You’re thinking about affiliate marketing and how it can help you earn money online, right?
That’s a complicated question that has many variables to consider.
One of these variables are affiliate commission rates.
What’s beautiful about affiliate commissions is that the customers don’t pay more for purchasing products through affiliate links.
The commissions are paid out of the company’s cut of the revenue.
That’s why you’re greatly helping content creators when you buy products through their affiliate links at no extra cost to you.
Products that you would purchase anyway.
Now that we’re done with subtle hints, let’s carry on with the article and define some terms.
What are affiliate commissions?
To define affiliate commissions, we have to first define affiliate marketing in general.
Affiliate marketing is the process of promoting someone else’s product in return for a percentage of the sales, aka a commission.
For example, you’re a fitness nut who also runs a fitness blog.
You have an audience who follows your blog and reads your content.
People’s attention is a very valuable commodity in today’s world.
What brings together content creators such as yourself and companies that are looking to profit from their audiences is affiliate marketing.
Basically, you register for an affiliate program at the company whose products you want to promote and each time a sale happens through affiliate links, you earn an affiliate commission.
Note the difference between the “affiliate program” and “affiliate network.”
Affiliate programs revolve around a single product or a product line of a single company and are run by companies themselves.
Affiliate networks are dedicated services that serve as sort of a middleman between affiliates and companies.
They take it upon themselves to manage the entire process of running the affiliate programs and taking care of the relationship between the affiliate and the company selling the product.
The company still has to sell the products and go through the fulfillment process, however.
Do you have to pay to become an affiliate?
Typically, no.
Companies are glad to have affiliates.
Having affiliates means they can forego their marketing costs of the sales that happen through the affiliates since they don’t pay anything upfront.
They only pay once the sale happens.
You can see how that’s a good deal for the company.
Creating content and promoting it takes a lot of resources.
A company can either staff an entire marketing team as well as a content creation team, or it can simply leave that up to third party marketers and content creators for a set commission.
It’s important to mention that some affiliate networks or programs do have certain requirements to join.
Those requirements have more to do with how big of an audience an affiliate has and how reputable they are.
Companies usually don’t ask for money to allow you to join.
Nor should you join any affiliate program that’s charging money for joining.
That reeks of scam.
When do you get paid a commission?
As mentioned above, you get paid a commission when you make a sale.
Companies know exactly where any sale is coming from thanks to affiliate links that are unique to each affiliate.
Each time a customer clicks on your affiliate link, a cookie is placed on their device.
From that point on, this customer is assigned to you and you get a commission for any purchase they make.
Some affiliate programs allow for cookies to remain on the customer’s device for a certain amount of time or until manual deletion.
This means you can earn a commission even if that customer doesn’t make a purchase that very session, but comes back at a later point and buys the product then.
How long the cookie lasts is defined by the affiliate program.
Sometimes it’s 24 hours, other times it’s 3 months or longer.
In most cases, if the customer returns to the website through someone else’s affiliate link and buys something, you do not get credited for that sale.
There are exceptions to this where the company pays both affiliates, but this is rare.
Some companies pay commissions for leads or sign-ups too.
As you can see, there are variations to the theme so it’s important to read through the affiliate program terms before joining.
What is the highest paying affiliate program?
This is a frequently asked question, that is, in my opinion, misguided.
We all want to earn the highest amount of money possible for any single sale, but it’s more complicated than that.
Since, in most cases, you get paid a percentage of the sale, the amount can vary a lot.
For example, you could be promoting a high-ticket mastermind class that costs $10,000 and pays 30% commission rates.
Sell a couple of those and, bam, you made $6,000.
That’s much more than selling a hundred of $10 products that earn you 100% commissions.
You get the point.
I’m certainly not advocating promoting high-ticket $10,000 mastermind classes to novice marketers.
Selling something like that is not easy.
I’m just using that as an example to make a point.
Anyway, moving on…
As I mentioned, some companies pay 100% of the money from sales to their affiliates.
In those cases, the company is valuing customer acquisition more than the sale itself.
Why?
Because the company knows they will sell more stuff to that customer down the line and get back their money.
Then there are subscription-based products that pay recurring commissions for as long as the customer is renewing the subscription.
Say, a customer purchases a piece of software that has a monthly subscription plan.
If the company selling the software opted to pay a cut of the subscription fee, you would be earning money each month for as long as the subscription remained active.
The sale occurs once and you keep getting paid.
That’s a good deal right there.
