Handbook · Commission
How do you calculate a sustainable publisher commission?
A commission is sustainable when it still leaves contribution margin after returns and network fees, while being high enough that publishers prefer your program over competitors. Both conditions can be calculated.
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Two conditions that must hold at once
The first is financial: after commission, network fee and returns, a positive contribution margin must remain. The second is market-side: publishers decide by EPC — commission times conversion rate per 100 clicks. A low rate on a well-converting shop can beat a high rate on a weak checkout. Meeting only the first gives you a program nobody promotes; meeting only the second costs margin.
Models to choose from
- Flat rate – Easy to communicate but expensive: you pay the same for returning customers as for new ones.
- Differentiation by publisher type – Content and discount publishers add different value and should be paid differently.
- New-customer premium – Higher commission only for validated new customers, steering publisher effort towards growth.
- Volume or target tiers – Rising rates above defined thresholds — effective with scalable partners, more admin.
Who this page is for
- Advertisers planning a program – You are setting rates for the first time and want more than a gut number.
- Programs with weak publisher uptake – Partners don't integrate you — usually an EPC problem, not a communication problem.
- Teams under margin pressure – You need to cut rates without losing the partners that matter.
The calculation in four steps
Works for e-commerce and lead programs alike.
- 1. Margin per sale – Net basket minus goods, shipping, payment and returns handling.
- 2. Set the channel share – What part of that margin do you release for acquisition? Often 25–50%, depending on growth targets and customer value.
- 3. Strip out the network fee – Divide the available amount by (1 + override) to get the payable commission.
- 4. EPC cross-check – Commission × expected conversion rate × 100. Below competitors? Differentiate rather than raise across the board.
Commission is a steering decision
A single flat rate is convenient and almost always the most expensive route. Once you differentiate between new and returning customers and between publisher types, cost of sale usually falls while the relevant partners earn more.
Frequently asked questions about commission levels
- What is a typical affiliate commission?
- In e-commerce, 3–12% of net basket depending on margin; in lead generation, fixed amounts per qualified lead. Contribution margin matters more than the industry average.
- Should every publisher get the same rate?
- No. Different publisher types add different value; a flat rate subsidises harvesting partners at the expense of those building demand.
- When should commissions be cut?
- When cost of sale stays above target — announced in advance, differentiated, and paired with alternatives such as placements.