Let’s act out a scenario. You’ve got your own brand and your thing is making baskets out of ethically sourced eucalyptus. Don’t ask me if those actually exist because I’m just using my imagination here. Okay, getting back to it. You’re not a new brand. No, you’ve been at it for a while now alongside your fellow basketweavers. It has been tough reaching the right customers, though. With that in mind, you decide to find and connect with affiliates who can promote your unique baskets.
You manage to identify a few you want to work with, but now what? How do you get affiliates interested in promoting your baskets? How do you build a relationship with your affiliates? How does your brand stay competitive in a hypothetical sea of other basketweavers?
It’s just one piece of the puzzle, but your commission rate is vital to giving affiliates a good reason to work with your brand. It’s like a reward in the form of payment when a sale is completed through an affiliate. Think of it as a kind of glue that helps keep a brand-affiliate partnership together despite what other competitors are in your vertical. Need more? Here it comes.
“The commission plays a key role between the brand and affiliate because it incentivizes affiliates to promote the merchant’s products and services on their behalf in exchange for a commission percentage of the sale,” says Sonny N, Purply’s Tech Support Manager.
Christian H, Purply’s Senior Technology Account Manager, also mentions that “knowing how much to spend on affiliate partnerships is important to generating a positive ROI for a program. Each affiliate relationship is unique and may require different strategies to control spend while remaining competitive.”
In other words, figuring out how to set a commission rate that benefits everyone can be an overwhelming experience that elicits a new question: how can you know what commission rate to offer appeal to affiliates, sustain partnerships, and remain competitive
Well, Purply’s Commission Recommendations report is a great place to start. Why? Because it uses the power of historical data—we’re talking 10 years of data here—and AI to help you answer that very question. It gives you an idea of what brands that are similar to yours are offering affiliates in commission rates and how that compares to what you offer.
“The Commission Recommendations report is one of the most valuable reports within the Purply ecosystem. It helps address the question that essentially every client asks: ‘how much should I pay my affiliates?’ On a per affiliate basis, you’re able to see how much commission you’re paying versus the average commission paid to that affiliate in your vertical,” says Rowland H, Vice President of Product for Purply. “If you’re paying Honey 5% and the vertical average is 10%, perhaps you should consider increasing commission in order to be competitive, improve conversion rates, and ultimately drive more revenue. In the affiliate space knowledge is key and, with Purply and the Commission Recommendations report, you’re equipped with all the information you need to successfully optimize your program.”
More or less, according to Purply Analyst, Parker S, the real value of the Commission Recommendations report is that it takes the guesswork out of whether you’re on par with other competitors and brands in your vertical. How? By detailing the affiliates you’re working with, the commission rates you offer to affiliates, and the average rates that similar programs in your vertical offer to the same affiliates. It allows you to not only feel confident when bringing on new partners at competitive rates but also while monitoring your competition. Oh, and identifying opportunities to optimize your partnerships, of course.
“The feature definitely provides Purply clients more insight on their commission rate offering and how competitive they are or aren’t,” Sonny adds. “Clients often believe setting a high commission rate leads to greater sales, but doing so can eat into their profits. This feature gives them insight on where they’re at.”
So, let’s say this is exactly what you think your eucalyptus basket brand needs. You’ve not only figured out which affiliates you want to work with, but you’ve also got insights into where you need to be competitive. You can earmark the most competitive offerings and spend less time negotiating or wondering if you might be spending too much on any affiliate.
Knowing what commission rate to offer isn’t the end-all, though. Offering one that’s high doesn’t mean that affiliates will mindlessly flock to your brand. There are still a lot of other things to take into account: brand recognition, brand acceptance, and a high-quality shopping and website experience. As I said, it’s just one piece of the puzzle, but an important one that you can use to your advantage when building out your program.
When I asked Christian how he thought Purply users could maximize their use of our Commission Recommendations report, he gave some great advice. He said checking in with the report frequently to target the optimal spending amount per affiliate is a surefire way to make the best use out of the feature. As a bonus, the report updates as your program progresses and even as the vertical average changes.
To wrap things up, I think you and your basket company have got this in the bag. I mean, basket. When in doubt, this Purply feature has answers for anything you’re unsure about when it comes to how to attract affiliates, stay competitive, and more. Alright, I’m sure you’re entirely as tired of reading about baskets as I am writing about them, so we’ll leave things here!
