How to Calculate the Potential Affiliate Revenue for Your Website

Ever wondered how much money your website could make from affiliate marketing? If you're looking at ways to monetise your website, our guide on how to calculate the potential affiliate revenue for your website will help you decide if promoting affiliate products is a viable source of residual income.

After reading this guide you'll have a much better idea of how your website traffic might convert into cold hard affiliate cash.

You'll find out how to determine your conversion and click-through rates, and you'll also discover how refunds might affect your bottom line. In short, this guide should give you all the information you need to make a relatively accurate estimate of how much affiliate revenue your website is likely to generate.

What is affiliate marketing revenue?

What exactly is affiliate marketing revenue? To put it simply, it's the money you earn by promoting a product or service made by another retailer or advertiser, often referred to as a "vendor".

How the affiliate model works

The affiliate partner (you) is paid a certain amount of money for referring customers to the vendor.

As an affiliate, you typically get paid for a sale, but some affiliate programs reward you for leads, free trial signups, app downloads or even sometimes just clicks to the website. For the purpose of this guide on how to calculate the potential affiliate revenue for your website, we'll assume that you get paid for each sale.

Which affiliate products should I sell?

Obviously, that depends on what type of website you have.

If you have a blog about the latest gadgets and technology, you probably wouldn't generate much affiliate revenue if you promoted clothing and fashion accessories. Likewise, if you own a fashion ecommerce store then blogging about retro video games isn't likely to generate much revenue either.

Whatever you decide to promote on your website, it's essential that it resonates with your target audience. The greater the synergy between your visitors and the affiliate products and services you promote, the more money you're likely to make.

How to find the best affiliate products to sell

Finding the best affiliate programs for relevant products and services is key to succeeding in affiliate marketing. There are tens of thousands of high-paying affiliate programs you can join for free, and here are some of my favourite ways to find them:

• Google search
• Affiliate directories
• Competitor affiliate links
• Affiliate networks
• Facebook groups

A simple Google search for "affiliate program" + "your niche / specific product" is likely to yield a ton of great results. For example, if you search for "affiliate program image optimisation plugin", you'll see a link to ShortPixel's affiliate program near the top of the page.

Simply sign up for a ShortPixel affiliate account, create a Tiddly account, copy and paste your shortened affiliate links into your web pages and get 30% of all new sales (including recurring income)!

Calculating the potential affiliate revenue for your website

1. Determine website traffic

You can promote the most amazing products and deals on your website, but if it receives no traffic then it simply won't generate any money from affiliate marketing. The opposite isn't always true of course – your website can receive floods of traffic and still make very little money from affiliate commissions – but it will probably make some money. Affiliate marketing is mainly a numbers game; get enough people through the door and there's every chance that somebody will buy what you're promoting.

So how do you work out how much traffic your website is getting each month?

If you have an established website that contains quality content and has backlinks pointing to it, it's probably getting a decent amount of traffic already. If you have Google Analytics installed (and you really should have), then working out your monthly traffic is relatively straightforward.

In Google Analytics 4, select the appropriate account and property and choose a date range (such as the previous month). Then visit Reports > Acquisition > Acquisition Overview and make a note of the number of users who visited your site during the selected time period. As an example, we'll say that our site received 12,000 visits the previous month.

To get a three-month average of the number of visitors to your site, simply repeat the process for the previous two months. Once you have the number of visitors for each month, add them together and then divide the total by three to get a three-month average. In this case, we'll say that our site has received an average of 10,000 visitors per month for the last three months.

For this guide, I've assumed that the affiliate link is a site-wide link that appears on most pages. If your affiliate link only appears on a handful of pages – such as a few blog posts – then you would need to work out how much traffic those pages receive each month.

2. Estimate click-through rate (CTR)

This is where link shorteners like Tiddly really come into their own. Every click on every link shortened by Tiddly is tracked, enabling you to measure the effectiveness of your affiliate marketing campaign with far greater accuracy.

