We have a niche market. Our products are higher end - $100 - $1000. They fall primarily into three categories - subscription based, physical items (snail mailed), and e-books. 20 percent will be given to affilates on the physcial items. The big debate is what to do with the other items. Some company members are saying no commissions on other products, some of us are saying that we need to at least offer a token amount since it was the affiliate that got them to the site.

Is it acceptable to offer commissions on only certain items? If not, how much of a difference in percentage can we offer on the other items without turning potential affiliates off?

I think that you need to offer some commissions on all of you products. The affiliates are sending you traffic that they are able to deliver elsewhere, expecting that any conversions you make will earn them a commission.

Additionally, some affiliates work with paid search and are actually paying to send traffic to your site.

In previous discussions on this forum, some affiliates have dropped merchants that added orders by phone that did not give the affiliate a commission.

Why do your company memebers believe that only the physical items should pay a commmission? Is the profit margin lower on the other items?

Mike-

Thank you. You said almost exactly what I told the other members.

The physical products are the core products. They have been around since pre-internet days. They have also always been sold at wholesale prices to resellers which is why nobody bats an eye at paying affiliates.

The internet has allowed us to offer additional products. In some cases the profit margins are lower. The internet products also have a much smaller market than the core products. History has shown an initial rush when an internet product is released and then the interest quickly tapers off to a very small trickle. The thought is that, since these are known to have limited sales, all monies need to be kept "in-house". We have an opt-in mailing list of several thousand which is from where the bulk of the sales orginate (that's usually where they are first announced). Some of those people would be on that list thanks to affiliates and I think the affiliates need to be compensated in addition to any direct sales they do.

I just need ammo to go back to the other members and tell them that "those who have gone before us had this experience...".

Thanks,
Zoe

I think many affiliates would bulk at nt getting paid some commission on all products.

Many affiliates buy the least costly item offer just to confirm that tracking works and commissions are paid before heavily promoting a program.