Understanding Affiliate Pay Structures

Understanding Affiliate Pay Structures

Amazon.com’s associate program is one of the world’s first, largest and most successful programs of it’s kind. Not only did it help build Amazon.com into the company it is today, but it paved the way for others to realize the power of affiliate marketing.

Earning commissions on the sale of a product (Pay Per Sale) is just one way to earn money using affiliate programs. The majority of affiliate programs are broken down into three categories; Pay Per
Lead, Pay Per Sale and Pay Per Click.

 - Pay Per Lead: This is what affiliate marketing is all about, being paid for an action. Most programs fall into this category as it means being compensated for an action taking place on the advertisers site. This can be anything from taking a survey, or filling out a form request a free trial.
There is no set range for commissions in the cost per action (CPA) market. You will see email submit offers pay out in the $1-$2 range, while there are much higher program like weight loss trials (with credit card submit), that pay in the $40-$60 action range.

- Pay Per Sale: Much like Cost Per Action, but more targeted towards sales and purchases. A Cost Per Sale method of advertising usually pays a set price, or a percentage of final purchase. Amazon.com’s associate program can be considered Cost Per Sale, as you will only earn a percentage (commission) on every purchase referred to their site.

- Pay Per Click: The majority of affiliate programs are running on a Per Per Lead or Pay Per Sale structure. Programs using a Pay Per Click method, are paying affiliates based on the number of clicks they generate for an advertiser regardless of sale. You won’t find as many affiliate programs using a Pay Per Click model, as it leaves the door open for fraudulent activity and lower conversions on final sales.