help with affiliate program, which payout is best?

Hello folks,

I am setting up an affiliate program for an iphone accessories store website. The margins for the website is somewhat slim and going over the payout to the affiliate I began to think it was not all that good. Can I get some feedback on if this is a good payout system?

Here it is - Per lead $0.03 and per transaction 3%. The transaction payout is for the life of the shopper, not 30 days. So if the shopper comes back some 3 months later the affiliate will get another 3% on the transaction. My margins might allow me for 10% profit. After cc fees and what not the site would only make 5% per sale, leaving a bit under 2% per sale after affiliate gets his portion. Am I being too generous?

The average transaction is estimated to be $50. Average lead to transaction is at 5%, which I am not sure is too high/low.

Any help/tips appreciated. Thanks

 

If you have thin margins, maybe recruiting affiliates isn't for you. I bet there are many other iphone stores that have higher margins so they can give 15% to there affiliates. Accessories is where the money is, however as an affiliate you can get something like 3% from promoting the the actual apple shop.

Think of it this way. If 5% (extremely high for arguments sake) of all visitors to your store turn into leads and then buy, that is (50/100*3)+0.03 = $1.53. Now divide that by 20, so 1.53/20=7.5 cents roughly. If the payout is at 7.5 cents a visitor (overestimate), many affiliates could be making better money elsewhere.

 

Thanks for the reply. The last time I checked on CJ Apple was paying out 1%, and I believe that is a 30 day cookie.

I don't mind paying a bit more per user the affiliate sends, but that does not seem to be common practice. I could make the cookie last upto 6 months, would that be more attractive. Overall, I could always raise the prices a few percentages. I am not sure what an affiliate would have to lose though, just to post a link on his/her website or forum sig doesn't take any time.

If I raised the affiliate payout to 5% and lowered the per click down to .01, would it be a bit more attractive?

 

When you said per lead in the first post, did you mean per click? If you raised the affiliate payout to 5%, more people would be interested. I suggest to not pay by click, unless you have a brilliant script for detecting fake clicks.

Are these official accessories? if so then this would be quite a good affiliate payout

 

Yeah, I meant per click, or I can arrange it to be per click+registrant. Meaning, the click isn't counted unless the person registers. Then on top of that a 5% payout. If I did the 5% I think I would need to make the cookie for 30 days instead of 90. Originally I was thinking for the life of the buyer, so the affiliate would get 5% for each purchase the buyer makes, for life. But, I think that might break me

Well, for the fake script thing, basically the time spent and pages viewed could be one way to count clicks. Of course IP address as well. But, bots are very clever and keeping track of new bots is a real pain.

Yes, these products are specifically for the iphone. I will have products for the ipod too though.

 

What I mean by official accessories is are they manufactured by Apple or a 3rd party?

 

no, not official from apple. it is hard to be in that position. I applied to be a reseller but they denied me. seems to be quite common.