Let’s talk about… commission!
Commission can either be a fixed $$ amount or a percentage of the sale. It’s paid out after a sale is made (and after the refund period is over!) so you’re only paying out money after you receive the funds. Hooray!
(Although some companies will pay out a certain amount per click or per lead, those programs are more like advertising than true affiliate programs. We like to pay out once we have the money!)
My suggestions for commission your first time around:
If you have an offer that’s expensive to produce and deliver, like a physical product, go with 10%.
If you have an offer that’s high ticket and hands on, like a done-for-you service or a high-end mastermind, also go with 10% but share the amount as a dollar value. For example, instead of 10% commission on your $5k package, share that you send $500 referral commission per sale.
If you have a group program or monthly membership, go with 30% commission your first time, and if you’re going for a big launch with lots of partners, up it to 40%.
And if you’re doing a true joint-venture partnership, where your affiliate is taking this on as a promotion like it’s their own launch, then 50% commission makes sense.
Some other questions to ask yourself / discuss with your team:
What is the highest cost per acquisition you’d be willing to see?
If you run ads, what would you be willing to pay for an ad campaign to convert to a sale?
Do you have an offer ladder? Do you know your churn rate/ascension rate?
Does choosing this percentage give you a healthy profit margin above the cost to deliver your product?
Does this percentage make sense based on your brand and industry?
Would you like to have two different programs with two different commission structures, one for customers (referral program) and one for business partners (affiliate program)?
How can we make this affiliate program really attractive to our partners, while also leaving room in the budget for fun contests & prizes to really ramp up affiliate sales?
Here are example commission rates we see “in the wild”:
Based On Product Type
Physical Product | Membership/SaaS | Group Program |
10%-20% | 25%-30% | 20%-30% |
Digital Course | Mastermind | PDF/Downloadable |
30%-40% | $500-$1,000 | 50%-75% |
Based On Price/Delivery Costs
Super Scalable/Low Cost to Deliver | Somewhat Scalable/Medium Cost to Deliver | Not Scalable/High Cost to Deliver |
50%-100% | 25%-40% | 5%-20% |
At the end of the day, I’d rather not see you dwell forever on this… so pick a number that gives you a good profit margin and get to your next step! 🚀
Important!
Once you select a commission % or $ for a campaign in Rootabl, you can no longer change it.
If you made a mistake prior to your affiliates promoting, you can reach out to us to fix it for you.
If you need to update the commission amount for a brand new promotion or campaign, you'll need to create a new campaign and invite affiliates into the new agreement.