Along with the total number of clicks for each link, Tiddly provides a wealth of additional information such as visitor location and language, browser, operating system and referral source. Nothing is a mystery with links shortened by Tiddly.

With Tiddly, calculating the CTR for each link is easy. From your dashboard, visit the "Links" section, click the three dots next to the link you want to analyse and then click "Statistics". You'll be sent to a page containing valuable information about your shortened link. Simply choose a date range that matches the dates you specified in Google Analytics and you'll instantly see how many clicks your affiliate link received during that timeframe.

As an example, we'll say that our affiliate link receives an average of 300 clicks per month – a click-through rate of 3%. Using this as a base, we know that if we can get 20,000 visitors to our site each month, our affiliate link should be clicked approximately 600 times per month. If we get 40,000 visits, our link should receive around 1,200 clicks, and so on.

Don't forget: the click-through rate of your affiliate links will depend heavily on the type of links you’ll be using (banners, text links, buttons, etc). It's definitely worth A/B testing your links to find out which type works best on your website.

If your website is powered by WordPress, I highly recommend using the If-So WordPress plugin to help you split-test your links. It's an awesome plugin and offers a wealth of additional features including conditional content display, dynamic keyword insertion, website personalisation and more.

3. Estimate affiliate conversion rate (CR)

Now we know how many times our affiliate link gets clicked each month, we need to know what percentage of those clicks turn into orders on our affiliate's site.

Over time, you'll get a good idea of how well each particular product converts as you send more and more traffic to your affiliate partner's website. However, at the start your only source of this information will be the affiliate themselves.

The product vendor really should know what percentage of affiliate visits convert into orders, so it's definitely worth asking. They might not tell you, but if you don't ask you don't get.

As a rule of thumb, the average conversion rate for most online products is around 2-4%, so we'll say that 3% of the people who click on our affiliate link go on to purchase the product. This means that of the 300 people who click on our affiliate link each month, nine end up purchasing the product.

4. Estimate average order value

We now know that for every 10,000 visitors our site gets, approximately nine people will purchase a product via our affiliate link. And now that we have that information, we're much closer to working out how much potential affiliate revenue our website will generate each month.

The next thing we need to do is work out the average order value (AOV) on our affiliate partner's website.

Again, the best source of this information is your affiliate partner. Larger companies almost certainly won't provide you with this information, but smaller ones may well do.

If you only promote digital products, it's likely that the people you refer will only buy one item each time. However, if you promote physical products the vendor may well have implemented upselling and cross-selling into their checkout flow, potentially resulting in far greater order values.

For the purpose of this article, we'll imagine that our affiliate partner's AOV is $30. This means that our nine affiliate orders each month total approximately $270.

5. Determine affiliate commissions

Different products will have different commission percentages. Some vendors will pay you a flat rate or percentage per sale. Some will have performance tiers, where the best-performing affiliates will earn a higher percentage or flat rate for each successful order. Sometimes you'll even receive a "first sale bonus", where you'll get double or even triple the commission on sales for the first 30 days.

Although affiliate rates vary wildly from vendor to vendor, this is the easiest value to calculate. After all, you shouldn't be spending your time promoting any product unless you know exactly how much your're going to receive for each successful referral.

As a rule of thumb, you'll receive anything from 10–50% of the price of the product for each customer you refer. Using that as a guide, we'll say that our imaginary affiliate website will get 30% commission per sale.

6. Calculate the total projected affiliate revenue

We now have all the information we need to estimate how much revenue our website is likely to generate from affiliate sales.

At this point, it's worth mentioning again that the amount of money your website makes from affiliate marketing will always be highly contingent on a number of program-specific metrics, as well as on-site factors such as the quality and relevancy of your content, the nature of your audience and how effectively you promote your affiliate offers.

This is only an estimate – and a tentative estimate at best – but it should at least give you some idea of how much affiliate revenue you can expect your website to generate.

