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How to Choose the Right Affiliate Commission?

Last updated on February 23, 2021

Everything else is set but yet to decide how I’m going to set the commission rate of my affiliate program. Sounds like you?

Not just you but any other WooCommerce store owner who is getting started with their affiliate program could be stuck at this one particular point.

So, how do you exactly decide on the right affiliate commission rate?

This article will take you through everything you need to know to set that perfect strategy on your WooCommerce store. Let’s get started.

Factors to consider for choosing the affiliate commission rates for your affiliate program

Five major actors that can have a big impact –

1. Your costs

Do you deal in physical products where the cost of production is high or do you deal in digital services where the profit margin is anyway great?

While digital courses/software may allow you to pay a hefty commission to your affiliates, other commodities that have higher overhead costs will comparatively allow lesser pay.

Thus, you can zero down on the commission rate as per the calculations that neither let your affiliates feel underpay or even make a hole in your own pocket.

2. What are your competitors doing?

The idea is not to copy here but to learn from the competitors.

Take advantage of their experiences and observe their pricing structure for the affiliates.

Since they’re someone who has a similar business model (more or less), you can look up to them to decide commission rates for your affiliates.

3. Your market and niche

In a monopoly market, you will have an opportunity to be flexible with your rates while in a saturated market, you can’t help but offer high commission rates to fight the bigger competition.

Also, if you sell micro-niche products/services, you will have to offer attractive commissions to reach enough potential buyers. Contrary to this, macro niche product affiliates wouldn’t demand such a high commission.

4. Step into the shoes of your affiliate

If you were an affiliate you’re planning to hire, what could be your ideal incentive for the efforts you are going to put in? What kind of a commission would keep you motivated to sell as much as you can?

Other than this, any affiliate would like to go for a business that is generally doing well or a product that is converting easily.

Here, the commission could be low but even affiliates know that the number of transactions will compensate for the low commission rate.

5. Go beyond the prices

As they say, every business is different. So, go beyond the point of comparing prices with everything and jot down a broader perspective keeping in mind:

  • Your product details
  • Your sales strategy
  • Your program’s unique point

Be open to experiments and learning from your mistakes. Because more than anything else, it is your trial and error strategy that will evolve the best commission rates for your affiliates.

Change the plan if it’s not working!

Commissions need not be those fixed rates you never change. As we already discussed, the trial and error method will help you find your best rate.

If you’re looking for a plugin that is credible as well as offers you the most important and diverse features, Affiliate for WooCommerce would be the best fit for your affiliate program.

An easy, jargon-free and powerful plugin that:

  • Runs everything automatically and smartly
  • Creates versatile commission plans
  • Lets the affiliates register, generate links and track their progress themselves
  • Provides unlimited affiliate links, visits
  • Lets you create different marketing campaigns – different product media, swipe files, etc.
  • Runs with no slowdowns, works on shared hosting with efficient code quality
  • Automatically turns all of your visitors/customers into affiliates
  • Shows real-time stats and advanced reports

With these features and credibility of being built by the leading WooCommerce.com Extension developer, Affiliate for WooCommerce can help you run a super successful affiliate program for your WooCommerce store.

Coming back to the commission rate discussions.

Affiliate for WooCommerce’s jaw-dropping commission system

affiliate commission plans

The plugin gives you an opportunity to set the most diversified rates based on:

  • Product
  • Product type
  • Product price
  • Affiliate tags
  • Number of orders
  • Referrals
  • Taxonomy
  • Quantity

It wouldn’t be an overstatement to say that this is the only system that allows you to set commission rates based on so many factors and gives you a chance to explore with your commission plans.

Let’s dive deep into this treasure box to understand what all kinds of plans you can set:

1. Product-based commission

affiliate commission based on product

This is undoubtedly one of the most preferred commission plans.

For example, if William is into promoting your best-selling product more and Sophia is uplifting your lowest selling products by focusing more on them, both of them deserve the commission based on the Product and not on the price.

2. Commission based on the Price of the Product

Suppose, Maria is reaching out to the potential consumers and selling them only your premium product plan. So, even if she is making a few sales but only taking the big shots, she deserves the commission according to the value of the product here.

3. Affiliate-tag based commission

affiliate commission based on tags

When you start your affiliate program full-fledged, after a while, you will be in a position to identify who is your star performer, who is performing extraordinarily and who isn’t bringing you enough sales.

You can segregate such entries by giving them specific tags like ‘Gold’, ‘Silver’, ‘Star Performer’, ‘Active Performer’, ‘Dormant’ and such.

So when you will be restructuring your price modules, you can set a condition and instantly change/raise the commission rate of these people according to their tags. This will save you that tedious process of going through every entry and changing their commission.

4. Product taxonomy based commission

You could be having an affiliate who is good at selling Travel Necessities while another one being great at selling seasonal goods.

In such cases, they are entitled to rewards based on such product categories.

5. Product-type based commission

It would be best to draw a commission rate where the physical product promoters don’t feel absolutely underpaid or where you don’t end up paying some unbelievably high amount to digital product promoters.

6. Commission based on product quantity

In this type, you pay your affiliates on the number of products they manage to sell.

On some special occasions like festivals, holiday season or new product launch, the affiliate wouldn’t mind getting you more sales for extra incentives.

7. Commission based on total orders/customers of an affiliate

Set some amazing offers for your affiliates where they can earn commissions on a specific number of orders placed or win a bonus on completing the target of some specific number of customers.

This commission plan can set your affiliate program on fire and bring out some best performances.

Note: Product Type, Price, Quantity, Taxonomy and Total Referrals based commission plans are in pipeline and will be made live soon. Being said that, you can leverage the rest of the commission plans till then.

Get Affiliate for WooCommerce plugin

Here’s the last say

Affiliate marketing is an exciting opportunity and how well you play with your affiliate commission offer strategy will take your game to the next level.

We hope this article helped you understand how you can achieve that. If you still have something on your mind to clear, feel free to drop your questions in the comments below.

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