s more to consider too when it comes to affiliate marketing business models.

Affiliate Marketing Business Models – Recurring Income Products

Digital products also offer recurring commission on certain products. If you choose business tools you can even earn lifetime commissions on sales you make should your customer stick to the product for good! Recurring commission affiliate programs aren’t all alike either. Some only pay you the commissions for the first year. After that, your commissions end and you’ve sent your customer to the product owner, who could go on to earn a lifetime of sales from your efforts.

Recurring commissions are often found in business products and tools used for online businesses. Autoresponders, hosting providers, online marketing courses and SEO and keyword tools are just some examples of products which offer lifetime commissions.

It’s well worth choosing these kinds of products if you’re serious about making your affiliate business pay too. Compared to one-off commissions from single-point-of-sale products, you could save yourself a lot of hard work and make your life easier.

Affiliate Marketing Business Models – The Six Figure Sales Funnel

You can build a six figure business from affiliate marketing if you use the right business model. It’s a whole lot more difficult if you’re stuck with low paying physical products and a slow marketing strategy. But with high ticket digital products you can maximise your earning potential and scale up quickly using paid marketing strategies.

With low valued products, you’re stuck with cheap and free marketing tactics which are time consuming, slow and unscalable.

The six figure affiliate business model uses a range of products too, not just one. With a product range, you can offer your products to many people. A low valued “entry level” product is just the beginning of the sales funnel. A mid-range product and high ticket product should be a part of a six figure sales funnel. Add in recurring commission products and multi tier commissions and you have several income streams from a single funnel.

Build a sales funnel like this: access here.

Multi-Tier Commissions, Subscriptions, High Ticket, Built In Sales Team

The SFM Digital Business System offers a high ticket product range paying up to 40% commissions on a range of digital products:

Affiliate marketing business models don’t often offer this in terms of commission levels. In fact most affiliate business models will pay out $1 a month for each subscriber you get on your email list. With The SFM model, you should average $5 a month per subscriber – 5 times that of the average sales funnel.

Of course this all depends on your advertising. Once you have set up your sales funnel, you’ll need to market your online business. The SFM offers training and education for anyone wanting to start an online business from scratch using this system and strategy.

You’ll need a marketing budget in order to drive targeted visitors into your sales funnel. Or, create content if you have the time.

Learn more through this free video series.

Summary

There’s various affiliate marketing business models out there. Free products are free, but often end up giving you less back than the high ticket affiliate products which are worth paying for.

With a high ticket product, you get a high commission. With a business model which offers high ticket, subscription commissions, a product range, multi-tier and a built in sales team, you will be able to earn far more than with a free affiliate product which only pays you once.

Whatever affiliate business model you choose, think about the hours you’ll be putting in making those sales. With often what amounts to the same amount of effort, you can earn a lot more using the right products.

Access a free video series to learn more about The SFM Digital Business system and product range.

You can download this article here: Affiliate Marketing Business Model PDF.

There’s many affiliate revenue model examples you can look at before building an affiliate business. With affiliate marketing, the affiliate refers customers to a product online.

When someone buys from an affiliate’s unique link, the sale is tracked back to that person and they get a commission. To do well as an affiliate you need to learn how to sell through your affiliate links. Once you can do this well, you can repeat the sales you’ve made quite easily, having learned from your experience.

Top affiliates learn how to sell online and then scale up this success to sell multiple products. But there’s various affiliate revenue models you can choose from, and it’s wise to know which products will give you most commission for your hard work.

Affiliate Revenue Model Examples – Amazon

Amazon pays affiliates between 0% and 10% commissions depending on what kind of product they sell. Let’s use the example of a 3% commission. As you can see in the image below, products such as toys and home improvement items fall into this category.

So let’s say our example affiliate is selling from the toys category. Small value toys will only earn tiny commissions. So an astute affiliate will choose products which can earn them a larger commission. Since we’re looking at affiliate revenue model examples, let’s take this as the first one. The drone below sells for £947 on Amazon (about $1300). The affiliate commission on the sale would therefore be £28.41 (or $39).

So obviously if you choose to sell from Amazon, you’ll need to sell a lot of products in order to make your affiliate business a worthwhile enterprise. But if you can sell a lot of products, from a niche website for example, and automate the process, it could be worthwhile. The other thing to consider with this example is that your margin is very low. So if you intend on using paid marketing, you only have $39 of leverage to play with your marketing.

