What is a good conversion rate?

My company is launching an affilliate program shortly, and I want understand how affilliates look at conversion rates. We sell hard products and have what I consider good close rates for our most popular items (10%-20% for targeted Google Adwords). We don't have much margin to pay out high percentages on commisions, but becuase we are a discounter, I feel our conversion rates are better than our competitors.

My products are often gifted, and as such have a huge spike during the holidays.

Will we ever be able to attract super-affilliates with a only a 5-7% payout?

I appreciate honest answers and constructive feedback. Thanks!

5-7% is still quite good in my opinion. It must differ considerably from industry to industry, because I view 5-7% as very solid.

A super affiliate looks at...
- What is the average $ per sale?
- Is the program private label/co-brand?
- Is there a data feed?
- Does your site have an 800 number? Do the affiliates get the credit for the phone sales?
- Does your site have ads on it?
etc.

5%-7% is so great. The average CR for websites is about 1%!

CR for email campaigns can be considerably higher, but 7% from a website is simply incredible! Congratulations!

I think there is a misunderstanding...
5% - 7% is the COMMISSION not the CR. So it is not that great, unless the average $ per sale is way over $100. This program will not attract the top affiliates.

Let me clarify, My PPC ads through google for my best selling products close between 10%-20%. The overall site conversion rate is much lower, between 2 and 5%, considering all the sources.
Thanks Gail,
This is exactly the kind of information I am looking for. I hadn't thought about the 800 #, as my site does have one - and it's currently prominently displayed. You make a good point. Regarding the co-brand / private label...please elaborate. The program I will be instituting is a in house solution created by my shopping cart provider, ultracart. They've told me it is very similar to myaffilliate, but since it's been built from the ground up, they've made changes based on users from both sides of the fence...sort of a I like what you got, but I can do it better...That is the promise anyway.

Just curious, why the concern about ads on a site? Frankly I strongly oppose them, and currently there are no ads on my site for others, and I am careful not to have to many links leading away (except to product manufactures, because this helps my customers learn more about the products if they choose, and validate MSRP etc.)

You mentioned data feed...are you talking just supplying all of the product info / aff links etc on demand, or are you talking about reporting or both? Sorry if I sound naive, but in this arena I am new.

Here is the other thing that will likely slow me down once I start to recruit affiliates... I don't carry nearly as many products has my competitors do. I sell about 50 products, but other sites sell 1000+ of the same type of product, board games. I do know from talking with manufactures that I do outsell most of my competitors (excluding mass i.e. Amazon / Drugstore.com) for the games I do carry. Again I have hand picked my products and try not to sell everything under the sun. I will be adding 15-30 more products before the holiday season, and I do have a great distribution infrastructure (it's outsourced of course!).

Well any feedback you can provide would be great. I'm all ears!

Whoops. Sorry. my bad!

Ummmm... so, re-reading the post, yes, Gail you are right. i think 5% will not really attract lots of people.

aviken, what is the price of your products, btw?

Thanks again Gail.

This is what I feared. I do appreciate your honesty.

I still think that my industry is mostly niche online anyway, that is some of the larger companies have just started adding Board Games as their own subdirectory - they usually lump them into Toys, which is just too huge. That being said, I don't think that many top affiliates are looking at the board game industry as being worth their time - which I understand.

BTW, my products usually sell for about 20-30% off of retail, and my avg sale from July was $36. Last holiday season it was close to $60.

I've heard that most affilliates don't ever to anything, but that the few that are sucessfull, are very successful. I'm hoping there are some in the middle that will take interest in my offering, and realize that they can make a steady profit. If I was in the aff biz and had sites relating to an industry, I know I'd check them all out to see who would give me the best ROI. I guess I'll have to do some homework on my competitors programs, and see if I can sniff out how well they are converting for the affiliates. I do know that my industry has a lower payout percentage than the higher margin markets. Two of my closest competitors offer 5% & 7.5% respectively.

I've seen aff payouts of 40% and more; but that will never be realized in my industry. I'll keep researching...

It's odd...the more I think about it. I've set my pricepoints to provide me with the highest ROI possible. That is if I raise my prices, I get more per sale but I sell less, and at the end of the month, I make less money. If I lower prices more, it barely affects my close rate, and basically bring in less revenue, and again by the end of the month I've made less money. I think I've hit the sweetspot for most of my products.

I think I'll be able to communicate the advantages of a high closing site vs. the higher priced but you have to throw a barnyard of clicks at to close sites. It's a work in progress. I'm sure I'll figure it out!

Again, thanks for all the candid feedback, it's the only kind I want

From what I have seen, you don't see much of an advantage through low price until you are the lowest on the web... or the lowest that can easily be found. Then you get lots of sales.... froogle and all of the price comparison sites/engines make bargain hunting very easy.

That's a good point. Especially the part about being easily found. Truth is, the lowest priced places can't afford the top PPC spots becuase their margin won't support it. And we all know that most people will only look at a handful of sites before buying (small ticket items like books or games, not SEO services or computers).

I use shopping.com, bizrate.com, etc, and I used to have the lowest prices, and be listed on top...but you know what? I didn't get many clicks. I'm not talking sales, I mean for each click I'd get from bizrate I could get 100 on Google Adwords for the same product title / keyword. Shopping.com performs even less for me. I can't hardly spend my initial deposit LOL!

There are serious bargin hunters that will spend an hour or more to save $3. I'll let them go...but to be clear, about half of my products are the absolute lowest online. I see others losing money on desperate sales, but they don't sell boardgames at a 40% discount for long - unless they make up for it in S&H. Most people check out my site - and then the next few on the list, and decide that that's mostly what's out there, and many come back to buy from me, or if the price is close then they just buy from the last site they're on. I moved my fulfilment from west coast to centrally located OH, and I now offer lower shipping and quicker delivery times than I used to - gives me the advantage over CA based companies when competing in the densely populated east coast / midwest region.

Since my products are often gifted or used for a special event like a party, many customers are in a hurry and just want to get a good deal fast. I provide exactly that.

I also work hard to promote a trustworthy site by offering feedback through third parties like bizrate & epinnions.com(shopping.com).

I've experimented with being lower placement on PPC ads, but it doesn't do as well for me as the top 3 paid spots. Of course it's always changing...

Wrong - top affiliates love niche products.

Raise your prices and give your affiliates a 20% comission.

Very true.

Go just for the super affiliates - go for the top. Blow your competitors out of the water. The top affiliates can help.

Thanks for all of the insight Gail.

I was reading some of you other posts, and it dawned on me that we've talked before...I contacted you regarding some of your sites with related themes to mine.

I've been meaning to follow up on writing some articles...I didn't know I'd bump into you here! I'll follow up with you in email.

Again, many thanks for all of you input!

Good luck with the affiliate program.