Why are some affiliate programs commissions are higher than the actual sale?

[gobear2000]

Just did a bit of research and I tend to realise some affiliate programs offer a comission that is higher than the sale?
Doesn't really make sense to me

Like for example, if items were selling between US$30-50 and if you are able to grab the customer to buy them in any of those category or items, you get $60 commission?!?! That's like $10 earnings extra than the sale item? I am aware that some may offer like 75% commission like in Clickbank such as for ebooks which I understand but for products selling that way, wouldn't that be a loss for the company? Unless they are using the strategy hoping that the customer will come back again or something?

 

[Linda Buquet]

Great question. Sometimes generous merchant's are paying you extra for the lifetime value of the customer. For instance some hosting companies pay 65 per sale even on 9.95 hosting accounts, knowing that most of their customers stay with them long enough to justify that commission.

Also sometimes the customer is locked into auto-ship. I know one vitamin company that was like that. The initial sale was 35 I think and they paid out $6o commission, because customers would be making auto-repeat orders.

Interesting to note - just went to the site to double check my numbers.
They killed their affiliate program and no longer offer one.

2 things to keep in mind:

Merchants will never pay you more than they make. If they pay over 100% commission they are making extra money somewhere.

Sometimes if an offer SOUNDS too good to be true - it really is.
(Some programs could be scams.)

 

[gobear2000]

Hi Linda

Right, that's what I thought too, sounds too good to be true and most likely to be scammers

And besides, if that's the case, then they can also do some cheatings too if the commission is higher than the sale....such as the example specified before, if you get any customers to purchase any US30-50 products, they can get US60 commission.....therefore, they can actually get the people around them and say like "hey, help me sign up the website and buy for the any US30 products" , then that guy can benefit US30 profit out of the US60 commission just like that!!!! But I am pretty sure no one will do it for nothing though anyways, unless they are friends or something