Commissions on sales for affiliate links vary widely, but they average around 5 percent. After SkimLinks cut, that'd be 3.75 percent (although SkimLinks says they can sometimes negotiate deals that would keep the percentage closer to the original number).So, Pinterest has 10 million users. Let's say that the average across all of them is that they buy items valued at $10 in a month through affiliate links on Pinterest. That's $100,000,000 of sales for which Pinterest would get credit. That's $3.75 million in monthly revenue, or $45 million of annual revenue.
Is that going to make you the next Facebook? It doesn't look like it when your user base is 10 million. But what about when the site has 100 million users? Assuming revenue scales linearly, affiliate revenue would stand at $450 million. And if the site had 800 million users like Facebook? That revenue would go to $3.6 billion, just $100 million less than Facebook's 2011 haul.
Craver's Garden is a compilation blog of all Douglas Craver's current business projects and collaborations he is growing. You can reach Doug at dougATlaunchtribe.com or 434-272-8374.
Tuesday, February 21, 2012
Why Pinterest Is Playing Dumb About Making Money - Alexis Madrigal - Technology - The Atlantic
via theatlantic.com
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