Commissions are an integral part of the whole affiliate marketing process. Affiliates are paid commissions for the sales that they bring to the store. Now, while setting up an affiliate program, the merchant should know the different types of commissions and how to set them up for affiliates.
Here we take a look at some of the common types of commissions that are found in affiliate programs and their examples:
Types of Commissions
Default Commission: The default commission applies to all the products and affiliates. The default commission can also be fixed with a flat rate, with the option of either applying it on each item in the order or applying it to the whole order.
All the affiliates in the program and products in the store will have the default commission rate applicable to them.
Product Commission: The product commission can be used to set different commission rates for different products or affiliates. This option can also be used to set up specific commission rates for different affiliates in the program.
For example, a 10% commission rate for affiliate A and a 15% commission rate for an affiliate B can be set using the product commissions option. Similarly, this can also be used to create different commission rates for different products in the store.
Collection Commission: The collection commission can be used to set a commission rate for a particular collection or category of products in the store.
This can be used to set, say, particular commission rates for a collection of products such as summer or winter collection of clothes.
Fixed Commission: The fixed commissions or also known as royalties can be set to give a fixed commission for an affiliate. The affiliate who has a fixed commission set up will get the commission irrespective of who refers the sale.
For example, graphic designers can awarded royalties for the sale of products that has their design on it. Such a thing can be done by setting up a fixed commission.
Setting Commission Rates
Now that we have looked at the various types of commissions that an affiliate program can have, we can also address the question of setting commission rates. It is important to include clear details about the commission that you are providing on your affiliate website. You can also explain what you want from the affiliate that registers with your program.
Commission rates need to be set with great care, if they are set too low, that will decrease the willingness of potential affiliates to join your program, and while higher commission rates will attract more affiliates, it will also eat into your margins. Researching the commission rates that are provided by your competition and what is standard in your industry can give you a rough estimate on how to choose the correct commission rate.
Commission rates can also be raised or decreased based on the performance of the affiliates, with higher rates being given as an incentive to do better. Also, different commission rates may be set for different types of affiliates based on the type of promotional content they make, their follower-ship, etc.
The GoAffPro app offers merchants with the option to set up different types of commissions such as product commission, collection commission and royalties. You get the option to set up different commission rates for any affiliate in your program as well as advanced options such as commission modifiers.