Different Types of Affiliate Payouts/Commission Structures (& Which Is Best?)

If you've taken a gander at the world of affiliate marketing, you might be wondering how the cash rolls in. Well, put on your reading glasses because we’re about to delve into the different types of affiliate marketing payouts.

1. Pay Per Sale (PPS)

Pay Per Sale, also known as Cost Per Sale, is the classic and most common form of affiliate payout. In this setup, you’ll earn a commission when someone makes a purchase through your affiliate link. It's like the cherry on top for the affiliate marketer – cha-ching!

Pros of PPS

  • Typically, higher commissions compared to other models.
  • Wide range of products to promote.

Cons of PPS

  • No payout if the visitor doesn’t complete a purchase.
  • You might need to drive a significant amount of traffic to make decent money.

2. Pay Per Lead (PPL)

Pay Per Lead is more about getting your ducks in a row. In this model, you're paid when a visitor provides their information on the advertiser’s site. This could be signing up for a newsletter, creating an account, or any other lead generation action.

Pros of PPL

  • Easier to get a visitor to complete a lead form than make a purchase.
  • Good for niches where products have a long sales cycle.

Cons of PPL

  • Lead quality matters; poor quality leads might not get you paid.
  • Typically lower payouts compared to PPS.

3. Pay Per Click (PPC)

With Pay Per Click, you’re earning money based on the number of clicks your affiliate link generates. Basically, you're banking on getting eyes on the product, whether or not they buy or sign up for anything.

Pros of PPC

  • Earning is not dependent on sales or leads.
  • Can generate earnings with lower traffic.

Cons of PPC

  • Generally, very low commissions per click.
  • Can be competitive and require savvy marketing skills.

4. Pay Per Call

This one’s a bit of an old school twist. Pay Per Call requires the customer to make a call to the advertiser. If you’re promoting services that need human interaction or are complex, this can be a lucrative option.

Pros of Pay Per Call

  • High payouts due to the high level of customer intent.
  • Less competition compared to other payout models.

Cons of Pay Per Call

  • Might require more convincing to get a user to make a call.
  • Tracking can be more complicated.

5. Recurring Commissions

Subscription services are all the rage these days. With Recurring Commissions, you don’t just get paid once; you earn a commission for as long as the customer stays subscribed.

Pros of Recurring Commissions

  • Passive income potential.
  • Builds up over time.

Cons of Recurring Commissions

  • Takes time to build up.
  • Depend on the customer staying subscribed.

6. Multi-Tier Commissions

Think of this as the affiliate marketing equivalent to a pyramid scheme, but legal. For every person you refer, you earn a commission on what they earn.

Pros of Multi-Tier Commissions

  • Potential to earn passive income.
  • Network building can lead to exponential growth.

Cons of Multi-Tier Commissions

  • Reliant on the performance of your referrals.
  • Can take time to see significant earnings.

Conclusion

As you can see, there’s more than one way to skin a cat in the world of affiliate marketing payouts. Choose the one that suits your niche and strategy best. Keep your ear to the ground, always be adaptable, and may the commissions be ever in your favor!

Taylor