Best practices here include preparing a monthly newsletter to affiliates, explaining what s working and what s not, a what works where analysis using cross tabs that identifies what kinds of promotions work best on what kinds of sites. Another best practice is selective recruitment of new affiliates. Rank order the sites in your affiliate program from top to bottom based on the results they deliver. Look closely at the top 20 percent of the sites in your program. You should focus on going after new sites that look like today s top performers in terms of content and viewership.
Most affiliate programs pay the site publisher a percentage of revenue without regard to margin.
Meanwhile, the merchant is losing his shirt, paying out 10 percent of revenue on a product that has no margin in it to begin with. This is a recipe for disaster. A simple example makes the point. Product C is a commodity with broad appeal but a skinny margin of 5 percent. Product X is a bit more exotic but has a much fatter margin of 25 percent.