June 14, 2021

Creating a Successful Affiliate Commission Structure

If you want to make your business stand out from the crowd, you’ve probably been looking into affiliate commission marketing. It’s a great way to reach a new audience with minimal spend on marketing materials.

However, the success of your project can often depend on your affiliate commission structure. If you have low rates and disorganization, you’re unlikely to have affiliates wanting to work with you.

We’ve created this easy guide to a great affiliate commission structure to give your business the best possible chance of success.

What Is Affiliate Commission Marketing?

Affiliate marketing is a process where publishers or affiliates make money for promoting a business’s products. For example, an Instagram influencer may take a photo with a new book and include a link to purchase it. For every person who buys the book through this link, the influencer gets a commission.

The influencer market was worth $13.8 billion in 2021, so it’s no wonder affiliate marketing is so popular with brands. However, there are some essential rules to follow to ensure your commission structure is successful.

Who Are the Stakeholders in an Affiliate Commission Structure?

A successful affiliate commission structure depends on a few key players:

Seller: This is the company selling the advertised product. Your suitability for affiliate marketing depends on your product and brand reputation. For example, if your company is a clothing brand, a commission structure may be perfect for you.
Affiliate: This is the person or group who creates affiliate content for your brand. Their marketing content may involve sharing photos, videos, text, or other forms of media to reach your target audience. They might also write reviews or do v-log reveals. It’s essential to work closely with the affiliate for the most productive commission structure. They will earn money from sales of the product they are advertising.
Consumer: The most critical person is the consumer. You need to make sure the content about your brand appeals to your audience and increases sales. For this reason, it’s a good idea to review affiliate content before it’s published.

It can be difficult to manage the relationship between these clients, particularly if you are investing in many affiliates. Although basic rules like respect and fairness are crucial, there are some essential things to consider when managing your affiliate commission structure.

Top Tips for a Successful Commission Structure

Although the commission structure and style depend partly on your business, there are some key factors to consider.

Don’t Be Afraid To Seek Professional Advice

If you’re struggling to manage your affiliate marketing despite these tips, it’s often a good idea to seek outside advice.

Consider working with an affiliate management service for professional help. If you’re managing a range of affiliates, this can be the most effective way to keep the situation under control.

Communicate Regularly

One of the biggest issues that businesses face is a failure to communicate effectively. Employees who feel heard by their managers are 4.6 times more likely to feel empowered and motivated to perform well.

The same logic applies to affiliates. Although they are not employees of your company, they still work for you. Maintain clear communication so that you can quickly identify any issues and have a cordial and respectful working relationship.

Research the Rates

Finding the perfect rate for commissions can be tricky. On the one hand, you don’t want your rates to be so low that no potential affiliates want to get involved. On the other hand, if you make them too high, you will make less profit.

The best way to avoid this issue is to do your research. The standard affiliate commission rate can be anywhere from 5-30%, so you’ll want to figure out the typical going rate for your industry. Find out your competitors’ rates, make sure you know what styles of affiliate marketing work best for you, and stay up to date with the performance data of everyone working to promote your product or services.

Have a Successful Business and Commission Structure

Now that you know the best ways to manage your affiliate commission structure, you’re ready to boost your profits and grow your consumer base.

Just remember to maintain a good working relationship with all people involved in the commission structure, and you’ll be seeing your company blossom in no time.

August 21, 2023: For the Sixth consecutive year, Advertise Purple earns a spot on Inc.'s Fastest-Growing Privately Held Companies in the US. Learn more

Share

June 14, 2021

Creating a Successful Affiliate Commission Structure