What's a reasonable affiliate link pricing?
Have any of you worked with partners who link out to your site in return for a cut of the profit? What % pricing usually makes most sense for both parties to have a fair exchange?
Have any of you worked with partners who link out to your site in return for a cut of the profit? What % pricing usually makes most sense for both parties to have a fair exchange?
% profit might not be the best way to look at this at it varies tremendously. You should actual base your affiliate prices on your average customer value and make sure that your upfront payout is less than that. You want to bump up the upfront payout as much as you can (sustainably) to attract top quality affiliates.
Obviously for something like this the risk is largely on the affiliate since they basically fund your entire marketing and sales campaigns and only get paid when a customer buys your product. Big risk, especially when working with an early product and basically all upside for the product owner. In that sense you want to make the upfront payment worth it for them ($50-250 is very attractive depending on the target market).
I also warn against RevShare affiliates at this point in time tend to be lower quality. Revshare is basically recurring % cut of profit month over month. No only do most affiliates not play this game (trust issues), but you don’t want to either.
The name of the game with SAAS is making money on the backend and making your huge margins (a lot of the time up to 90% margins) work for you. In that sense, you give up the upfront payment you receive from the customer and make all your money in backend recurring revenue (of which the affiliate doesn’t get any).
Tons of SAAS companies have exploded using this method and I’m actually working on a pilot test for GitHustle projects as we speak. I’ve partnered with a very successful affiliate team and we’re looking for more promising SAAS products to help grow. The partner currently makes about $700,000 MRR as a two person team and wants to expand to GitHustle projects. This offer doesn’t come too often for bootstrapped SAAS, especially with a veteran taking some risks with early stage companies. I want to capitalize on that and help some IndieHackers really scale up their operation.
I really think we could ramp you up quickly so if you think your servers are ready for it, then either post on http://www.githustle.com and I’ll reach out or email me at Julian@githustle.com
It's all over the place. The ones I've done have almost all been for subscription SaaS, platforms or membership sites and in most cases they paid me a bit more than they'd earn in one month from a customer or a flat 10- 20% of lifetime revenue.
For one-off info products, the marketer often takes 30-70%, depending on their list size and the differentiation of the product.
A one-off charge for a link or a shoutout is much more speculative and really depends on the affiliate's audience.
How much would be you be willing to pay Google to send a customer ( not a lead ) your way?
Is it typical/useful to compare the affiliate price to the price of advertising? Should the affiliate pricing be higher/lower?
Affiliate pricing should cost you less or equal to the average cost you'll pay for a sale. Why? Because affiliate relationships may require more handholding and traditionally will be less reliable.