How much should I pay affiliates?

[jhusband]

I have a small group of affiliates lined up to represent a low volume consumable product that retails for 29.99

When I sell it myself my PPC cost per sale is $13 and I make a profit of $9 per unit sold. I'm wondering given these numbers what would you all reccommend I give my affiliates as a commission? I currently offer them $10. Which they seem to think it fine. But I'm wondering if it should be more.

The many are smarter than the one. So your responces are appreciated.

You can see my (yuck) website at www.lowmilksupply.com

-John

[bhartzer]

$10 sounds rather generous. I would say that even 25 percent for the affiliate would be more than enough.

If you haven't already, you need to figure out your total cost, which would include all the website costs, affiliate program costs, cost of the product, etc. to figure out what it really costs you. And then figure out whether paying affiliates that amount per sale would continue to be profitable for you.

[Cedric]

I'm going to disagree with Bill.

You should pay affiliates what you believe is a fair price AND with a "low volume consumable," you have to pay more to make it worthwhile for affiliates to promote.

That said, if your affiliates are happy, leave it alone. ;)

[Chris - WSO]

Conversion...

If you sell a product which converts once in every blue moon, then you need higher commission than you would if it was a faster convertor.

On top of that what are the competition offering, no point offering $10, if the other companies are offering $15 for the same product on the same conversion

Cheers

Chris

[Karen Hudgins]

Personally, I would pay them as much as you can. Take the suggestions and find your break even point. Be as generous as possible and offer bonus/incentive programs.

[scallihan]

Originally Posted by jhusband

I have a small group of affiliates lined up to represent a low volume consumable product that retails for 29.99

When I sell it myself my PPC cost per sale is $13 and I make a profit of $9 per unit sold. I'm wondering given these numbers what would you all reccommend I give my affiliates as a commission? I currently offer them $10. Which they seem to think it fine. But I'm wondering if it should be more.

The many are smarter than the one. So your responces are appreciated.

You can see my (yuck) website at www.lowmilksupply.com

-John

Question of finding the point, if it can be reached, where it works the best for both you and your affiliates. If you have a strong core of affiliates making good money while creating profits for you, then everyone should be happy.

[bhartzer]

You definitely need to pay as much as you can affort to pay. The only proper way to do that is to figure out how much you can afford to pay by finding your price points, calculating how much it costs you to get a sale, what your average conversion rate is, and what it costs you to "produce the product".

There are more things to calculate than that including the cost of doing business, allowing for chargebacks, fraud, returns, paying your rent, etc., and only you can decide how much your business can afford to pay an affiliate.

Too many online businesses fail, in my opinion, because they don't take into account the real cost of doing business and how much they can afford to pay affiliates. They also fail when they decide how much they're willing to spend on a PPC campaign, but that's another story altogether.