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Should you make that fast buck or reap long-term rewards? When it comes to choosing commission plans, this question may well keep affiliate marketers up at night. There are two main ways to earn your commissions – CPA (Cost Per Acquisition) or RevShare – and making that decision depends on your business model, short- and long-term goals, and who you are referring to an online broker (clients, affiliate link traffic, your own trading followers). This blog answers the questions most often asked about RevShare.
What exactly is RevShare?
A: As the name indicates, RevShare refers to “revenue sharing” – a definition that could change depending on whether you are an affiliate marketer or a business owner (or broker). If you’re a broker, RevShare refers to sharing a percentage of the revenue with your affiliates for driving sales through their referrals trading activities. On the other hand, if you’re an affiliate marketer, RevShare is the commission you earn either by sending referrals or your clients who are linked to your account. In other words, each trade they make earns you money, and the more clients you have, the bigger your earning potential. To further clarify it, as an affiliate marketer, you earn a percentage of the profit the broker makes per sale, not a 1-time referral commission fee.
Unlike CPA – a one-time payment affiliates get for referring a new trader who opens a trading account with the broker, deposits funds into his trading account, and starts trading – RevShare plans provide a lifetime incentive. Expect to earn commissions long into the future as long as the trader/s you referred continues to trade with the broker.
How do you know if RevShare is right for you?
A: The RevShare model is a perfect option for those who want to achieve the top level of affiliate commissions and, at the same time, generate ongoing income. Choose RevShare if you’re confident that you can get good leads and you’re willing to make profits for the long term. As mentioned above, every time your referrals or clients make a successful trade, you make a commission. However, at the same time, when you choose to go with RevShare, you’re committing to more challenging work in terms of attracting clients/referrals to trade with your partner-broker. It takes effective marketing and targeting skills and strategies to pinpoint traders who are interested in your advice to improve their trading and investing capabilities and who will listen to your trading advice. You must be able to convince them to either start trading with the broker you are promoting or join you and sign up under your MT4 MAM account (you trade for them).
Remember, RevShare does not offer quick, one-off (and low-level) commissions, but medium- and long-term (though more gratifying) financial rewards. Be ready for a scenario where you might not make anything during the first month, but may gain substantial earnings over 12 months. The trick is to continue building your client base and see your profits grow over a lifetime.
Why would an introducing broker be more likely to choose RevShare?
A: It is usual for affiliate marketers – whose job is to simply refer traffic to the online broker – to opt for a CPA payment structure because the commissions/profits come as quickly and as regularly as their traffic referrals. On the other hand, the introducing broker does more than just referring traffic. He has to establish ongoing communication between his client and the brokerage, ensure client satisfaction, and encourage future transactions since these all impact his profits and success. He, therefore, has longer-term goals and is banking on future trading activities of current and potential clients – making him a perfect candidate for the RevShare commission structure.
What is your RevShare percentage calculated on?
A: There are a few ways to calculate your RevShare percentage. For some RevShare plans, the percentage is based on the revenue your client/referral generates for your partner-broker (whether gross or net). For others, it is the percentage of the spread value – the difference between an asset’s (stock, bond, or commodity) bid and ask prices. For other types, you as affiliate marketer may receive – instead of a percentage of revenues – a specific dollar amount per lot traded by your referral. Whichever option you prefer, be sure to read the terms of agreement, so there is no unpleasant surprise at the end.
In addition, remember that while RevShare plans boast a “lifetime” feature, some actually have a set or limited time period, say 12 months. Again, before you make a decision, clarify the details, which may make a difference if your referrals plan to be active for the long term.
What can you do to help your referrals help you succeed with RevShare?
A: There are three critical strategies. One, it is important to create or develop a site that takes care of the potential clients/referrals you are sending through your affiliate links. This bolsters their engagement. Two, you must help your potential clients by answering their questions and providing quality and beneficial content and information that will encourage them to trade with your partner-broker and, therefore, be of great value to you. Last but not least, you must ensure that your referrals continue to trade actively by partnering with a broker who is reputable, offers excellent customer service, and provides the latest and most advanced trading tools and platforms to enhance the trading experience.
A: Here are 3 tips how:
- Choice of broker
Besides partnering with a reputable, highly regulated, and highly trusted broker, it is important to work with one who offers highly-in-demand products such as a variety of financial instruments to trade with. - Choose a broker who can provide excellence
Make sure to partner with a broker who offers competitive trading spreads, superior trading conditions, numerous trading resources, innovative and the latest trading platforms and apps, and professional customer service. - Calculate your potential revenues over the medium- and long-term
You want to calculate your potential revenues over the medium- and long-term so you can design your promotions and budget your marketing activities to ensure you turn a profit. Start by checking if the RevShare scheme is to your satisfaction as far as payment terms, percentage payouts, duration of agreement, and the percentage value of your commissions over time.
Find out how AvaTrade’s RevShare commission plan helps you optimize your earnings!