Affiliate Commission Rates: How to Determine Yours in 2025

According to statistics, 81% of brands use affiliate marketing, and its popularity is due to its effectiveness and the opportunity to evaluate the campaign’s success and to pay for actual results. 

However, calculating the average affiliate commission rate can be challenging if you are considering starting an affiliate program. 

If the affiliate commission rate is too low, nobody will promote your brand, while a rate that’s too high can cause you to lose money.

Unfortunately, there is no simple, universal rule for finding the perfect affiliate commission rate for your affiliate program.

According to the affiliate marketing experts at DMi Partners, every business is unique, and there are many different factors to consider when determining your affiliate commission rates and what will work best for your budget, industry niche, and specific program.

You should also remember that the affiliate commission rate only reflects a portion of the costs you will need to spend on your affiliate program. The main goal is to get as much profit as possible, so you must track all the costs.

We hope this guide will help you set the right affiliate marketing commission rates and attract and retain the best affiliates to make your campaign successful.

What Is Affiliate Marketing?

First, let’s figure out what affiliate marketing is and how it works.

Simply put, this is a method of marketing that enables affiliates or publishers to earn a certain commission for promoting another company’s products or services.

Affiliates often choose products they use and enjoy, or they may also promote products related to their niche.

Every time the company makes a sale thanks to a link from an affiliate, the affiliate receives a commission. It’s a great way for bloggers and influencers to earn income by monetizing their reach and followers.

However, brands may also pay a commission for clicks on a link that leads to the website, for a certain number of impressions, and new leads. Given that affiliates have their unique affiliate links, the company can easily track the affiliate’s performance.

Affiliate marketing assigns the responsibilities of product creation and marketing to different parties so it enables businesses to use different professionals’ skills to constantly improve their marketing strategies, while also rewarding the contributors with a certain part of the profit.

The whole process involves three parties: the product creator and seller, the advertiser (affiliate), and the consumer. To make sure that your affiliate program will work effectively, you should understand the relationships between these parties:

• Sellers (merchants)
  Sellers, or merchants, which can be big companies or solo entrepreneurs, retailers, or product creators, don’t need to be actively involved in the marketing process. However, the brand may also be the advertiser and share revenue with those involved in the affiliate program.
• Affiliates (publishers)
  Affiliates promote products and demonstrate their advantages to persuade the audience to purchase them. Once a sale is made, the affiliates receive a percentage of the revenue. Usually, affiliates have a very specific audience, so they promote the products their audience is interested in. Therefore, brands can market their products to the audience that is most likely to make a purchase.
• Consumers
  Consumers are the main driver of affiliate marketing. Whenever consumers purchase a product, sellers and their affiliates share the profit. Sometimes, affiliates are clear about the fact that they can earn money from such sales. Consumers usually don’t need to overpay for products promoted by affiliates because the affiliate’s commission is already included in the regular price.

Managing the relationships between these three parties can be a complex operation with many moving parts. Finding and recruiting great new publishers, maintaining and strengthening relationships with all your affiliates, driving your program strategy, and evolving your commission structure and affiliate marketing percentage can be highly challenging.

If you don’t have the bandwidth to do this in-house, or you don’t have the skills to grow your program, it might be wise to consider using an Affiliate Management Agency to manage your program for you. An agency can help you run your program and provide useful insight into the best affiliate marketing commission rates and structures for your specific business.

To calculate the commission rate for your affiliate program, you should know how affiliates get paid:

Successful Affiliate Program Commission Structure

There are many online apps that enable affiliates to calculate their monthly income based on an average monthly revenue, affiliate period, commission rate, and the number of referred customers. For example, you can use an affiliate commission calculator like this one, to find the right affiliate marketing percentage for your program.

This way, you will attract more affiliates because they can determine their potential revenue quickly.

Offering a competitive commission is important, but you should also be realistic about your company’s capabilities.

For instance, Skyscanner offers a commission rate of up to 50%, but not all businesses can afford it. We also recommend that you just ensure that your closest competitors don’t offer a better commission than you.

“People often choose affiliate marketing as an additional source of income, and they may get paid in different ways. Everything depends on the goals of your affiliate program,” explains Joanna Foster, a digital marketer at an essay writing services review website, Pick The Writer.

For instance, you may pay for direct sales and different kinds of contributions to your sales. Here are the most common approaches to measuring the effect of a program and performance-based payments:

• Pay per sale/action (PPA)
  This is the most popular approach. The merchant pays a certain percentage of each sale when the purchase results from the affiliate’s efforts. Affiliates need to actually get consumers to buy a product to be compensated.
• Pay-per-lead (PPL)
  Pay-per-lead programs are a little more complicated. In this case, merchants compensate affiliates for conversions. The affiliate must persuade consumers to go to the merchant’s website and complete a certain action. For example, the end goal may be to make consumers sign up for a trial, complete a contact form, download software, or subscribe to a newsletter.
• Pay-per-click (PPC)
  In this case, an affiliate program rewards affiliates for directing consumers to the merchant’s website. Affiliates receive a commission based on the increase in web traffic.

Some companies combine different approaches and provide additional bonuses. For example, Fiverr offers $159 for first-time buyers and also uses a hybrid cost-per-action model, combining a fixed $10 commission with an additional 10% of revenue.

How Much Commission Does a Typical Affiliate Program Pay (by Rules For Rebels)?

