There are a few key factors that come into play when you’re looking for the right affiliate program. You want to make sure to seriously consider these before building out an affiliate website, as you will put in a lot of groundwork up front and you want it to pay off. Jump into an affiliate program too fast, and you might find out the hard way that the market you chose doesn’t pay out what you expected. The most important factors to look for are big ticket items, recurring commissions, up and coming industries, high volume items, high commission levels, and low to moderate competition. Most of the time you will be considering a combination of a few of these factors, but for now we’re going to take a look at each of them on their own. All of the affiliate programs that we suggest fall into one or more of these factor groups.
- Big Ticket Items: The logic here is pretty simple, you can build an affiliate website around an item with a low price tag (let’s say kitchen utensils) and receive a 10% commission on each item or you can choose a high price item (yachts for example) and take a 10% commission on each of those. Each item and distributer of those items will offer you a different commission structure, but for now assume it’s level across the board. A lot of people want to market a product that they know really well or find extremely interesting. The purpose of this website is to direct you towards items that pay you very well, I guarantee you will find them interesting when they start making you money. You may have to do some research to learn about a big ticket item that you know less about, the higher profitability of these items will make that effort pay off in the long term. You will also find that commission rates and competition in a market don’t always correlate with the price of item. If an item is cheap and you know a lot about it, chances are that other people do to and you will find a lot competition to market that item.
- Recurring Commissions: Some of my favorite affiliate programs have a recurring commission structure. The concept is simple, get someone to sign up for a service/platform and every time they use that service you receive an affiliate commission. A lot of online casinos use this structure, it’s also used by Daily Fantasy Sports companies like DraftKings and FanDuel. DraftKings, for example, pays you a percentage of the entry fee for every contest a player enters for the lifetime of that player if you refer them to sign up. Because of how lucrative this structure is it can also be highly competitive. It is important to note that just because an affiliate program is competitive does not mean that you can’t succeed in it. I have never been first or anywhere near first to market for any given affiliate program, but I have found ways to out compete my competitors. Whether you top your rivals in SEO, bring new and useful information to potential referral targets, or take any number of other angles, there is always a way to win in affiliate marketing. And when it comes in a market with a recurring commission structure it really pays off.
- Up and Coming Industries: As an affiliate marketer, this is something that you always keep your eye out for. If an industry is relatively new and has some momentum, you can get in early and establish yourself in low competition environment. There is a trade off here, when a company/market hasn’t been established, there’s no guarantee that it ever will be. Fortunately, with a little bit of experience you naturally develop an eye for which companies/products work and which don’t. You can also diversify by marketing for multiple companies/products in the same industry. Just make sure that you design a website that is industry specific as opposed to company/product specific. A little diversification goes a long way, if one of these companies/products goes out of business you won’t take much of a hit if any. Not too long ago Daily Fantasy Sports and Ridesharing (Uber and Lyft) fell into the Up and Coming Industries category. For DFS this was a great opportunity to get into the a recurring commission structure while it wasn’t all that competitive. For Lyft and Uber (moderate competition) it’s still an opportunity to make huge commissions on each driver you refer. You must be a rideshare driver to refer new drivers for Lyft an Uber, but this tiny barrier to entry weeds out a ton of competition.
- High Commission Rates: You want to target the affiliate programs that give you the largest slice of the pie. A large commission on a medium price item or high volume item can sometimes be more lucrative than a low commission on a very high price item. Certain industries are known for their high commission rates, these tend to be more competitive, but that’s not always the case. A couple industries with very high commission rates are software and supplements. Needless to say, a successful affiliate campaign in one of these markets can be incredibly profitable. There are a couple of other factors that can be addressed with commission rates. These are duration of cookies on affiliate links, and non product specific affiliate links. Some affiliate programs give you an affiliate link with a cookie duration of 30 or 60 days, meaning that if they buy a product through your link within that time period you still get your commission. In this case, a slightly lower commission might still be appealing. Other affiliate programs, such as Amazon, have a much shorter cookie duration (24 hours), but you receive commission on almost any product that someone buys through their online retail space in that period of time.
- Low to Moderate Competition: You are probably thinking, “if not many people are competing in a market it must not be profitable”. That logic holds true some of the time, but there are many exceptions, and we are looking to exploit those exceptions. First of all, low competition doesn’t necessarily mean low volume. Some big ticket items are actually less competitive than lower priced items. Up and coming industries also haven’t been around enough to be flooded with affiliates. The best part about both of these scenarios is that the need for useful information and reviews is much higher. People are going to do a lot more research on high priced items and products/services in young industries before they buy. This makes your role as an affiliate marketer, assuming that you can provide helpful info, much more important.