While some programs only offer one payment arrangement to their affiliate, others have a wider selection. A variety of ways exists in which an affiliate can earn money; some are based on the number of clicks and others on the overall revenue generated. Which arrangement is the most beneficial is difficult to determine as it relates to the particulars of each affiliate program, the type of industry as well as the performance of your own website(s). Let's take a look at the five most popular payments methods:
GROSS Percentage of Revenue generated
This is the best and the most rare deal available to an affiliate. Why? Well, as you may know, this type of payment arrangement reflects the revenue generated as a result of the traffic sent to the merchant site. In this case, however, you have the opportunity to earn a percentage of the GROSS merchant revenue. Why is GROSS better than NET? Net revenue means that the merchant deducts various unaccountable charges before they calculate the base on which the affiliate gets paid. These charges may include credit card charges or advertising costs, among many others. There are no deductions made when payouts are based on gross revenue, allowing affiliates to earn more.
NET Percentage of Revenue generated
Although this method is not nearly as advantageous as the previous, it is the most prominent payment arrangement. Depending on how much the merchant gained from the affiliate's referred visitors, a percentage of that is given to the affiliate; however, the percentage is calculated after various deductions are made. Overall, you can earn a decent amount, only you'll have to work a little harder.
CPA is nowadays one of the more popular payment arrangements employed by affiliate programs. The way it works is that affiliates get a set amount for each individual they refer that has purchased something from the merchant site. While the amount paid to the affiliate for each customer is unrelated to their purchases, it does reflect the number of customers they referred; more customers usually means better pay. Overall earning potential is largely dependant on the industry and the particular program that the affiliate has signed up for. If the demand is there and the program payouts are relatively good, you're all set.
This is pretty much self-explanatory; you are paid a certain amount for every person that clicks on a referral link to the merchant site (no purchases or sign-ups necessary). Because the earnings, which average 1 to 25 cents per click, are low, this is a good opportunity for high-traffic sites only. The more traffic a website gets, the more clicks it will receive.
This is very similar to the PPC payment arrangement; however, in order to get paid for the referred individual, they must complete something like an online form or download a piece of software. The merchant then has the option of contacting these individuals trying to pursue them to purchase their product or service. This form of payment is rarely used nowadays mainly due to the fact that it benefited the affiliate more so than the merchant, which we of course can't have. If the merchant isn't generating sufficient revenue, they won't be around for long.