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Affiliate Marketing - One Time Commissions vs. Recurring Commissions
Whenever I get into a new niche, I will usually start looking to build an affiliate commission stream, and I always fight myself on building a recurring commission site, a one-time commission site, or a hybrid site that has the best of both worlds.
Recently I started expanding my affiliate marketing streams into a niche that I'm already tackling and thought about the One Time Commission vs. Recurring Commission structures, which is why this discussion was born lol.
I'm going to list my ideas, concerns, and what I tend to go with, but I'd love to hear what everyone has to say about their affiliate marketing journeys and why they chose the paths they're on.
One Time Commissions
When it comes to affiliate commissions, I can see why most companies prefer to do a one time commission. They will only have to pay you for the first transaction your referral makes, which could be $1, and the company now has a new customer that will likely come back again and again.
I like one time commissions, but only if the company is paying a high dollar amount per conversion, otherwise I tend to lead towards the recurring commission structure.
One type of company that I tend to promote are hosting services. They will usually offer a one time commission, but it's a much higher amount, and you tend to get a tiered structure. If I refer one customer, I will get $50, but if I refer 20 within the same month, I'll be bumped up to $100 per sale. Some months are good, some months aren't, but in the end, it's usually profitable because the companies I promote are paying me more than they profit within the first few months of a customer being with them.
I love a nice recurring commission structure because I feel I can build my profit streams gradually and have something to fall back on if times get rough. Think about it, if you were promoting this platform you would get 10%, or more depending on the custom affiliate commissions set by sellers, and you'll get that from every person you refer that makes a sale. You will get a commission if they buy today, tomorrow, in six months, or six years!
The only problem with a recurring affiliate commission structure is that you tend to get much less compared to a one-time affiliate commission structure. Sure, I'll make 5x promoting a different SEO service on another platform, but I'll only get a commission on that one sale, and here I can get commissions from the customer forever as long as the platform stays alive
Which path you should take and why
One thing I think about when making my decision on what companies to promote is, do I need the money to build up right away, or can I grow my recurring commissions over 6+ months and be fine? I tend to start early before I need any money, and that means I lean more towards the companies offering a recurring commission structure. Now, that doesn't mean I won't set up an affiliate website for a company that is offering me 75% of the first sale and giving me a bonus if I hit certain numbers lol.
Affiliate marketing isn't anything new, and I'm sure you've heard it all before, but there are a lot of things to consider when it comes to profiting. You need to understand if you can wait 6+ months before you start profiting from a recurring commission structure if you need bigger profits upfront and need to work more with one-time commission structures. The choice is ultimately yours, and it depends on how much money you need right now.
Thanks for reading
- Tommy Carey