I just read that AdultProfit is closing their affiliate program at
https://gfy.com/showthread.php?t=970916. It seems like more and more are closing down.
I am not surprised. If you run your own affiliate program, I urge you to take a closer look at your numbers and the practices of others.
We stopped taking on new affiliates to our affiliate program 2 weeks ago because of the expense that it took to run, the incredible amount of fraud, the huge payouts we had to make just to compete, and the general unreliable traffic we were getting (A webmaster could send us good traffic today, but change their mind and send it to our competitor tomorrow).
Just to compete, we were forced in to offering 50% Pay per sign-up which was a loss-leader. After the cost per transaction, payout to the chat model content owners, we would actually lose as much as $25.00 on every $100 sale in hopes of keeping the customer around later.
This method is very dangerous especially for small businesses. It almost worked, until the fraud was factored in. The more we were paying out (we started at 20% and bumped it up over time), the more fraud we got. 50% just seemed to invite all the shitheads out of the wood-work.
This doesn't mean of course that affiliate programs are a waste. What you want to do though is carefully go over the real cost of your own affiliate program. Don't guess at your numbers. If you "bet" on recurring sales to make a profit, try it out, but check your stats closely to make sure your bet is actually paying off for you. Yes it may mean lower payouts for affiliates but it will also mean better health for your business.