Many merchants who are thinking about starting affiliate programs for their store, as well as people who are interested in becoming affiliates, are always wondering how affiliate commissions work and how are they set up?
While starting an affiliate program for a merchant and joining an affiliate program for an affiliate can be easy, it is important to understand how the affiliate commissions work, as it is an essential part of the affiliate program. In the case of the merchant, there is also the added responsibility to set up and manage commission rates for their affiliate program.
Here we take a look at how the affiliate commissions work and all the details that relate to it:
How Affiliate Commission Works
Affiliates earn a commission if the customer either uses their referral link or the coupon code that encourages customers to visit the merchant’s store and purchase. There are now different types of affiliate marketing models where affiliates can pay for the number of visits that take place using their referral or the number of sales that customers place using their referral.
These commissions are credited to the affiliate after the sale or visit is made. The commission then adds for each subsequent referral, and the merchants then pay the affiliate based on the payment terms for the program. In other words, the merchant pays the affiliate for bringing customers to his store.
Setting the Commission Rate
Now, the setting up of the commission is an important part of running an affiliate program, merchants need to maintain competitive rates to compete with the competition. There are different types of commissions that merchants can set up for their affiliate program.
In the case of GoAffPro, a merchant has various options to set up different types of commission.
Default Commission: it is the Commission which, by default, applies to all affiliates and products in the store. This provides a single go-to option to merchants if they want to have a single commission rate set for everyone in the program.
Product Commission: Here, a merchant can set different commission rates for different products in the store, allowing more versatility for merchants who can, for instance, adjust the commission rate for a product that they want affiliates to promote more by setting a higher commission rate for it. This can also be used for setting a different commission rate for a particular affiliate by selecting an affiliate and setting the commission rate to be applied to all products for that particular affiliate.
Collection Commission: This can be used to set a commission rate for a specific range or category of products. If, for example, the merchant has accessories for the product, but wants to have a lower commission rate for them, as the accessories margins are already less, thus, this type of commission can be used where a single commission rate can be set for the entire collection or category of products.
Fixed Commission: This type of commission is also referred to as royalty, which can be for an affiliate to receive a fixed commission for the sale of a product, irrespective of which affiliate refers to the sale. Thus, in addition to the affiliate which referred to the sale receiving the commission, the affiliate which is appointed to the fixed commission for the product will also receive the commission. A good example of the use case of a fixed commission can be graphic design or a t-shirt made by a designer, who can then earn royalties using a fixed commission for each t-shirt with its design that is sold.
There is also the Commission Modifier option, which allows further customization of how commission rates can be set for the program, by using the Commission Modifier function, merchants can set different commission rates for the first-time customers, for customers in a particular country or products with a common name. These options can be used to make it very easy to handle different types of commissions for different products.
In conclusion, it is important to note that the timely payment of the affiliate commission is quite important for merchants as it establishes a good merchant-affiliate relationship and improves the loyalty of the affiliate. Also by offering rewards such as commission boosters as a bonus for good results will go a long way in making an affiliate program run smoothly.
Checkout all of these options and take your affiliate program to the next level by using these commission customization option in the GoAffPro app.