Skip to main content

Explanation for downline commission calculation with example

Updated over 2 years ago

The "Downline Commission Structure" outlined in the given title refers to the commission system used in multi-level marketing or affiliate marketing programs. In this structure, affiliates who have recruited other affiliates into their downline will earn a commission based on the net profit generated by their downline affiliates' activities.

Here's a breakdown of how the commission is calculated:

  1. Net Profit: It is calculated by subtracting various deductions from the total customer win/loss. The deductions include 18% of the total customer win/loss, any bonuses given to affiliates, and payment fees (2% for deposits and 1.5% for withdrawals).

  2. Upline Commission: The upline affiliates, who have recruited and sponsored other affiliates into the program, will earn a fixed rate of 2.5% of the net profit generated by their downline affiliates.

To illustrate with an example:

Let's say Downline Affiliate A generates $10,000 in customer win/loss.

Net Profit = $10,000 - 18% Deduction - Bonus - Payment Fee

Suppose the deductions amount to $2,000 (18% of $10,000), there is no bonus, and the payment fee is $150 (2% of $7,500 in this case, assuming $2,500 were withdrawn).

Net Profit = $10,000 - $2,000 - $0 - $150 = $7,850

Now, the Upline Affiliate, who sponsored Downline Affiliate A, will earn a commission of:

Upline Commission = $7,850 * 2.5% = $196.25

So, the Upline Affiliate will receive a commission of $196.25 from the activities of Downline Affiliate A.

Did this answer your question?