Pay Per Sale Affiliate Programs – Still the Best Option for Advertisers?

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Pay Per Sale Affiliate Programs – Still the Best Option for Advertisers?

Pay per sale affiliate programs have been around since the beginning of the affiliate marketing business, and due to it’s obvious fairness, it is still a popular commission model. The number of programs offering this commission model are plenty, far more than any other model available online.

The reasons for its popularity are many, but a big reason is advertisers full control over the margins. With any other commission mode, the advertiser needs to calculate the conversion ratio, number of sales and size of purchases very carefully to eliminate the risk of overpaying for clicks, leads or impressions. With the PPS model, advertisers know they will only pay a specific percentage of each sale, making every new affiliate – no matter how successful – will contribute to the revenue of the affiliate program.

Advertisers using other commission models stand a much greater risk of having a new affiliate join, only to see him send nothing but non-converting traffic, thus getting paid for nothing. PPC, PPL and PPM are also much more open for fraud, often in the form of auto-generated visitors (i.e. from a script) or other ways of generating impression, clicks or in some cases even leads. For newly started affiliate programs, showing limited cash flow, other commission models can prove hard in the beginning. Often it takes a while to get the ball rolling, and paying for anything but sales can cost a bit of money before you get some back. Be sure to calculate how long you can afford to pay for a certain amount of visitors if no one actually converts into a buying visitor.

There will of course be plenty of referred visitors who converts into sales, but there are no guarantees. If you where to use a PPS model, paying ONLY For sales, you would never have to pay a commission unless you are seeing a positive cash flow. This is true for the affiliate program as a whole, as well as on an individual affiliate level. They won’t get paid until they actually makes a sale, thus making the advertiser money in the process.

Some affiliate programs offer a fixed commission instead of a percentage, and if the commission is the same on sales for different amounts, the percentage will differ from one sale to another. Try to find an approximate percentage of commission to calculate the expected revenue for each affiliate sale. Calculating the minimum and maximum revenue is important as well, in order to keep track of the revenue of the affiliate program and its commission model.

Article written by Theo Swan.

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