Are you a webmaster in need of additional income? Or are you planning to set up an online business but you still don’t have any product to sell? If so, affiliate marketing may be the best solution for your problems. With affiliate marketing, you won’t need to worry about the products you have to sell. All you need to have is a website with sufficient content related to the products of an online company offering affiliate programs. By becoming a member of the program, or by becoming an affiliate, you can start earning money right away!

Affiliate marketing is a business relationship established between a merchant and his affiliates. In affiliate marketing, an affiliate agrees to direct traffic to a merchant’s website. If that traffic is converted into a purchase, the affiliate who directed the traffic will be compensated. Compensation may take the form of either a percentage sales commission for the sales generated or a fixed fee predetermined upon the application of the affiliate on the merchant’s affiliate program.

Offering great benefits both for merchants and affiliates, affiliate marketing has become one of the most popular online marketing methods today. In fact, many online merchants and retailers now offer an affiliate program that any one can join. Most retailers entice people to become affiliates or members of their program by promising great benefits like large commissions, lifetime commissions, click through incomes and many other benefits.

The question you may be asking is whether all these affiliate programs bring off the same benefits?

Most affiliate programs would pay you, as an affiliate, a one-time commission for every sale or lead you brought to the merchant’s website. Commissions for this kind of affiliate programs are usually large, ranging from 15% to a high of about 60%. Other affiliate programs would pay you a fixed fee for every click through or individual you send to the merchant’s site. Programs like this often pay a smaller fee for every click through, usually not getting any larger than half a dollar. The good thing about this kind of program, however, is that the visitor won’t have to purchase anything in order for the affiliate to get compensated.

Another type of affiliate program is the residual income affiliate program. Residual affiliate programs usually pay only a small percentage of sales commission for every sale directed by the affiliate to the merchant’s site. This commission often comes only in the range of 10% to 20% sales commission. Because of this, many people ignore residual affiliate program and would rather opt for the high paying one-time commission affiliate program. Are these people making a mistake, or are they making the right decision?

It is debateable whether these people are making a mistake by choosing a high paying one-time commission affiliate program, however, they are definitely making a large mistake if they ignore residual income affiliate programs. Although residual affiliate programs pay at a lower rate, merchants offering such kind of programs pay regular and ongoing commissions for a single affiliate initiated sale! That means, for the same effort you made in promoting a particular affiliate program, you will only get paid once in a one-time commission program, whereas a residual income program will continue to pay you on an ongoing basis!

Here’s an example: 

Suppose there are two online merchants both offering web hosting services on their sites. The first merchant offers a one-time commission type of affiliate program that pays $80 for every single affiliate initiated sale. The second merchant also offers an affiliate program, but this time a residual affiliate program that pays only $10 for every single affiliate initiated sale. At first glance, many affiliates will be attracted to the first merchant’s offer, since $80 is significantly more than $10. However, if you were to consider the two offers over a longer period of time, it is clear that the second merchant offers a better opportunity to earn a larger amount of money. 

Supposed you have directed traffic to the merchant and it converted into a sale, you’ll get paid once by the first merchant for the sale you have initiated. But with the second merchant, you’ll get paid monthly for as long as the customer you have referred to the merchant continues to use the web hosting service. That means that for the same amount of work for getting one customer to the purchase the merchant’s service, you get paid monthly in residual affiliate programs while you only get paid once in a one-time commission type of affiliate programs.

In 8 months, you will have earned $80, beyond 8 months, you will be earning more than an affiliate from the first merchant.  If you can introduce a sufficient number of people to the second merchant’s website and they become paying customers, you can generate a pretty regular income source without doing any further work.  Whereas if you were with the first merchant, you would have to continue referring customers if you wanted to continue getting paid.

So, are residual affiliate programs worth promoting? Definitely, because you get more money from these types of affiliate programs in the long run! So if you have been ignoring residual income affiliate programs because of their “low” pay-out, it’s time to reconsider them again.