You have narrowed down forex affiliate programs that suit your needs, but cannot figure out which commission structure to choose. There is a one-time, lucrative, seemingly fast way of earning CPA option. On the other hand, you have long-term, life-time revenue share alternative. Many affiliates reach this cross road with a question – what is better?
The general perception among affiliates regarding these two payment methods are as following:
1. Revenue Share
Revenue share is widely believed to pay more, however this is not always so. Yes, it is true that in the long run, getting percents seem to be much more profitable. Even without new conversions, you can get monthly payments from the previously referred traders. However, a lot depends on an affiliate. How much experience do you have? How many websites do you run? What is your marketing plan? What are your expectations? Is being affiliate your full-time job?
Revenue share provides a constant cash flow, however keep in mind that bonuses, for example, given to traders, eat away certain amount of the affiliate revenue share too. The whole idea is that the profits and the “losses” are shared together with the program.
2. Cost Per Action (CPA)
CPA – pays now, however the price you get never reaches the actual value of the trader. Let’s imagine that last month you referred 5 new traders and got $1,500 CPA. This month, for some reason, things go a bit slower and you refer just 1 new trader – your $300 CPA is waiting to be paid out.
Now it is the right time to wonder how much all of those traders have already made for the broker you referred them to. In almost all the cases, it is way beyond the sum paid out to you. Are you feeling ripped off yet?!
Not in all cases, though, CPA is a bad choice. A beginner affiliate might actually profit from CPA structure, since at the start of all business, there is always more expenses than actual income. While revenue share, in the beginning, may sum up to just couple of hundreds, a CPA deal can bring in the so-needed fast cash for a hard-working webmaster.
Solution – Hybrid Plan
So, what is a solution? In my opinion, the best way to get your commissions is via Hybrid plan, which is a combination of two types of affiliate commission options. Here are the benefits:
· When there are no conversions, affiliate still receives a certain amount of cash generated from the referred traders.
· During the month where the previously referred traders are taking it slow, but new sign up show up – the CPA is coming for the rescue.
· The happy days when both CPA and Revenue Share work hand in hand creating a great combination of cost per trader and percents of each trades made!
Hybrid plan is rather new option among forex affiliate programs, however even if it isn’t mentioned on the site, doesn’t mean you shouldn’t ask for it. Most programs will request a “probation period”, during which it would be possible to determine reasonable expectations (aka value) from your sites and referred traders.
Overall, hybrid commissions seem to be a fair compensation for both the programs and the affiliates, providing the flexibility and the potential financial growth of both parties involved.