Another notable difference in affiliate commission rates is between physical and digital products.
Commission rates for digital products are larger than those for physical products.
Generally speaking, of course.
You can imagine what that would be.
Physical products you have to produce, store, and distribute.
Digital products you only have to produce once and then you simply replicate them indefinitely.
The bandwidth required for distributing them is relatively cheap as well.
This is why companies opt-in to give out much larger affiliate commissions for digital products vs. physical products.
Amazon Associates commission rates
I decided to cover Amazon separately because Amazon is a behemoth that cannot be simply lumped into a category.
Amazon’s affiliate program is called Amazon Associates.
Through Amazon Associates, you can earn up to:
- 7% on Fashion, Shoes, and Jewelry products
- 10% on Health and Beauty products
- 8% on Furniture, Home, and Garden products
- 8% on Groceries
- 5% on digital Music and Video products
- 8% on Kindle and Fire Tablet Devices
- 7% on Echo and Fire TV Devices
Those are some of the higher commission rates Amazon pays out.
Here are some of lower rates you may be surprised by:
- 1% for physical copies of video games and game consoles
- 2% for televisions and digital download games
- 3% for computers and computer components
The program itself works as follows.
If a customer lands on Amazon’s website through one of your affiliate links, you earn a percentage of the first transaction that occurs between that customer and Amazon in the next 24 hours.
Meaning, the customer doesn’t even have to buy the initial product they clicked on your website.
A 24-hour cookie is placed on the customer’s device and as long as they buy anything on Amazon in that period, you get a cut.
Of course, if that customer clears their cookies or clicks on someone else’s Amazon affiliate link after they clicked on yours, you don’t get rewarded.
I’m not too crazy about the Amazon Associates program because of the 24-hour cookie policy that should be longer and the draconic domain-wide bans for even the smallest transgressions.
Not to mention they don’t accept fresh websites.
Your website has to be reputable and has a decent amount of content on it to be considered.
But Amazon sells everything under the Sun and is trusted by everyone so their affiliate program is used by many marketers worldwide.
If you decide to go with Amazon Associates, be extra careful when it comes to following rules.
Affiliate commissions for physical products
Amazon isn’t the only place that offers affiliate commissions for physical goods.
Far from it.
Affiliate marketing is so wide-spread, chances are that all of your favorite brands have affiliate programs of their own.
Companies selling clothes, furniture, tools, electronics, gardening supplies… you name it, there’s an affiliate program for it.
There are entire affiliate networks dedicated to affiliate programs for physical products.
What is a good affiliate commission rate for physical products?
Let’s face it, on average, you will never see affiliate commissions for physical products as high as those for digital products.
Apart from that, the commission rates depend on the industry too.
Some industries can afford higher commission rates than others.
Notably, the health industry.
It’s not unheard of to see commission rates on some health supplements that go as high as 30-50%.
The highest commissions are usually given out by smaller companies that make higher commissions a part of their marketing efforts.
Meaning, they know that if they give out higher commissions more marketers will promote their products, thus increasing sales.
Those products are often over-priced and gimmicky, however.
Not to name names, but such products usually promise unrealistic, to say the least, weight loss or other health improvements.
You know exactly what I’m talking about.
Maybe you’ve even bought some of them at one point or another.
Don’t be too harsh on yourself.
A lot of us have.
It’s no surprise companies take advantage of that kind of behavior.
Anyway, let’s cover some of the popular industries and see what kind of commission rates they offer.
Affiliate commission rates for electronics and related industries
I was expecting higher commission rates in the electronics and related industries.
10% rates are considered high in this industry.
Such programs can be found, but they are rare.
They usually come from smaller companies that are a bit freer with their resource allocation.
On average, commission rates in this industry run from 2-4%.
Industry leaders such as Samsung, for example, offer commission rates in the 2-4% range.
Microsoft gives out 2% for their Surface and Accessories, and Xbox Consoles and Accessories.
Corsair, one of the biggest computer parts manufacturer, only offers commission rates from 1-1.8%.
Their competitors, Razer, offer 3% commission rates for their peripherals and 10% for the Respawn line of products (mental performance booster drink).
Alienware is a bit more generous with their 6% commission rates.
Nvidia is relatively stingy with their 2% rates.
And so on…
If I had to guess, I’d say the electronics industry hasn’t yet tapped into affiliate marketing like some other industries.
The rates will probably go up over time as affiliate marketing takes bigger foothold within the digital marketing world as a whole.
