Many of us want to jump into affiliate marketing, yet most of us don’t really know where to start. Determining a perfect niche is rather a challenging task. Some niches are too saturated, others come with very low payouts.
Today I will uncover the ins and outs of affiliate payouts in the Forex industry. Don’t get me wrong. I am not trying to convince you to enter this niche, I just want to explain the mechanics behind it.
Wait, what is FX?
In short, FX or Forex is the world’s largest financial market with around 5 trillion US dollars of daily volume. There are hundreds of different currencies in the world, and these currencies have to be exchanged every minute to keep these economies running.
By becoming a Forex trader, you will be a part of the large financial ecosystem. Well, that’s what a broker would usually tell you. This is indeed the truth. Yet most of the volume is generated by the institutions and the retail volume is just fractional.
In its essence, FX or any other type of financial trading can be associated with gambling. It is very risky and the market is in a chaotic state, so predicting it is very challenging.
Why should you still go for it? Simple. You are not becoming a trader, but an affiliate. And the payouts are great. Let’s learn a bit more about those.
Affiliate payouts in Forex
There are several available compensation schemes for affiliates. Let’s tackle those in terms of popularity.
Introducing Broker / Revenue Share
This scheme is typically offered by high-end brokers. These companies have existed for decades and have exceptional branding. The compensation scheme is quite simple. The larger the volumes you bring in, the higher your compensation is.
Typically a broker earns on the spreads. When taking a look at Admiral Markets Forex conditions, we can see that the spreads vary between 1 and 2 pips. Let’s not go deep into the details, but this means that a trader would need to pay between $10 and $20 per each $100,000 traded.
This may not sound like a lot, but in fact, a good trader can generate a volume of $1,500,000 monthly. Hence, if you refer traders under an introducing broker agreement it is possible to earn around $150 – $300 per month per trader. A pity is that the lifetime of a trader is quite short.
Cost Per Acquisition (CPA)
Abbreviated to CPA, this type of a commission became available to FX affiliates only a few years ago and is still not offered by all brokers. Usually, most of the newcomers will offer CPA to affiliates.
How does it work? Once an affiliate sends a trader, a trader is expected to generate a minimum of volume. Once this is met, an affiliate receives a sum from $150 to $1000, depending on various factors: the size of a deposit and the trader’s location are the most influential factors.
The best thing about this compensation scheme is that an affiliate gets paid straight away. No need to wait. A fat payout comes your way nearly instantly.
This is what brokers call a combination of Revenue Share and CPA commissions. Hybrid compensation means that you get the best of both worlds. An affiliate is compensated via revenue share and CPA schemes simultaneously.
However, an affiliate should expect both the resvenu share and the CPA to be half as much as paid under non-hybrid plans.
Cost Per Lead
Abbreviated to CPL, this commission structure is great because it does not require a trader to deposit. As long as you send people that just register, you will be compensated. However, the compensation is rather small and ranges between $5 and $25 per lead. This is, perhaps, the least popular way to compensate affiliates in the FX industry.
What are the Expected Returns?
It is pretty hard to forecast the income here. FX trading is not a consumer product, it is not a certain human need and the demand for it is rather small. I do often have months when my affiliate income is around $0. However, sometimes it can reach a thousand per month.
What I can surely say is that your income heavily depends on your promotion. Typically, affiliates who do Search Engine Advertising and Display Media Buying are generating higher revenues than the affiliates that do SEO.
However, media prices in FX are sky high and, sometimes, advertising costs can account for most of the margin. You can preview some of the disclosed earning here, but the information is a bit dated.
Where to Start in FX Affiliate Marketing?
If you are into online marketing, but are not familiar with the FX industry, I would not recommend to go big on it. The best idea would be to just sign up with one of the brokers and simply place an advertising unit on your site(s). See where it gets you.
If you don’t really have any web properties, I’d suggest to prepare a small landing page with a tiny email drip campaign and invest $300 – $500 into advertising. By referring a trader or two under CPA commission scheme you will already break even.
You might also want to check this social media guide for the FX industry.
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