Using all of the above information, we arrive at the following calculation:

• Traffic: 10,000 x 3% (CTR) = 300
• Sales: 300 x 3% (CR) = 9
• Earnings: 9 x $30 (AOV) x 30% (comm) = $81

As you can see, our imaginary affiliate website generates approximately $81 for every 10,000 visitors received. It's nothing to write home about, but if our example affiliate website were to get 60,000 visitors per month, then in theory the site should generate approximately $500 in affiliate revenue each month – not a bad residual income.

Reversal rate (RR)

If you want an even more accurate estimate of the potential affiliate revenue for your website, you may want to consider plugging the vendor's reversal rate (RR) into the affiliate revenue formula.

The RR is the percentage of affiliate-referred transactions that get reversed by the merchant. Unfortunately, in many cases you won't know the reversal rates prior to actually joining and experimenting with an affiliate program. However, some affiliate networks such as AvantLink and ShareASale do provide data on this important metric before you sign up to an affiliate scheme.

As an example, we'll say that the vendor of the affiliate product we're promoting has a reversal rate of 10%. Plugging that into our formula, we arrive at the following:

• Traffic: 10,000 x 3% (CTR) = 300
• Sales: 300 x 3% (CR) = 9
• Earnings: 9 x $30 (AOV) x 30% (comm) - 10% (RR) = $72.90

Allowing for the inevitable refunds (and even fraudulent payments), we get a better idea of how much money our website is likely to generate from affiliate sales.

Earnings per click (EPC)

Earnings per click (EPC) is an affiliate marketing metric that indicates how much money you'll make each time someone clicks on one of your links. While it doesn't tell you the whole story (as it's an average calculated across all affiliate activity within the program), it's a metric worth considering when you're deciding which products and services to promote.

To calculate your personal projected EPC, you need to divide your earnings by the amount of traffic you send to the vendor's website. So in the case of our imaginary affiliate website, the EPC calculation would be as follows:

$72.90 / 300 = $0.24

Another way of looking at it is to calculate the EPC per 100 clicks. To calculate the EPC per 100 clicks, simply adjust the formula like so:

$72.90 / 300 x 100 = $24.30

How much traffic does a website need to make money from affiliate marketing?

As we mentioned above, it will vary considerably from website to website. However, it's generally accepted that a website needs at least 10,000 visitors per month in order to start making a reasonable residual income from affiliate marketing.

There's nothing to stop you adding affiliate links to your website as soon as it goes live – just don't expect to start seeing much/any revenue until your monthly visitor count hits six figures.

How much does it cost to start an affiliate business?

You can easily start an affiliate marketing business for free; in fact, many successful affiliate marketers don't even own a website!

Essentially, all you need is an affiliate account with the vendor, a place to post your links and a bank account to accept payments. Of course, you'll need to register as a business with your local tax authorities, but in terms of up-front costs, setting up as an affiliate marketer is one of the quickest and cheapest ways to start an online business.

As you start to make money you may want to build a website and start a blog, but that's also easy to accomplish with free software and cheap shared hosting.

10 Ways to increase your affiliate income

There are a number of ways to help increase your affiliate income, such as:

1. Adding comparison tables;
2. Linking images to affiliate products;
3. Adding CTA boxes and/or buttons;
4. Choosing the right products;
5. Providing useful information;
6. Optimising your content;
7. Using video and rich media;
8. Implementing split testing;
9. Creating a blog; and
10. Ensuring that there's some synergy between your affiliate products.

Closing thoughts

Hopefully this guide on how to calculate the potential affiliate revenue for your website has given you a better understanding of how valuable your website's traffic could be.

It never ceases to amaze me how many high-traffic websites I come across that don't have a single affiliate link on their site. They're totally leaving money on the table.

If you have a website – particularly one that gets a decent amount of traffic – do yourself a favour a explore the possibility of monetising it with affiliate links. It might just be the best decision you've ever made.