Affiliate commission rates for books
Affiliate commission rates for books aren’t the highest, which is understandable.
Still, they’re as high as or higher than those of the electronics industry.
Especially when it comes to audiobooks and digital books.
The biggest player in the industry, Amazon, expectedly has among the lowest commission rates.
Amazon offers 4.5% commission rates for the physical books.
Barns and Noble are losing the war to Amazon even when it comes to commission rates.
They only offer 2% rates.
Smaller services that offer digital books go much higher than that.
eBook.com, as the leading digital bookstore, offers 8% rates paired up with the generous 45-day cookie length policy.
If you’re in the children’s books niche, definitely take advantage of the 10% commission rates offered by Bookroo.
Bookroo’s cookies are encoded to last 90 days on the customer’s device, which is generous.
AudiobooksNow offers 10% commission rates on their selection of over 80,000 audiobooks with the 15-30-day cookie policy.
Interestingly, Audible only offers flat fees as commissions.
They offer:
- $10,00 for Audible Gold Digital Membership
- $5,00 for Audible Free Trial Digital Membership
- $0,50 for any given Audible Audiobook
Affiliate commission rates for outdoor gear
The vast countrysides and wilderness of our plant spawned a great many sports, activities, and hobbies.
Which then created a market for the huge industry of outdoor gear.
To no one’s surprise, brands and retailers in this industry take advantage of affiliate marketing as well.
The commission rates in this industry are comparable to the commission rates in any other industry that deals with physical products.
They’re not wild, but they go up to the respectable 10% mark.
Backcountry retail shop, for example, offers a solid 8% rate with the 30-day cookie policy.
Bass Pro Shops, that sell a lot more than just fishing gear, offer a bit more modest rates of 5% with the 14-day cookie policy.
Identical to Bass Pro Shops, Orvis also offers 5% rates with the 14-day cookie policy.
Camping World, the RV industry leader, offers 6% rates with the 10-day cookie policy.
Affiliate commission rates for fitness gear
Health and fitness industry is huge.
There’s a big demand for fitness gear.
If you go to the gym you have to be decked out in fitness gear to look the part, right?
Wrong… but let’s not go into that right now.
Anyway, fitness brands and retailers also dipped their toes into the affiliate marketing waters.
Their commission rates go from 2-10% or so.
Fitbit offers a modest 3% rate on its product line, for example.
Life Fitness offers a respectable 8% rate with the fair 30-day cookie policy.
With identical rates and cookie policy, Horizon Fitness is another major player in this industry.
With above-average commission rates of 10% and 30-day cookie policy, Lifeline Fitness is another big draw for affiliate marketers
Affiliate commissions for digital products
Generally speaking, affiliate commissions for digital products tower over the ones for physical products.
Not to mention recurring billing commission rates that reward the affiliate for as long as the customer keeps paying for a subscription.
For example, you can turn a 30% cut of the $30 monthly subscription into over $100 if the customer stays with the service for a year.
Pretty neat, right?
This is made possible by the fact that digital products are infinitely reproducible and easily distributed, increasing the profit margins.
Which allows companies to increase commission rates.
Thus, making them very appealing to affiliate marketers.
Typically, you will see rates ranging from 2% all the way to 70-80%.
In some cases even more than that.
What is a good affiliate commission rate for digital products?
Honestly, I would call any commission rate for digital products in the range of 20-30% decent.
30-50% rates are considered good to very good.
The above 50% rates are considered excellent.
There are, of course, diminishing returns when it comes to extremely high commission rates.
For a company to be paying the affiliate as much or even more than they are earning from the sale, something has to give in.
And that’s usually the “bang for the buck” ratio.
In other words, the product is usually overpriced.
So don’t be too crazy about extremely high commission rates because it’s much harder to sell overpriced products than those that are fairly priced.
Generally speaking, no one likes to overpay for stuff.
It’s important to know that the digital giants of our world are at the lower end of the commission rates spectrum.
Let’s go through a couple of such examples.
Microsoft is a bit more generous with their software commission rates than their hardware commission rates, but they still lag behind the industry standards.
Microsoft offers as follows:
- 7% for both 1st and 3rd party Xbox Games
- $10,00 flat for Office 365 Annual Subscriptions
- $5,00 flat for Office 365 monthly Subscriptions
- 7% for Movies and TV
- 2% for Apps and In-App Purchases
Apple’s affiliate program is much like Amazon’s.
Their cookies are encoded to only last for 24 hours on the customer’s device so you’re only eligible for a commission if a sale occurs in that time period.
