The Pay-Per-Sale (CPS) Model

Cost-Per-Sale (CPS). Advertiser pays the publisher a percentage (%) of the Order Amount (Sale) that was created by a customer who was referred by the publisher.

This Model is used by most Online Merchants today.

Here are same basic tips for Advertisers that consider starting an Affiliate Program with CPS Compensation Model:

Do not pay commissions that you end up loosing money on an order. You will gain new customers because of the Affiliate Program, but you will also pay commissions for returning customers.

Shoppers on the internet are more savvy today. Comparison Shopping Sites, Coupon Sites, Cash-Back Shopping and Charity Sites, that make up a large percentage of successful affiliates, are often visited by Shoppers first. See the Affiliate Program also as a Customer Retention Tool.

CPA or CPS?

If your competitors have affiliate programs and you don't, chances are good, that you are loosing a considerable amount of business to them, because the lag of an affiliate program for your site.

If you want to use an Affiliate Program as an Online Merchant for the whole purpose of customer acquisition, consider the CPA Model and pay a flat commission for new customers referrer by affiliates.

Do the math to come up with a Flat Commission that makes it worthwhile for affiliates to promote you. Affiliates are not waiting for you, the next Merchant that has a Program is only one click away.

What you do and what commission you pay is up to you. You can also mix compensation models. The best thing to do is always to check first what your competitors are doing and use their compensation model as reference.

Pay-Per-Sale is by far the most common compensation model. 2/3 to 3/4 of all Affiliate Programs today are Pay-per-Sale Programs. The operating Site only pays "Commission" to their Affiliates for actual Results (a Sale, Sign-up etc.) and not just for promises (Clickthroughs, Banner Impressions).

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