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.
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.