Residual Income Affiliate Program
There are many types of affiliate programs. The residual income affiliate program is a form of a pay for sale program offered by some, but not all, sites.
You can pay me now or you can pay me later. This was a refrain of a famous commercial about transmissions. The same idea applies to affiliate programs. At issue is the revenue structure. Most affiliate programs are set up with the carrot being a larger payout up front for a transaction. Some, however, go with the residual approach that you find in brick n’ mortar industries like insurance.
A residual income affiliate program is one in which you really take a leap of faith with the sponsor site. You are betting that the site can not only covert your traffic into a sale, but that the users will like it so much they will stay with the site for a long period of time. You are making this bet because you are choosing a program that pays you less for the sale in exchange for a payment for the sale AND every subsequent month the user renews. Let’s look at a classic case.
Dating sites are a dime a dozen on the web. The dating site has a goal. It wants to give people free memberships. Why? The free memberships are very limited. You can see the candy, but you can’t communicate with it. To send an email to that hottie, you have to convert to a paid membership. Once you do, the dating site will do all it can to keep you as a member. The longer you are a member, the longer you are going to be paying monthly membership fees.
As an affiliate, would you want to go with a one time payment or a residual payment on a dating site? There is no easy answer. Often, you need to do tests to see how long the average member stays a paying member. If they stay for 6 months, then residual makes sense. If they stay for 2 months, then taking a bigger upfront payment makes sense. Yep, it all comes down to math.
Residual income affiliate programs have a downside. You can become lazy once you meet a certain income threshold. This may sound like a small problem, but it can take the steam out of your sales. Oh, you’ll be okay for a few months or even a year, but then you can see revenues drop dramatically and you can find yourself in financial problems.
Personally, I’ll always choose a residual income affiliate program if there is one in the niche. The chance for long term earnings is just too good to pass up.