Commission

What is Affiliate Commission?

TL;DR: Affiliate commission is the money affiliates earn for referring customers. It's typically 15-30% for SaaS products, paid when referred customers make purchases. Commission can be one-time or recurring for subscription products.

Quick Answer

Affiliate commission is the compensation paid to affiliates for successful referrals. When someone clicks an affiliate's link and makes a purchase, the affiliate earns a percentage of the sale (e.g., 25%) or a fixed amount (e.g., $50). For SaaS products with subscriptions, commissions can be recurring—paid every month the customer stays subscribed.

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How Affiliate Commission Works

The Commission Flow

1. Affiliate promotes → Shares unique tracking link
2. Customer clicks → Cookie tracks the referral
3. Customer purchases → Sale attributed to affiliate
4. Commission calculated → Based on agreed rate
5. Payment processed → Affiliate receives payout

Commission Calculation Example

Sale Amount	Commission Rate	Affiliate Earns
$100	25%	$25
$500	20%	$100
$99/month	30% recurring	$29.70/month

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Types of Commission Structures

Percentage-Based Commission

The most common model—affiliates earn a percentage of each sale.

• Fixed percentage: Same rate for all (e.g., 25%)
• Tiered rates: Higher rates for top performers
• Product-specific: Different rates per product

Best for: SaaS, digital products, high-margin items

Fixed Commission

A set dollar amount per conversion, regardless of sale value.

• Per-sale: $50 for each purchase
• Per-lead: $10 for each qualified sign-up
• Per-action: Payment for specific actions

Best for: Lead generation, high-ticket items, standardized products

Recurring Commission

Ongoing payments for subscription-based products.

• Lifetime recurring: Earn while customer stays subscribed
• Time-limited: Earn for first 12 months only
• First payment only: One-time on initial subscription

Best for: SaaS products, subscription services, membership sites

Hybrid Commission

Combines multiple models for flexibility.

• Base + bonus: Flat rate plus performance incentives
• Fixed + percentage: Guaranteed minimum plus percentage
• Tiered hybrid: Rates increase with volume

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Average Commission Rates by Industry

Industry	Typical Rate	Notes
SaaS Products	20-30%	Often recurring
E-commerce	5-15%	Physical products
Digital Products	30-50%	High margins
Financial Services	$50-$200 fixed	Per approved application
Web Hosting	$50-$200 fixed	Competitive market
Online Courses	30-50%	High-ticket items

SaaS-Specific Benchmarks

Product Type	Commission Range
Project management	20-35%
CRM software	25-40%
Marketing tools	20-30%
Analytics platforms	15-25%
Developer tools	25-35%

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Factors That Affect Commission Rates

Product Factors

• Profit margin: Higher margins allow higher commissions
• Price point: Lower prices often mean lower percentages
• Customer LTV: High LTV justifies higher acquisition costs
• Refund rate: High refunds may lower effective commission

Market Factors

• Competition: Competitive niches need higher rates
• Industry norms: Stay within expected ranges
• Affiliate supply: Scarce affiliates command better rates

Performance Factors

• Volume tiers: Reward top performers
• Quality metrics: Bonus for high-converting traffic
• Exclusivity: Higher rates for dedicated partners

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Commission Attribution Methods

Last-Click Attribution

Credit goes to the final affiliate link clicked before purchase.

• Pros: Simple, clear accountability
• Cons: Ignores awareness-building affiliates

First-Click Attribution

Credit goes to the first affiliate who introduced the customer.

• Pros: Rewards discovery
• Cons: May miss closing influence

Multi-Touch Attribution

Commission split between multiple affiliates in the journey.

• Pros: Fair to all contributors
• Cons: Complex to implement

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When Do Affiliates Get Paid?

Payment Schedules

Schedule	Description	Best For
Immediate	Paid upon conversion	High trust programs
Net-15	15 days after month end	Standard practice
Net-30	30 days after conversion	Allows refund window
Threshold	When minimum reached	Smaller payouts

Typical Payment Thresholds

• $50: Most common minimum
• $100: Standard for larger programs
• $25: Affiliate-friendly programs
• $0: No threshold (rare)

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FAQ

What is a good affiliate commission rate?

For SaaS products, 20-30% is standard. Consider your customer lifetime value—if LTV is $2,000, paying 25% ($500) on a $100 first sale still leaves significant profit.

Should I offer recurring or one-time commissions?

Recurring commissions attract serious affiliates who build long-term strategies. One-time is simpler but may attract lower-quality promotion.

How do I calculate what commission rate I can afford?

Use this formula: Maximum Commission = (Customer LTV × Acceptable CAC%) - Platform Costs. If LTV is $1,000 and you're willing to spend 30% on acquisition, max commission is ~$300.

Can commission rates be negotiated?

Yes, top-performing affiliates often negotiate higher rates. Many programs offer tiered commissions that automatically increase with volume.

What's the difference between commission and revenue share?

They're often used interchangeably. Technically, "commission" implies performance-based payment, while "revenue share" can include ongoing royalties regardless of direct referral.

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Calculate Your Affiliate Commission

Use our free calculator to model different commission structures:

Affiliate Commission Calculator →

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LinkJolt Commission Features

• ✅ Flexible structures: Percentage, fixed, or hybrid
• ✅ Recurring commissions: Automatic monthly calculations
• ✅ Real-time tracking: See commissions instantly
• ✅ Automated payouts: Direct to affiliate bank accounts
• ✅ Fraud protection: Secure attribution
• ✅ 0% platform fees: Keep more of your revenue

Set Up Your Commission Structure →