Affiliate Revenue Models: Importance, How It Works, And Types

Affiliate revenue model refers to the process of how affiliate marketers generate revenue and continue their businesses. Business owners use the platforms where the affiliates are most active to promote their products and pay them an amount in return for the results. Now, the criteria for paying this commission are not always the same. In different affiliate revenue models, various criteria are specified.

Why Is Affiliate Revenue Model Important For Affiliate Marketers?

An affiliate marketer plays a vital role by bridging a business’s target customers with their built product. These affiliate marketers directly introduce the products to their audience, which are the company’s direct customers; however, the company may not be able to reach this audience directly without the help of these affiliates. The company simply uses the reach of the affiliate marketers to sell more.

Affiliate marketers need to adhere to a revenue model so that they can strategize their activities and maximize their income in one go. A model also helps the marketer be more focused and put all their efforts and resources in one place instead of distributing them. 

Read: What is Affiliate Marketing?

How Do Affiliate Revenue Model Work?

Affiliate revenue models decide when a business has to pay an affiliate marketer. In simpler words, these models determine whether the commission will be one-time or ongoing (recurring). These models also determine the factors behind the commission, such as whether the affiliates will be paid on a per-lead or per-click basis or only after a customer transacts.

4 Most Popular Affiliate Revenue Model

Check out the most popular affiliate revenue models of the present time:

1. Flat Rate Commissions

Flat rate means fixed rate—here, the affiliate marketers receive a fixed commission on each sale the company makes through their specific affiliate link. The commission rate will be fixed, no matter the purchase value.

This is an excellent revenue model for entry-level affiliate marketers who are unsure about their campaigns’ performance. It ensures a certain percentage of commission no matter what.

2. Percentage Commissions

This is one of the most popular variable commission models for affiliate marketers. Here, the payment is proportionate to the purchase value. In this revenue model, affiliate marketers receive a certain percentage of the total amount a customer spends on the business owner’s website as a commission. So, the higher the value a customer spends on their purchase, the higher your commission will be.

For this revenue model, an affiliate marketer has to influence the audience to make bigger purchases to increase the commission. It is also a nice model; however, if your audience makes a small value purchase, your commission will be negligible – this is the only risk associated with this affiliate revenue model.

3. Tiered Commissions

In this affiliate revenue model, the marketers get commissions for each activity of their audience. The company pays the affiliates for each increased activity their website receives through a specific affiliate link.

In case, one user clicks one affiliate link, visits the site, and leaves, the affiliate marketer will get some commission. If another user clicks the link, visits the site, browses some pages, and then leaves, the marketer will receive some commission. Similarly, the affiliate marketer will earn a commission when a user visits the site and purchases. It is a way to encourage the affiliates to be more active and consistent and refer more.

4. Subscriptions

Here, the affiliate marketers will get paid for bringing a source of recurring income to the business. For this, an affiliate marketer has to promote the product very convincingly and denote its usefulness to the audience.

It is a source of long-term income not just for the businesses, but also for the affiliates – the longer the customer continues the subscription, the longer the marketer will receive some commission. Yes, this model comes with a specific percentage of commission each month.

Pro tip: You must select the affiliate revenue model based on your strengths and core expertise. You can later switch to a different model if you find something is not working in the previous one.

How Can Affiliates Find Businesses To Promote Their Products?

Affiliates are always actively seeking business to keep their income steady. They have to approach different businesses for promotional activities. Alternatively, business owners can reach out to affiliates when they find that an affiliate has deep knowledge of the niche/product they have developed or if they have excellent content in that niche where their audience interacts a lot.

Here is what affiliates can do to be visible to the business owners:

Search Engines

Business owners first search for affiliates through search engines; that’s why you need to optimize your sites and the content of all the pages. This will first bring organic traffic to your page. And after some time, your site will be discoverable to business owners and they can contact you for promotions.

Social Media

Social media plays an important role for affiliates, so strengthen your social profiles and specify that you are up for promotion work. Create more connections and upload your previous works to convince business owners. Also, you can share pricing and other details there—it will help anyone from your contact list who is looking for an affiliate marketer to contact you easily. It can also enhance the communication of your social channels and bring more traffic.  

Affiliate Networks

Alternatively, you can sign up for any affiliate network to explore many businesses that are looking for affiliates. You will get marketing support from these networks, too. Also, you can consider PayG affiliate partnership program for a decent income – it takes only a few minutes to join. You can alternatively visit the website of any company that interests you and check whether there is any affiliate program or not and join it.

Also, read: Hostinger Affiliate Program

End Words

As an affiliate marketer, you must stick to a revenue model from the start – it will save you from upcoming hassles. To remain safe from payment frauds, you can add a payment gateway too. Also, in the long term, it helps in creating a unique identity for you as an affiliate among business owners. An affiliate revenue model not just streamlines and strategizes your earning from different promotional activities – but it also smooths the path to getting more projects in the future.