Website affiliate programs allow merchants to pay affiliates for driving traffic to a particular website. There are different ways of compensating the affiliate website or blog, with the most common method being cost per sale. This rewards the affiliate with a percentage of each sale that he or she makes. Cost per action affiliate programs, on the other hand, pay the affiliate for certain actions such as signing up for a free trial or account. The least common type is cost per click, which pays the affiliate on a per visitor basis.
All types of website affiliate programs rely on the same basic principles regardless of the compensation method. A website with an affiliate program offers to pay an affiliate for traffic sent to that website, either via the affiliate's own website or by another method. The benefit is that the website merchant receives traffic without having to generate it directly, and the affiliate can make money without selling a product or service of his or her own.
Cost per sale (CPS) is the most common of the types of website affiliate programs. With this compensation method, the affiliate receives a commission for every item bought by the affiliate's web visitors. For physical products, the commission percentage is often between 5-20% depending on the affiliate program. Commission on digital products, such as eBooks, can be much higher.
Cost per action website affiliate programs are similar to CPS, but the affiliate gets paid when the visitor completes an action rather than buying a product. This could be signing up for an account or entering an email address. The payout for cost per action affiliate commission is often a fixed amount rather than a percentage. Many affiliates prefer cost per action website affiliate programs to cost per sale because it is often easier to get a visitor to sign up for a free account than to make a purchase.
A less common type of affiliate program is cost per click. With this type of program, the affiliate gets paid for each visitor sent to the merchant's website, regardless of how many buy a product or complete an action. The value of each click usually depends on the value of visitors in a particular market as well as the quality of traffic. Traffic quality varies depending on the source of the traffic and how interested the visitors are likely to be in the website’s products.