For an advertiser with a huge e-shop where hundreds or even thousands of products are provided it is certainly more difficult to set up such commission as would be commensurate with both its and publisher´s ideas.
Not losing money and at the same time providing an interesting publisher reward really pose a challenge and setting a single area-wide commission seems impossible to the advertiser. This makes the advertiser uncertain, which leads to a loss of interest in co-operation, and hence in the opportunity to move its e-shop forward. The advertiser cannot find another way of setting the proper commission and in working pace it passes up the chance to get yet another marketing channel that brings customers to the shop.
Tell me how I shall set a single commission when I have so differently priced products …
Why this is the case? Where´s a problem?
An advertiser has products where it has a margin set so that it can provide, for example, a 20% commission and in the event of sale it would still be profit-making, On other products it would be lose-making in sale if it indicated an even 1% off the net price. Clearly, margin on a luxury camera is different from that on a cell phone charger, and therfore there´s also a different room for reward within cooperation
Thus how to set a single area-wide commission? Is it possible at all?
It´s possible. The visit rate that an affiliate campaign brings to an e-shop is roughly the same as the overall visit rate of the e-shop. The room for commission can therefore be redirected by overall sales and accordingly determine a single commission. Obviously, on some products it will turn out to be at the edge of covering the cost of product sale, while on other ones that same commission will generate a higher profit.
What can help?
It is very good to write down statistics from other marketing campaigns such as PPC, from this evaluating the saleability on which it´s also possible to build in case that an affiliate campaign commission is determined. An advertiser does not need to worry about losing money. Cooperation is still set in CPA style, thus it only pays for an action – conversion – sale. It pays nothing extra but a real sale.
Secondary profit nobody reckons with
Another thing is that everybody forgets about what affiliate offers except for an immediate profit. An advertiser wins over new customers who will come back to the shop and buy again. Though this time they will not go seaching in a trial-and-error style. They will know exactly where they have purchased and go to the shop dirtectly, outside a campaign. Not to mention making references and gradual dissemination of shopping satisfaction among their acquaintances.
What does it suggest?
To sum it up, while determining an affiliate marketing campaign, an advertiser should think about where the room for average profit stands and at the same time think of the fact that by way of the commission it does not pay just the current action but also the follow-up processes. One of them is also the long-term interest of a client who´s become aware of the campaign just thanks to the affiliate campaign.
