This transcript was generated from the episode audio and may contain minor errors.
[Music]
How much can you get paid to promote other people's products? A listener wants to know about the average rates or affiliate commissions. Welcome, welcome, welcome to Side Hustle School. My name's Chris Guillebeau. So glad you're out there on this Thanksgiving week.
It is U.S. Thanksgiving coming up tomorrow. Canadians get it a little bit early, a few weeks ago in fact. And of course we have a global audience as well. But in my part of the world at least, it is Thanksgiving and I am thankful for you.
I'm thankful for lots of things, but especially for our amazing community of folks who are all trying to advance themselves and do something interesting, make extra money, perhaps build a bridge away from a day job or some other goal. But we're all united in that goal of starting or growing a new source of income. That's what it's about. So as noted, we're gonna talk about affiliate commission rates specifically today. We're gonna hear from Morgan in Arizona.
Morgan has taken the Cytosle plunge by starting a tech review blog. But they're wondering about affiliate marketing, how much can you actually get paid? Does it vary by category? In fact, it does. I'm gonna tell you specifically what the percentages are.
So if you're new to affiliate marketing or if you're interested in exploring that world, this is gonna help. It will all be short, action packed as always, detailed question and my answer after this quick message from our sponsor. [Music]
Hey Chris, it's Morgan from Flagstaff, Arizona. So I started a tech review blog during the pandemic as a hobby inspired by the $100 startup and a few other side hustlers I know. As I explore ways to monetize, affiliate marketing seems promising, but I'm in the dark about the typical commission structures.
How much can one expect in commissions for product referrals? And do you have any advice on brokering favorable terms with companies? [Music]
Morgan, happy to help with this. This is something I know a good bit about having done a fair amount of affiliate marketing in the past, not doing a lot these days, but I had several businesses that were doing affiliate marketing primarily for a number of years. So the commission structure is gonna vary quite a bit depending on the industry, the company, the product or the category.
But here are some general benchmarks, okay? So for digital products, this is probably gonna be your best bet. Products like eBooks, courses and software, you're gonna often see much higher commissions. They can be 10 to 30% for some subscription products, especially SaaS products, software as a service, up to about 50%. 50% in fact is the norm for joint ventures when there are internet marketers and people offering courses for a limited time and it's a big launch and people are emailing about it.
That's typically a 50% split. So that can be very significant for some of these higher price courses. Now for physical products, that's gonna be much lower. For most physical goods, it's gonna be 3% to 18%. So maybe even let's say six to 9% is the common range and it can be higher or lower in some cases.
But if you just think 6%, that can be a typical Amazon commission for products that you're referring people to on Amazon. Now you might say, well, why should I bother referring something for 6% when I can get 50%? Well, it's not the same product, that's the big thing. It might be easier to refer sales to Amazon for a specific product. People know how Amazon works, they're very comfortable shopping there or it could be another retailer as well, doesn't have to be Amazon.
The point is the sale might be easier. You might have to do some more work for that digital product referral or you might not in some cases. So that's why it can be a really good business. It just depends. And then also to note with subscriptions, those are of course recurring.
So in terms of affiliate commissions, they either offer a flat fee per signup or a recurring revenue share, naturally the recurring revenue share is gonna be better and more desirable. That's what you want. You wanna be able to refer somebody who is a customer for life for at least a long time and you keep earning on that. That is the ideal. Now for the second part of the question on negotiating favorable terms.
So I would say for the most part, good luck with that. For the most part, it's gonna be like, here's our program, you sign up, we pay you this rate that we pay everybody else. It's kind of a take it or leave it thing. That said, two things. Number one, be direct and reach out to the affiliate manager.
Just having a one-on-one relationship can sometimes yield better terms than simply signing up. So you might as well develop a relationship. And then long-term, the biggest thing that's gonna make a difference in your leverage is if you can deliver large volumes of traffic or sales. So there, you might wanna ask for a tiered commission rate where your percentage increases as you hit certain thresholds. And sometimes those programs are already set up that way.
So that's ideal. But that's what you do about that. If you can actually refer a lot of sales, then that can help you. But either way, you might as well be direct and reach out to the affiliate manager to see what you can get. So hopefully that's helpful.
Some ranges in terms of what you can get paid can be a great business for lots of people. We've had a number of successful case studies looking at this in some detail. So be sure to check those out in the archives if you're interested. And whatever you're interested in, thanks for being out there today. I really appreciate you.
You're amazing. We got Thanksgiving here tomorrow in the US. Of course, there'll be an episode and one the day after that. Special Black Friday episode. Everything is discounted.
Everything is in fact free the way it always has been, but we'll try to discount it even further. I have to work on that. New episode every day. For now, I'm signing off. My name's Chris Guillebeau.
This is Side Hustle School. [Music]
From the Onward Project.
