The typical affiliate commission you earn as an affiliate will depend on the type of product you choose and the program offering it. Physical affiliate products typically pay less than 10%. Amazon, for example, pays affiliates between 1% and 11% commission on product referrals. Whereas the typical affiliate commission on digital products is much higher – around 30%.
Why are digital products more lucrative? Well perhaps because they carry less costs. Physical products need to be manufactured, stored and posted. Whereas digital products are typically created once and then sold over the internet. Digital products can be online membership sites, software and digital downloadable products such as ebooks and video courses. Once created there’s little or no manufacturing costs, and no postage or storage costs are involved. The main cost is in marketing the products, which can be passed on to affiliate marketers. Hence why affiliates will receive a larger commission based on the sale.
Typical Affiliate Commission – Recurring Commissions
Another consideration for affiliate marketers is recurring income affiliate programs. With a recurring income program, a single sale can generate an ongoing income. With some membership products and software products, product owners pay ongoing commissions to their affiliates. This is far better than a single “one-time” commission. For certain products and services, customers will continue using them for a lifetime. So the affiliate will earn a lifetime of commissions from each customer they find!
Some of the best kinds of products to use as an affiliate are business tools and software used by businesses; used by other affiliate marketers and online business owners. With an online business, once you start making an income from it, you’ll be using the tools and software for a long time, possibly for a lifetime. See also lifetime commissions affiliate program.
If you have referred this kind of product, your efforts will go much further in terms of commissions.
Typical Affiliate Commission – High Ticket Products
High ticket items pay much more than the typical affiliate commissions. With a high ticket product, you can make huge commissions whether the product is physical or digital. See also what is high ticket affiliate marketing.
Above is an example of a high ticket physical product – a submarine! A sale of this item can give you a commission of $24,000!
So, as you can see, your choice of affiliate products to promote can make a massive difference to your earning potential.
Choosing Affiliate Products To Promote
With smaller valued affiliate products you’ll obviously earn a lot less when you make a sale. Particularly if you choose to promote physical products from the likes of Amazon. See Amazon affiliate marketing commission and also affiliate marketing business models.
A product from Amazon which costs $40, for example, can pay as little as 1% or $0.40 in commission. So you’ll need to sell a huge amount of products in order to make it a viable business. Subscriptions, high ticket products and digital products can pay a lot more.
But depending on your promotion strategy you should choose carefully. Digital products can be more difficult to sell, particularly if they are a little arbitrary. A physical product is obvious whereas the value of a digital product may be harder to understand.
Combining Affiliate Products In A Product Range
One of the best ways to do affiliate marketing is with a product range. Selling “one-off” items can be difficult because you need to keep selling in order to keep making money. What’s worse is that the company you are referring the customer to gets to keep the customer, forever! You don’t get rewarded for later purchases made by your referral.
With a product range, which includes subscriptions, you can earn recurring commissions from existing customers. You also benefit from later purchases made by your referrals, whether you close the sale or not! A good product range offers one off sales, multiple products within a range (including high ticket) and subscription products. So you get multiple earning strategies from referring the entry level product. See SFM Digital Business System for a product range.
Typical Affiliate Commission – Summary
The typical affiliate commission is very low. Physical products pay from 1% to 11% commissions to affiliates. Digital products pay more; generally around 30% but some pay up to 100%! With subscription products and high ticket products affiliates can earn a lot more.
A product with a large price, a large commission percentage or both will pay the most. Subscription products can pay out more than high ticket products over time. If a customer maintains their membership for years, the affiliate referring the sale benefits from a lifetime of commissions from each customer they refer.
So before diving into affiliate marketing, it’s worth noting what levels of commissions are being offered. Considering affiliate marketing is a tough business, it’s far better to be prepared because you will receive much larger rewards if you choose the right products to begin with!
