affiliate marketing income potential Archives

The average affiliate commission rate is between 5% and 30%. Physical products typically pay lower levels of commission than digital products. Amazon, for example pays typically between 3% and 10% to affiliates for referrals. This will vary depending on the product category. With digital product sales, affiliates can earn from 30%-40% and even more in some cases.

Digital products have fewer costs involved in the delivery and manufacturing process and can therefore reward affiliates more, since the affiliates take on the costs of advertising.

digital vs physical affiliate commissions

Average Affiliate Commission Rate: Subscriptions

One of the best ways to earn as an affiliate is through the sale of subscription products. With subscription affiliate products, affiliates can earn ongoing recurring commissions from products they sell. This can make a huge difference to earnings as an affiliate. Most affiliate products only pay you a “one off” commission, meaning you need to sell products over and over in order to keep making the commissions.

Subscription products offer ongoing value to customers. An example is an autoresponder. Autoresponders are used by online business owners to collect emails and deliver messages to promote their products. Because an autoresponder is a vital part of an online business, once they have been purchased customers often maintain their memberships/subscriptions for years. If you refer this kind of product it means you continue to earn from it as long as your referral maintains their subscription.

Average Affiliate Commission Rate: High Ticket Products

High ticket affiliate products pay much larger than average commissions because they carry a larger price tag. There’s both digital and physical high ticket items you can promote as an affiliate. Have a look at this item The Flying Hovercraft! It sells for $190,000 and Hammacher Schlemmer offers 8% commission to affiliates.

That’s a massive $15,200 in commission if you can make a sale. Many affiliates will presume that nobody buys such an item, but some people do. A single sale of a high ticket item like this is worth thousands of sales of a low value item. So even though fewer people buy large value items like this, it can be worth considering high ticket items.

High Ticket Vs Low Ticket Commissions

You might assume that most people won’t buy a high ticket item but some high ticket items sell really well; particularly if they offer huge value. For example, business training courses and 1:1 affiliate marketing coaching and mentoring courses are hugely popular. This is because a product which can be life changing, such as a business training course, is worth a lot.

With high ticket items, you only need a few sales to earn the same commission as you would with selling thousands of products sold from Amazon, for example.

Let’s take a typical product from Amazon like this one:

Given a 4% commission rate on this item you would only earn £2.20 (around $2.65) per sale! But with a $2497 business bundle you would earn $500, at (10% commission), or $1000 (at 20%).

Learn more about these business bundles here.

Because Amazon only pays tiny commissions, you’ll need to sell thousands of items from Amazon in order to earn the same commission as just one high ticket sale.

By choosing both subscription products and high ticket items, you give yourself a better chance of succeeding with an affiliate marketing business.

All affiliates start at zero when they begin, but ultimately the affiliate marketing income potential is huge. Top affiliates can earn millions from their affiliate businesses. The highest earners are those who create products themselves and have affiliates selling the products for them. But these entrepreneurs have often come from an affiliate background themselves and have become super affiliates; earning millions from selling other people’s products online; before going on to create their own products and courses.

Despite the affiliate marketing income potential that is possible, many affiliates struggle. The affiliate marketing failure rate is around 95% which means many who attempt it will simply drop out. But for the 5% who stick it out there are huge rewards, particularly if they promote the right program and are able to sell in bulk and scale up to a global audience.

Affiliate Marketing Income Potential

But selling in high numbers is not the only key to affiliate success. Selling the right products and using the right business model and marketing strategies is also a major factor in someone’s success.

There’s many different affiliate marketing business models and if you get stuck with the wrong product or marketing strategy, it could mean your affiliate business goes nowhere. Amazon for example typically pays between 1% and 11% commissions on products within its affiliate program. Digital products pay much more – often 30%-50% commission on referred sales.

Smart affiliates know to use recurring commission affiliate programs and high ticket products to give them the most profit for their efforts. But many new affiliates don’t know to do this, or can’t afford to invest in a high ticket program which gives them larger commissions. This means they’re stuck with low value items to sell and this limits the choice of marketing strategies that are open to them.

Even when they make a sale, if the commission level is as small as 1%, that’s only a tiny amount, even with an expensive item.

Affiliate Marketing Income Potential – Starting Out

When an affiliate starts out they will be earning nothing. Everything they do will determine whether they make a sale online or not. The first few months and years of an affiliate business are the hardest. Nothing is guaranteed in affiliate marketing and for many, several months of hard work with little to show is too much to bare.

If you manage to get through this stage and make your first online sale, congratulations. This is a fantastic achievement and should be celebrated! Affiliates should always celebrate small wins because the small wins lead to bigger wins!

Income is generally sporadic even once you’ve broken through and had some successful sales. From one month to the next, you won’t have a guaranteed income. This is why many quit. But if you keep going and hold onto the day job while you build your affiliate business, income can overtake whatever you’re earning from trading your time for money in a job – even if you have a six figure salary.

Subscription Products

Going back to business models it’s important to use some subscription products in your affiliate business. With a low value product from Amazon which earns 3% commission, you’ll only earn $3 on a sale of a $100 product. That’s a tiny amount and you’ll need to sell a lot of them to make a good income.

With a subscription product, your earnings compound over time because each sale you make builds your monthly income. So selling a software product which pays a recurring commission can give you $20-$30 each and every month (providing your customer maintains their subscription).

10 sales gives you $300 a month, 100 sales gives you $3000 a month, and so on. With a global audience to sell to, there’s an unlimited earning potential. When you add high ticket products to your product range, your earning potential increases again. Providing you choose good products which give huge value, customers will maintain their memberships and subscriptions – often for a lifetime.

High Ticket Products

What is high ticket affiliate marketing? High ticket products are those products which carry a much higher price tag than most affiliate products. Most affiliates don’t realise that this is the key to large earnings with affiliate marketing, in addition to subscription products. With a high ticket product, an affiliate can earn commissions ranging from $500 to $5000 for an individual sale! What many think is that selling such a product will be much more difficult than selling a $100 product to earn $50.

But to earn $500 you would need to sell 10 of the lower valued ($100) product or 1 product at $1000 – (given a 50% commission for both). To earn $5000 with the lower valued product you would need to sell 100, or sell just 1 product valued at $10,000. Selling a higher priced product might be more difficult than selling the lower valued product, but it won’t be 100 times as difficult! So it makes sense to go for the higher priced items as an affiliate.

In addition to this, by choosing a sales funnel with a built in sales team, who close sales on your behalf, you can avoid having to do much of the selling. With a good high ticket sales funnel you only need refer the initial sale. If your customer should purchase another product from the range, even years later, you still get credit for this sale. See SFM Digital Business System for more on this.

Affiliate Marketing Income Potential – Summary

The affiliate marketing income potential is unlimited but many affiliates don’t earn anything – especially when starting out. To earn money from affiliate marketing takes some time, patience and dedication. But once you start breaking through and making sales, you can focus on the things which have created those outcomes. In the first instance, you’ll spend a lot of time on unproductive actions which may not bring about sales. But if you stick with it long enough and keep learning, you should see some results.

Initial results aren’t consistent for most affiliate. They tend to be sporadic depending on your marketing methods. To help build a more consistent income from affiliate marketing it’s worth using subscription products which pay a recurring income month after month.

High ticket products too can help you generate more cash flow which should be reinvested back into your affiliate business to help it grow. Keep hold of the day job as long as possible because once you start relying on affiliate income you have less to invest back into growing your business.

Access a free video series to learn more about affiliate marketing here.