Commission
A commission is the compensation paid to affiliates for successful promotional activities. It represents the core financial incentive in affiliate marketing relationships and can be structured in various ways depending on business goals and industry standards.
Commission Structures
Percentage-Based Commission
- Fixed percentage: Same rate for all affiliates (e.g., 20% of sale)
- Tiered percentage: Rates increase with performance levels
- Product-specific: Different rates for different products
- Customer-lifetime value: Based on total customer value
Fixed Commission
- Per-sale amount: Set dollar amount per conversion
- Per-lead payment: Fixed amount for qualified leads
- Per-action fee: Payment for specific actions (sign-ups, downloads)
Hybrid Models
- Base + performance: Minimum payment plus performance bonuses
- Recurring commissions: Ongoing payments for subscription customers
- Lifetime commissions: Payments for the entire customer lifetime
Industry Benchmarks
SaaS Commission Rates
- Project management tools: 20-35%
- CRM software: 25-40%
- Marketing tools: 20-30%
- Analytics platforms: 15-25%
- Development tools: 25-35%
Factors Affecting Commission Rates
- Average deal size: Higher value = lower percentage
- Customer lifetime value: Higher LTV = higher commission
- Market competition: Competitive markets = higher rates
- Affiliate quality: Top performers may negotiate higher rates
Commission Tracking
Attribution Methods
- First-click: Credit to first affiliate interaction
- Last-click: Credit to final affiliate interaction
- Multi-touch: Credit distributed across multiple touches
- Time-decay: More recent interactions get more credit
Payment Schedules
- Immediate: Instant commission upon conversion
- Net-30: Payment 30 days after conversion
- Monthly batches: Bulk payments once per month
- Threshold-based: Payment when minimum amount reached
Optimizing Commission Structures
For Merchants
- Start competitive: Research industry standards
- Test and adjust: Monitor affiliate acquisition and retention
- Consider tiers: Reward top performers with higher rates
- Factor in LTV: Align commission with customer value
For Affiliates
- Compare programs: Don't focus solely on commission rate
- Consider conversion rates: High-converting offers may be better
- Factor in support: Good merchant support increases success
- Evaluate payment terms: Faster payments improve cash flow
LinkJolt Commission Features
- Flexible structures: Percentage, fixed, or hybrid models
- Real-time tracking: Instant commission visibility
- Automated calculations: No manual commission computing
- Fast payouts: Direct Stripe Connect transfers
- Performance analytics: Detailed commission reporting
- Fraud protection: Secure commission attribution