Apple offers the following commission rates:
- 7% for Movies, TV, and Books
- 2.5% commission rates for iTunes Music
- One-time 100% commission on the first month of customer’s subscription to Apple Music (cookie time extended to 30 days for this program)
The meat and potatoes are smaller companies that offer targeted software solutions like web-hosting, email autoresponders, and countless other SAAS solutions.
Smaller in comparison to Microsoft and Apple, that is.
We’re still talking about very reputable companies that are doing very well for themselves.
Let’s paint the picture with some examples.
Affiliate commissions for web-hosting services
There are over 1.5 billion websites on the World Wide Web today.
Out of these, around 200 million are active.
And they all need hosting, don’t they?
Needless to say, web-hosting is a huge industry with a huge market.
So huge that it’s projected to reach a whopping $216 billion by 2025.
Let’s stop using the word huge, shall we?
As you can imagine, web-hosting companies have large marketing budgets.
A good portion of those budgets goes directly to affiliate marketing.
Why not take advantage of that?
Let’s start with my favorite web hosting company that I use and like – A2 Hosting.
A2 Hosting offers $85 for every sale with the 90-day cookie policy.
If you think $85 for every sale is good, check this out.
A2 Hosting also offers insane bonuses, increasing the worth of every sale if you exceed a certain number of sales per month:
- 1-10 sales/month: your every sale is worth $85
- 11-20 sales/month: your every sale is worth $100
- 21-30 sales/month: your every sale is worth $120
- 31+ sales/month: your every sale is worth $140
So, selling 31 A2 Hosting web hosting packages can earn you $4340.
Another popular web hosting company is Bluehost.
Similarly to A2 Hosting, Bluehost pays commissions in the range of $65-120, depending on the number of sales made per month.
Not too shabby.
Hostgator is another name you may have heard of in this business.
They also offer an escalating commission value model that rewards you as you manage to get more and more conversions per month.
The bottom commission is $50 for up to 5 conversions and the top is $125 for referring over 20 sales per month.
How can web hosting companies afford to offer such large commissions?
Well, the math for them is simple.
Every customer that signs up with them usually stays with the company for years.
People simply don’t change web hosting companies too often.
Affiliate commissions for email autoresponders
Email marketing is a huge part of digital marketing as a whole.
Everyone’s goal is to collect as many emails from their customers as possible.
Why?
Because having your customer’s email means you have direct access to them.
Where do email autoresponder solutions come in?
Well, they make this whole process much easier.
For instance, imagine sending thousands of emails manually, one email at a time.
Having an email autoresponder enables you to do all that work instantaneously, with a click of a mouse.
You can imagine why companies and individuals that deal with large numbers of emails are willing to pay monthly subscriptions for email autoresponders.
Email autoresponders come in many shapes and sizes, with different features.
The one that I use and like the most is AWeber.
AWeber offers recurring 30% commissions.
As I already mentioned in this article, recurring commissions mean you’re getting a percentage of every monthly subscription for as long as the subscription is active.
And just like web hosting, people don’t often change autoresponders either.
Meaning, you could be making recurring commissions for a customer you referred to AWeber every month for years after the initial sale happened.
Another well-known name in the email autoresponder world is GetResponse.
It’s a fine solution, liked by many.
With GetResponse, you can choose between a one-off $100 for every sale, or a recurring monthly commission of 33%.
A good deal either way.
Mailigen is another fine email autoresponder solution that rewards its affiliates with a $50 commission per sale and a $2 commission for every free trial sign-up.
Their cookie is encoded to last for 120 days.
Web hosting services and email autoresponders are just a couple of examples of digital products.
There are thousands of other digital products and solutions that guarantee hefty commission rates.
I could name many more examples from the Health and Fitness, or Finance industries, for example, but I think that’s not necessary.
Conclusion
Can you make money with affiliate marketing?
One thing is clear.
The answer to this question is a resounding YES.
Companies across most industries legitimized affiliate marketing by adding it to their marketing efforts.
Is affiliate marketing easy?
No.
It takes time and effort.
Learn and employ the best practices, but steer clear from the promises of fast and easy money.
There’s no such thing.
No secret method or shortcut can substitute hard work.
Now that we’ve established these things, I’d like to express my opinion that the value of commission rates shouldn’t affect your choice of what niche to commit to.
Your interests and passions will play a much larger role in your eventual success than the values of commission rates.
Or most other things for that matter.