Choose high commission affiliate programs to benefit from larger commissions from every sale. Small value items earn smaller commissions. An affiliate program which you sell can earn you either $50, or $500. Given that you may be putting in the same amount of effort in, surely it is better to choose the high ticket program?
High Commission Affiliate Programs
There are several ways to benefit from the sale of affiliate programs:
- The initial sale – Of course a sale of $100 will only earn you $50 (with an 50% commission rate). Given a high ticket sale of say $2000, you can earn $1000 on each sale. If both sales take roughly the same amount of work to produce, which product would you prefer to sell? Of course the answer is the high ticket product.
- Membership Commissions – By promoting high ticket affiliate programs, you can benefit from not only the initial (high ticket) sale but also from monthly membership commissions. This means that you earn commissions each and every month from members who you have introduced to a program.
- Up-Sales – By having a range of further products to promote to your existing customers, you increase the possibility of earning from them. These products and services can also be promoted and sold by a:
- Built In Sales Team – This means you can concentrate on the initial sale. You also benefit from the lifetime value of a customer with each further purchase made by your customer after your initial referral.
High Commission Affiliate Programs Vs. Low Commission Affiliate Programs
There are various other advantages to choosing high commission affiliate programs. Firstly you obviously make more money from each initial sale. A commission of $500 is much better than a $50 commission, for example. It would be much easier to make a living from the higher value product given a couple of monthly sales, than 2 sales of the lower value product. $1000 a month versus $100 a month. (Ignoring the back end sales and membership commissions).
Scaling a high ticket affiliate program is also much easier. This is because you can spend more on advertising and testing and measuring. With the lower value item your markup is relatively low. If you spend $100 on advertising and only make 4 sales (of $50 each), with the low ticket item you only make $100. (Profit minus advertising costs).($50 x 4= $200 profit – $100 advertising costs = $100) . With the high ticket item you make $1900. (Your profit minus your advertising budget). 4 x $500 = $2000 profit – $100 advertising costs = $1900.
Testing and Measuring Advertising
Clearly then it is much better to sell higher ticket items because the profit margin is much greater. This means there is flexibility for testing advertising to find a profitable model. If you need to spend $400, for example, on advertising before you find a profitable model, the higher ticket items leave more room for this. With the lower ticket item, you will be in a deficit of -$300 in the above example ($100 – $400). With the high ticket item you will still be in profit of $1500 ($1900 – $400 advertising spend).
High Commission Affiliate Programs – Scaling
Scaling your business to sell 100 products a month can be achieved with affiliate products. Firstly they can be automatically downloaded and sold without you being personally present. Automation means scaling is simply a matter of getting more people through your sales funnel. See done for you sales funnel. Lets compare the two models again and use the examples of a $100 commission and a $500 commission.
Scaling a $100 commission up to sell 100 products a month would mean a turnover of $10,000 a month (leaving advertising costs aside). The same amount of sales of the higher ticket product would mean you could earn $50,000 in commissions given the same amount of sales in a month. So just for choosing the higher value items to sell, you earn 5 times as much in commissions, in this example. With high commission affiliate back-end sales (or up-selling) and monthly membership sales you can also earn a lot more on top of this too.