Hey everyone. This is my first post. I have been reading the site for a few weeks now and decided to take the plunge. I have been tasked to start an affiliate company for the toy manufacturing company I work for. The affiliates would link to our products and make a percentage off the sale. My question is what is a good percentage that would entice affiliates to want to sell our stuff. Our products are very nitch and depend entirely on what licenses we hold. The licences are based on TV shows, movies comic books etc. Any help would be greatly appreciated as I have never done this before.
There's no single right answer to this one. Pretty much what you want to consider your markup, expected profit margin, cost of managing the program (the network you choose will have a major impact on this) and supporting affiliates, as well as what similar competitors in your space are paying. Before launching an affiliate program, you need to first understand your own business, especially the marketing aspect of it. Too many people when they create an affiliate program have the 'if we build it they will come' mentality, which I have personally seen fail time and time again. For instance, when trying to find out what a good commission rate to pay is, start by putting yourself into a possible scenario to see what numbers you'll need to compete. Let's say your product is 'Blue Widgets', as of course, you'd love the blogger who currently ranks #1 in Google for 'Blue Widgets' to promote your products rather than your competitors or AdSense. Start by taking a look at your own internal conversion rates for the products, as well as the market price (the AdWords CPC for a keyword is a good indicator). If you know that AdWords content network bids for 'Blue Widgets' are 10 cents a click, and your website converts at 5%, then you will need to work out a setup where your affiliate will earn over $2.00 per sale, or else they have no incentive to switch from AdSense to promoting your product. This is just one of many things to consider, but when setting an affiliate commission level, a very important one. Best of luck
Tough call. If you go with a network, for a product like yours I'd recommend Shareasale. Big networks can give you access to a lot of affiliates, but you will often get lost amongst their large number of offers. Also, it limits your direct access to affiliates, which is really key to your success. What I'd do... start by using a company like Shareasale, but create a large affiliate resource section on your own site, that encourages communication, so you can get a direct line to your current and potential affiliates. Once you're successful, you may want to bring things in house later.