How Do Forex Affiliate Programs Work?
If you are someone with a keen interest in passive income, it’s likely you’ve come across the term affiliate marketing. Basically, affiliate marketing refers to a form of marketing where a person [known as an affiliate] promotes the products of another company through banners, clickable links or referrals to the company’s website. The affiliate is then compensated through commissions.
From that definition alone, one could infer what Forex affiliate programs are. In Forex affiliation, you market online-based Forex brokers by referring potential traders to their website. There are many factors to consider before becoming a Forex affiliate, the most important one is whether the aspiring affiliate has any online capital. People with a vast online following, either through their social media platforms or personal blogs, are better placed for this kind of affiliate marketing.
Forex affiliate referral links are not your ordinary links. They should be easily distinguishable from other links shared by the affiliate. Usually there is an ID code that makes this link special, distinguishing it from other affiliates working for the same company. For example, if you referred a client to KFC, the link might appear as something like http://www.KFC.com/landing.php?id=3
How Are You Compensated As A Forex Affiliate?
There are various means through which Forex affiliates are compensated. The following are only some of them.
The term CPA stands for cost-per-acquisition, and means that the affiliate is compensated when the client you referred ends up either signing up for an account with the brokerage company or makes some form of deposit. Your compensation depends on the size of the company you are working for, the value of the deposit your referred client makes, as well as other considerations, however industry rates range from $150-250.
Here, you earn your commission both from spread as well as a fraction of your client’s losses. There are some companies that may also directly share their revenues with their affiliates, hence the name.
Also known as cost-per-lead, a CPL-based compensation system happens when the trader you referred provides their personal details on the landing page of the broker. Some companies may only offer this compensation if the trader also signs up for a demo account.
In rebates, you receive compensation depending on the broker’s net volume of sales. Again, this depends on the company you’re working for, as well as the currency pairs. But generally, industry rates range from 0.5-2 pips.
As the name suggests, this is a compensation system that takes into account two or more of the methods highlighted above. It is a method preferred by seasoned Forex affiliate marketers.
What To Know Before You Become An Affiliate
Becoming a forex affiliate is no walk in the park. There are certain factors to consider. Some of them are highlighted below.
Understand the Broker
As this type of marketing takes place almost exclusively online, your chances of earning meaningful commissions depend on the honesty and reputation of the broker you choose to work for. Accounts abound of underhand brokers that are not honest in reporting the number of accounts opened by referred clients. There are also those that delay payments and if you are unlucky enough, the payment may never come. Therefore, invest some time in online reviews as well as community forums to uncover the reputation of a broker before signing a business deal with them. Do your due diligence to hone in on a broker that comes highly recommended. Next, dig up their history and try to go with brokers that have a fairly long history in the industry. Contact them for inquiries and note how responsive they are to your questions. Also check on the industry-competitiveness of their rates and how reasonable they are.
Understand Your Method of Compensation
All the above methods of compensation will depend on your hard work; there’s no getting away from it. However the returns for operating under some of them are going to than others. Therefore carefully analyze every aspect of a compensation method before opting for it. For instance, a broker might come across as making huge revenues, and lure you to opt for revenue sharing as your preferred compensation method. You might then lose out in the event the broker reneges on their payment terms.
Flexibility takes various shapes and forms when discussing Forex affiliate marketing. First, the broker’s support system should be comprised of professionals proficient in more than one language. Also, they should be flexible enough to offer different kinds of accounts and payment plans.
Availability of a Back Office Software
This ties back to honesty and credibility. As an affiliate, you cannot always take brokers at their word, especially with regards to your referred clients. The only way to be sure is to track your performance in real time, and that’s where a back-office software comes in. Remember, the key is not just knowing how many of your referred clients turned into potential leads; but knowing it immediately so you are on the same page with the broker.
Ease of Transaction
Again, the company should provide flexible options through which your clients can deposit or withdraw their funds. And that should apply to you – the affiliate – as well.
Evidently there are lots of things to learn before becoming a Forex affiliate. The secret is to rely on online tips and recommendations from people who have been there and done that.
As soon as you are raring to go, there are many affiliate programs you might want to try out. These include FBS Partnership Program, eToro Partner, Forex.com, Plus500, AvaPartner, or you can check on FXDailyReport forex brokers list.