Affiliate Revenue Model Examples – Hammacher Schlemmer

Hammacher Schlemmer offers affiliates 8% commissions on products from its site. Again, this isn’t great but with some of the more expensive items like that pictured above, you can earn larger commissions. You’ll earn $15,200 on a flying hovercraft if you managed to sell one through your affiliate link! But of course not everyone is in the market for a flying hovercraft. You might sell more of a lower priced product which is more affordable.

Here’s an other example which will likely sell in greater numbers than your flying hovercraft will!

Looking at the ride on Children’s Jaguar convertible, you’ll earn $20 if you sold one through your affiliate link. So you’ll need to sell a fair few of these to make a realistic income. Compare the 8% commission rate to Amazon and you’d expect to make $7.50, given Amazon’s 3% commission rate on toys. That’s quite a lot less than with Hammacher Schlemmer.

Affiliate Revenue Model Examples – Digital Products

Digital products tend to offer the affiliate larger commission percentages than physical products do. Let’s look at affiliate revenue model examples using Clickbank. Clickbank is a digital marketplace where you’ll find thousands of digital products to sell. You can also find digital products on JVZoo.com and Click2Sell.com.

Here’s an example of a Clickbank product I found at the top of the Health and Fitness niche in the Clickbank marketplace.

As you can see, you’ll earn $25.13 on a sale of a $46.20 product. That’s a little over 50% commission on the product! Quite a dramatic step up from a 3% commission from Amazon.

So how can digital product afford to give so much to the affiliate? Well, simply put digital products don’t spend so much on postage, manufacturing and handling costs. Their main costs are therefore advertising, which is what the affiliate does.

Affiliate Recurring Commissions

Another consideration with affiliate marketing is affiliate recurring commissions. Certain products on Clickbank offer recurring commissions. You can find them using a website called CBEngine.com. Just scroll down the left hand side and click on the recurring tab. You’ll find multiple digital products which offer ongoing commissions for memberships and software products.

Recurring commissions are awesome for affiliates because you can continue to earn a regular income from sales you’ve made previously. It’s a great way to stabilise your income as an affiliate marketer.

If you choose wisely when you come to promote affiliate products, each membership or software product you sell can potentially earn you an income for life. See also lifetime commissions affiliate program.

High Ticket Digital Products

High ticket digital products are the best kinds of products to sell in terms of income and affiliate commissions. Given that physical products pay the least in terms of percentage commission, and higher value products pay more (whichever products you promote), a great way to monetise an affiliate business is through the use of high value digital products.

With high value digital products you get the best of both worlds: high percentage commission and large value products. So a sale of a $2500 product can earn you $1000 in a single sale, for example. A $20,000 product can earn you $8000 for a single sale. The downside of using high ticket digital products is that you’ll need to purchase the products yourself in order to benefit from the highest commission possible.

Using A Product Range

A product range gives you larger earning power as an affiliate than with only a single product to sell. With a single product you can only earn a single commission per customer. So you’ll need multiple customers to make a business out of your sales.

With a product range, you can benefit from multiple products within a range and sell products to existing customers. Most business models have customer loyalty – returning customers who purchase again and again.

high ticket products — The Product range within the SFM Digital Business System

But most of affiliate marketing product you refer someone to a product and they become loyal to that company, not to you as an affiliate. With a product range you simply refer the customer once, and can benefit from later purchases they make within a product range.

Affiliate Revenue Model Examples – Summary

So as you can see, there’s a variety of affiliate revenue models available for affiliates to choose from. Physical products from Amazon pay from 0% to 10% commissions. Digital products typically pay around 40%-50% commissions. You can also use recurring commission products and high ticket digital products to maximise your revenue potential.

The highest paying affiliate products offer multiple earning strategies including:

Digital products which pay up to 100% commissions
A product range – a number of products to “up-sell” to existing customers
Multi-tier commissions – some affiliate programs pay you commissions based on sales generated by your referrals. See best two tier affiliate programs.
High ticket digital products – pay the largest commissions on high value products – e.g. training courses and memberships
A built in sales team – closing sales on your behalf.

See SFM Digital Business System to learn more about this model.