Among the primary objectives of an affiliate marketing company is to make it quicker and easier for you to find suitable co-marketing partners for the latest offers of your business. Successfully convincing them to sign up as your affiliates is also one of their priorities. And, they also provide tools and resources that can make your entire affiliate partnership experience mutually beneficial and hassle-free. So, how much are you willing to pay for these advantages?
Would it surprise you to learn that the primary income-generation model of many reputable affiliate marketing companies is to earn from payment processing fees? If you don’t know what payment processing fees are, then read on.
What is a Merchant Account?
A merchant account is provided by a financial institution to a business establishment or to a second tier payment processor. For example, a bank can offer a merchant account to a business establishment that sells products through their ecommerce platform and their offline storefront. On the other hand, a second tier payment processor is like an affiliate marketing company that offers payment processing solutions to their own advertisers and affiliates.
This merchant account is what allows these businesses to process payments done by customers through their payment cards, banking applications and other modes of payment. It also enables them to track and monitor their revenues, issue refunds, handle chargebacks, manage and secure their customer databases, and also to withdraw their earnings to their own banks.
What Are Processing Fees?
Processing fees are what the merchant account provider charges these business establishments and their second tier clients for each successful transaction. They also charge certain fees for each refund request and chargeback claim. For example, a merchant account provider can charge 3% of the total amount of each transaction that an affiliate marketing company allows their advertisers to process through them. To generate revenues for their business operations, most affiliate marketing companies charge their advertisers 5 to 8% of the total amount of each successful transaction. There are also affiliate marketing companies that accept advertisers and publishers in high risk industries, though they charge from 12 to 30% or more per transaction, in order to effectively manage associated risks.
On the other hand, a merchant account provider can charge $10 for each refund request, along with a $100 fee for each chargeback claim that goes in favor of the claimant. Because merchant accounts are notoriously used by cyber-criminal syndicates to process stolen credit cards, providers set a limit for acceptable refund requests and chargeback claims per month. And because second tier payment processors like affiliate marketing companies can lose their merchant accounts if any of their advertisers and affiliates incur huge refunds and chargeback claims, they also charge higher refund and chargeback fees to manage these associated risks. That’s on top of the strict review processes that they do before advertisers and affiliates can get into their network.
Now that you can effectively manage your expectations in terms of what you need to pay for the services of an affiliate marketing company, you need to learn about the advantages and benefits that they can provide your business. To help you out – Here are some of the primary benefits that affiliate marketing companies aim to give their advertisers and merchants:
What Sort of Benefits Can Your Business Expect From an Affiliate Marketing Company?
- Quicker & Easier Ways to Find & Reach Your Ideal Affiliates – Because the most reputable affiliate marketing companies provide access to their ready network of affiliates, what you’re left to do is to identify the marketing agency that specializes in your niches and industry. Simply put, you need to find an affiliate marketing company with a network of content publishers, app developers, brands and establishments that have large active subscriber lists, regular viewer traffic and users or community members comprised mostly of your ideal prospects for your latest offers. For example, if you’re currently selling toys for kids aged 8 to 12 years old, then affiliate marketing companies that specialize in gaming, education and other niches for kids in the same age group can be ideal go-to groups for your affiliate sourcing requirements.
- Cost-Effective Tactics to Successfully Generate More Affiliate Sign-Ups – Because the affiliate marketing companies that specialize in the niches and industry where your business operates have ready networks of your ideal partners, they’re in the best position to promote your affiliate offers to this network. They’ll allow you to post your affiliate offers, and their back end systems will automatically promote your offers across the most suitable affiliates in their database. They can also guide you on how to optimize your offers, in order to become more captivating, enticing and compelling in the eyes of your target affiliates.
- Faster Ways for Your Affiliates to Start Promoting Your Offers Across Their Subscribers & Regular Viewers – An affiliate marketing company normally provides a platform where merchants and advertisers like your business can upload content marketing materials and other stuff that can greatly help your affiliates to start promoting your products and service offers to their traffic in no time. This platform also offers you and your affiliates the convenience of viewing real time campaign results and conducting direct communications. In turn, this allows you and your affiliates to make instantaneous improvements to their campaigns and also to your own affiliate offers, based on your mutual understanding and recommendations.
- A Constantly Growing Pool of Ready Affiliates – These affiliate marketing groups consistently grow and nurture their ready network of affiliates. Their primary objective is to keep on adding more suitable affiliates that can forge mutually beneficial partnerships with their advertisers and merchants. And, their other priority is to keep their affiliates, merchants and advertisers interested in staying with them, which is the main reason why they invest heavily in ensuring that mutually beneficial partnerships can be built through their platform and services.
Now that you know some of the most advantageous benefits that the right affiliate marketing company can provide your business, you’ll also be able to use these details when choosing a provider. Just don’t forget to check the exact fees that they charge for their second tier payment processing services. And, keep in mind that they also implement security protocols, technologies and the appropriate technical staff to ensure the security of their payment systems and commission tracking processes. Remember to factor this into your decision-making process whenever you’re trying to select the best provider in your shortlisted affiliate marketing companies.