After watching the first few parts of “4 Pillars of Internet Marketing” and selecting a niche your next step would be to find a product to sell within that niche.
Different products have different commission structure due to their own limitations, eg. physical/tangible products have the lowest commission structure at just about 5-10% from the sale generated while intangible – can have up to 40-60% of the sale amount. I will talk about commission in detail in the video Choosing a Sponsor As an Affiliate Marketer. But for this video lets concentrate on different types of products, which there are two: tangible products and intangible ones. And you would be surprised how greatly the payout structure varies for them.
An example of a tangible product will be any item sold by Amazon. Hence why their commission structure is the lowest on the market, sometimes being just 1.5% of the sale. They justify it by large overhead costs associated with each product sale. After all, Amazon is a large company with hundreds of thousands of employees working at multiple processing centres located across various warehouses around the globe. By working with Amazon, you become one of such employees that gets a little cut of the pie each time the product is sold, even though you were technically doing all the job by acquiring the customer and convincing him to buy something.
For us, seasonable Affiliate Marketers who used to getting 20-50% commissions on the sale, it doesn’t really make sense to promote a Sponsor like Amazon as their payout is simply too low to justify exactly the same amount of work involved into promoting an Intangible Product and getting much higher commission in return.
Intangible Product (Software Product)
Unlike tangible products this type of product boasts higher commission and the main reason for that is attributed to that fact that such product can be easily multiplied without all the extra overhead costs of processing and distributing a physical product. Hence, why the commission for Intangible Products is generally much higher than that for conventional ones.
A great example of tangible product would be a Software Product. The product need to be created only once and then can be sold unlimited amount of times when both you and your sponsor enjoy hefty profits without the need for extra efforts required to distribute it, the processing is also usually done by a an automated third party software. Even better example to selling a Software Product would be selling a product that has a recurring monthly subscription. In that way you don’t even need to make extra effort to sell it again as your commission simply keeps rolling in month after month.
Another example of intangible product would be a service.
There is also a type of product which falls in between of tangible and intangible ones and become recently available to Affiliate Marketers which will be a Service.
In a way, selling a service becomes a most honest type of dealing between you as an Affiliate Marketer and a Sponsor as both of you become responsible for your own parts of the sale : you acquire a client and a sponsor services that client.
This type of marketing also allows for more flexibility in terms of pricing and special offers as Sponsors can usually tailor their offering to the specific needs of an Affiliate Marketers with a proven track record of delivering a good volume of quality sales.
To sum it up, as an Affiliate Marketer you should be able to understand different types of products and limitations of their respective commission structure. The payout for tangible products is usually the lowest which is due to the complexities associated with handling them, while that of the intangible ones are the highest. Always keep that in mind when deciding on your next product to promote.
In the previous video I covered the 1st Pillar of Affiliate Marketing Which Was a Niche. And, in the upcoming video I will tell you how to Choose a Sponsor In Your Niche. So, please subscribe to this channel not to miss it.