Question regarding Membership site affiliate commissions

[CharlesK]

Hello!

This is my first post, so I would like to introduce myself before getting to my question.

My name is Charles Kassotis, been marketing online in one form or another for about 6 years.

During that time I have had alot of success as an affiliate marketer and did well during the adsense boom, I have also experienced a fair share of failures as well and I have spent considerable time in SEO and Web Development.

I Have finally graduated to product creation!

Which brings me to this forum

I have designed a very unique link building membership site and I am getting ready for a beta test around the end of this month followed by a launch shortly after.

We are in the process of building the inhouse affiliate program for it and I am not 100% sure what to set affiliate commission rates at.

I would like the comm. to be recurring for the life of the customer.

We will test different price points so I cannot say exactly what the pricing structure will be at this time, but for the sake of example let's say:

Basic Membership: $47/month
Advanced : $77/month
Pro : $147/month

If you can give me an idea of what percentage of the membership fee or flat rate would be attractive to affiliates in a longterm commission structure, that would be great. The retention rate should be very high so the commision will definitely be over many months/years.

We are designing a simple two tier affiliate program using iDev software.

Thanks so much for your help!

Charles

[Richard Legg]

Hi Charles,

In my opinion, the minimum rate for any kind of digital product/service is going to be 50%.

You may want to offer more for select JV partners if you know that they can bring you lots of new members. I'm pretty sure iDevAffiliate allows you to specify different commission rates for specific affiliates.

With regards to using the 2-tier model, you should note that Paypal does not allow you to advertise any kind of multi-level commission plan.

You *may* be able to get away with it by contacting select partners and offering them a second-tier percentage of referrals (kind of like a "broker") but you don't want to openly advertise the fact on any webpage ... it's a good way to get your paypal account shut down pretty quickly.

Hope this helps,

Richard

[CharlesK]

Hi Richard,

Thanks for the feedback.

Actually, we decided to only do a one tier solution.

50% seems to be the minimum assuming it's an electronic one time commission, but I find with a membership program that pays recurring commissions it is much lower, somewhere 10-20%.

The other option is to give 50% on the first sale to and then 10-20% on the recurring fee.

Charles

[Todd Lamb]

It is also somehwat contingent on your desire/ability to attract JV's...why not throw it up to 50 or even 65% and grow a massive list when you have attracted some of the "big fish".

This is of course contingent on whether they like your product, but as has been said at least 1 million times. The money is in the list.

my .02 cents

Todd

[anthonyhull]

Hey Charles,

I've recently launched my membership site at www.easyprofitpack.com and I offer 40% recurring (forever) to regular affiliates and 50% recurring to select JV partners.

I think it also depends on what your price is too.. 50% of $50/month is more appealing than say 50% of $17/month.

Good luck!

Anthony

[CharlesK]

Thanks for the input guys!

Good luck with your site Anthony, I've heard some good things about it.

Charles

[BrianJ]

Hi Charles,

I would agree with Richard on this one, if a product is digital today
then you need to offer at least 50% to get serious players on board.

If you look at the membership sites that are run through clickbank you
will find that commissions are often at least 60% for both the front end
and the monthly charge (membership).

Also note that if your releasing your first product or have not branded yourself
to this point you might want to up the ante so to speak to do what you
can to get people on board.

If you get enough serious players backing you a smaller cut will be made
up for with volume. Your also building a list, your name and a product ...

Food for thought.