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What Commission Rate Do You Recommend I Set For Affiliates?
What Commission Rate Do You Recommend I Set For Affiliates?

Commission rates are your affiliate’s rewards for doing the hard work.

Nick Castellano avatar
Written by Nick Castellano
Updated over a week ago

The very broad average affiliate commission rate for merchants using Refersion is between 10-20%. Most businesses start on the low side and raise their commission rates as the company grows. You want a rate that is enticing to potential affiliates but also affordable to your business.

In general Refersion does not have a recommended commission rate. There is no golden rule for this question because it will depend on a lot of things: your profit margins, if you're already offering discounts, the value you're placing on your affiliate program, etc. However, here are some tips to help you decide on what number is right for you.  

  1.  Take a look at the commission rates offered by competitors and similar companies in your industry. Try to stay competitive and offer a commission rate that is either the same or slightly above average for your product sector.

  2. Understand your cost of goods sold and profit margins. If the margins on each one of your sales is high, it could be beneficial to offer a higher rate to affiliates in order to maximize revenues. 

  3. Have a good sense of your customer acquisition costs through channels other than affiliates. Try to structure your affiliate rates based on those numbers. 

  4. Don’t start too high! Setting your commission rate too high gives you very little flexibility. If you ever need to lower your commission rate due to costs, then that may look bad to your affiliates. Bonuses our tiered commission structures are also scenarios to be considered. It is worth rewarding those who deserve it? You can either setup a tiered commission structure or establish a bonus tier system for your affiliates instead of offering maximum commissions to your affiliates from the start.

Typically there is no one-size-fits-all solution for commission rates, so Refersion allows you to customize your commission offerings. You can create multiple offers so that you can award different commission rates to different groups of affiliates. You can also set per-product commission rates if needed.

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