Advantages of Different Commissions Schemes for Forex Affiliates | Apexum

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Advantages of Different Commissions Schemes for Forex Affiliates

June 20, 2019

To grow an affiliate business, one needs the skills and abilities of a regular manager. It is all about finding the right commission scheme and generating enough traffic to cover the ongoing expenses.

In this category, we can list expenses generated by the affiliate program such as the cost of running the affiliate marketing campaigns (e.g., Google AdWords campaigns, Facebook promotion, Twitter marketing, SEO adapted blogs).

But there are many partnership types that define the Forex affiliate commission and, like it or not, the smallest details may change the profitability of a well-run business.

To help people finding out how to build the right Forex affiliate program, here are some pros for the various commission’s schemes that exist in online Forex trading.

CPA or Cost Per Acquisition

A popular way to increase a Forex broker’s clients base, the CPA scheme ends when the affiliates receive the payment. Typically, this happens after the client opens a live trading account, fund it and takes the first trade.

Brokers love a CPA agreement as it guarantees the client brought in by the affiliate manager is genuinely a trader. After all, no payment is made until the client starts trading.

Even if the client stops trading after the first trade, the broker has a hot lead on its hands, and can quickly direct future marketing campaigns to stimulate future trading.

For the affiliates, the advantage is that the CPA solution doesn’t depend on the volume traded. Depending on the budget the broker has at its disposal, affiliates can earn more with a CPA solution than otherwise.

The main concern of a business that acts as an introducing broker is to get the commission as quickly as possible. And, to be independent on the traded volume. For this reason, the CPA appeals more to affiliates than the revenue sharing scheme.

Revenue Sharing

Under this scheme, the affiliates do not receive any commission when the introduced trader opens a trading account. Instead, commissions start pouring as soon as the trader begins operations on the currency market.

For the Forex broker, the advantage is that it will pay a commission to affiliates only if the trader is active. In other words, the affiliates receive a part of the Forex broker’s earnings as long as the trader is active.

While this arrangement is favored by the Forex broker, many affiliates prefer to see some money at the moment the trader opens an account, and then, if possible, to receive some commissions under the revenue sharing scheme.

Conclusion

Variations from the two programs do exist. Moreover, the affiliates adapt the affiliate promotion program to benefit the most from the agreement they negotiate with the Forex broker.

As such, hybrid solutions between the two commission schemes are the norm. Brokers prefer to negotiate with every affiliate based on the size of their online business and the possible number of traders introduced.

The CPA seems to be favored by the affiliates, while the brokers focus more on the revenue sharing program. However, they both work in the mutual interest of the two entities, as long as there is cooperation and the will to grow the business together.

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