Most Profitable Affiliate Business Models

The world of affiliate business models can be complex & entering the industry for the first time can be a source of confusion & stress.  You are new, inexperienced and not really quite sure which way to turn for the best long term business & often you have no idea who or what to trust with everyone claiming to have the best online business opportunity. To add to this confusion there are not only different affiliate business models but different payout models and different team structure models & these 3 combine in differnet ways.

So, before you start there are a number of questions you need to answer.

• What is going to be your initial level of investment?
• The amount of time you have to devote to your business – the more the better especially in the early stages.
• Online or offline business (bit of a no brainer really but never the less some people prefer offline)
• Do you want to be buying/holding stock/inventory? – No need to do that these days.
• Are you looking for one off top tier products/commissions or regular but small commissions? 

There are really 3 major business models to look consider:

Affiliate Business Models paying smaller but regular recurring commissions. (Also referred to as residual income)

An example of this would be a business where the affiliate is paid a commission on the initial sale and on subsequent sales and renewals thereafter.  So, it might be that this is a monthly product being shipped or it might be payment for a monthly membership after the initial sale.  However, the success of this method very much depends on the monthly renewal continuing.  If this is cancelled then the commission goes with it.

The levels of commission tend to be low as monthly shipments of vitamins or whatever the product may be are usually low cost – so, you need to consider exactly how many pots of vitamins you need to sell every month in order to create a significant monthly income. But if growth remains steady over time then a significant residual income can be achieved. If the downline members remain constant in numbers  & eventaully increase in numbers then the residual income grows too.  This business model relies heavily on recruiting & maintaining a downline and that in its self takes time, money and energy.  Your higher levels of income only start to kick in once your downline starts producing.  This was the traditional old school model that also employed old school methods of marketing.

Affiliate Business Models paying a one time commission with low cost items

In this business model the affiliate gets paid once usually a fixed amount or a percentage of the cost of the item or service.  Probably the least enticing of all the models as you get paid just the once and often this is may not be very much. However, this is a very common business model in affiliate marketing and given time it can be a profitable & stable business model once the affiliate is established and recognised.  If you become known as an expert of good distributor then the business will to some degree come to you – it's a bit like having a store and your customers come in and make a one time purchase. However, it can sometimes mean that if you sell a recurring service to the same person that you still only get paid once for the original sale as there is no residual income element.

Affiliate Business Models paying Top Tier Commissions

These are sometimes referred to as ‘high ticket’ items and in the world of affiliate marketing this business model is the one that creates 6 and 7 figure earners in a short period of time.  This is the new business model for 2010 and it is often referred to as GPT (Get Paid Today) Just think about it, if you can earn $1,000+ per sale then it does not take many sales to make a very decent income and it often takes far less effort to earn 6 figures using this model than either of the 2 above & far less effort to maintain. 

You need to sell much lower volumes to make far more money. However, for some people a perceived downside to this type of model is that the initial buy in costs that tend to be much higher than the low cost options discussed above.  But, look at it this way how much do you spend per year or over a lifetime buying the regular shipments of the low cost items compared to a one off purchase of top tier?  Once you have bitten the bullet and paid your money then thats it!  Another aspect to consider is that you get paid immediately the high level of commission not in monthly small commissions where you can run the risk of the order being cancelled just a few months down the line before you have earned very much at all.

The most successful models being used today in 2010 are those which combine the Top Tier commissions with an element of residual income as this means that 6 or even 7 figure incomes can be realised in a relatively short period of time without needing a downline BUT over time as a downline is created there is also an element of residual income and this pushes the income level to even higher planes.  The GPT (get paid today) business model is the new model and in the economy of today this is proving to be the model of choice.

Today in 2010 there is no recession on the internet on month on month growth and smart marketers are waking up to the fact that they can have a very successful lucrative online business that utilises the internet and related technology so they need only work part time hours for full time executive level pay.

What has been YOUR experience & what do you think? Tell me what you think in the comments section below..