How to Calculate an Affiliate Commission Rate

If you want to come up with an effective program, you need to do some research and consider various factors. When planning your affiliate marketing commission rates and budget, take into account the following:

• The standard affiliate commission — the percentage or flat amount your affiliates receive per action.
• Performance tiers — a certain bonus or increase in commission to encourage affiliates to demonstrate the best performance.
• First sale bonuses — fixed bonuses or an increased commission that will motivate potential affiliates to participate in your program.
• VIP commissions — not all affiliates drive the same value; some affiliates are especially valuable, so you may consider rewarding them with a higher commission rate.
• Commission for new affiliates—Your affiliates can bring you more affiliates, in which case you should offer a referral program commission.
• Recruitment incentives — there are many affiliate networks that enable you to invite affiliates. If you decide to use such a network, you should also provide additional incentives.

As you can see, there are many factors that you should keep in mind when calculating your affiliate commission.

The Easy Guide to Calculating Your Affiliate Commission Rate

Here is a step-by-step guide to will help you plan your budget and evaluate all the costs associated with your affiliate campaign:

1. Evaluate your production costs

Production costs include all the costs associated with manufacturing products, providing services, and reselling products. When calculating production costs, consider the cost of labor, raw materials, storage, supplies, packaging, utilities, delivery, income tax, software affiliate programs, etc.

The difference between your selling price and production costs should bring profit to both you and the affiliate. The margin you have to work with is the average affiliate commission rate you can consider.

2. Analyze your competitors’ commission rates

Given that affiliate programs are very popular, you need to monitor your competitors, making sure that your program is as attractive as or more attractive to affiliates than theirs.

You should try to come up with the best offers, and you won’t be able to do it if you don’t know what your competitors offer. One of the tricks that can help you learn the necessary information is creating affiliate profiles and joining their affiliate programs.

Of course, you don’t need to create an affiliate account with your real name and real website. An affiliate profile should be attractive for merchants, this is its only distinctive feature.

When researching your competitors’ programs, pay attention to their standard affiliate commission, first sale bonus, performance tiers, and other factors that we mentioned above when considering a commission rate.

Unfortunately, not all merchants are transparent and clear about these details. To get reliable information, check the merchant’s typical affiliate commission stats for 7 days and 30 days, like an average affiliate commission rate, conversion rates, average order value, and earnings per 100 clicks (EPC).

Affiliates consider all these details when choosing affiliate programs, not just the standard affiliate commission.

You can also understand your industry’s typical commission rates if you do some research. For example, these are the average e-commerce commission rates in different industries:

3. Consider what wholesalers offer

Companies like Walmart and Amazon run their own affiliate programs, and you must ensure your commission rate is higher. The chances are that many of your target affiliates already participate in wholesalers’ affiliate programs, and you should give them a solid reason to focus on your program instead.

We recommend creating an offer to benefit both affiliates and your consumers more. “Put yourself in your consumers’ shoes and think of why they would want to purchase something from you instead of some of the resellers,” suggests Essie Holland, a marketer at an essay writing services review website Writing Judge.

Besides, you should consider what motivates your affiliates to promote you over your resellers. In 2020, Amazon saw a surge in organic growth due to the Coronavirus pandemic and cut their commission rates to affiliate partners. This opened up a greater opportunity for smaller affiliate programs to attract publishers looking for better rates and increased flexibility. Keeping an eye on trends like these can help you find opportunities to market your program effectively to new affiliate partners.

4. Determine the customer’s lifetime value

Depending on your niche and your product or service type, your customers may buy your product or service repeatedly or use products and services from other brands.

One of the benefits of affiliate marketing is that after somebody makes a purchase through an affiliate program, brands can communicate with these customers directly, market, and sell to them without needing to pay an affiliate commission again.

Therefore, we recommend that you consider your customer’s potential and all the stages of the customer’s lifetime journey. Sometimes, making less profit on the first purchase or subscription makes sense if it can bring you more profit in the future.

You can calculate your customers’ lifetime value in different ways. For instance, you can multiply the average order value by the average retention time and purchase frequency.

If you know that customers will continue to buy from you directly, bringing you more profit in the long run, you may consider increasing the average affiliate commission rate by up to 50%.

The main thing is to carefully analyze your customers’ behavior and all the necessary stats.

5. Calculate the commission rate

Once you’ve gathered all the necessary data, you can make final calculations and determine your brand’s best average commission rate. Your main objective must be to ensure enough profit for your company and to devise a better offer than your competitors.

We’ve already mentioned that you should consider the affiliate program’s long-term benefits. However, you should also ensure that you won’t need to decrease the affiliate marketing commission rates in the future.

If you cannot afford an affiliate marketing percentage or commission rate that is higher than that of your competitors, you can still use various methods to attract affiliates’ attention and persuade them to give you a chance. Try to create unique incentives that offer more value than your typical affiliate commission.

Wrapping Up

Affiliate marketing is extremely popular because it benefits both brands and affiliates. Any business can create an affiliate program to increase sales and website traffic.

The success of your program, however, depends on your ability to create an attractive offer for potential affiliates. To set the right affiliate marketing commission rates, you should research your competitors, calculate your production costs, and consider your customers’ lifetime value.

We hope our guide will help you understand how affiliate marketing works and calculate the percentage and commission rate that will work best for your business.

 

References

Web Market Support – ‘Hot’ Affiliate Marketing Statistics

Rewardfule –  Affiliate Marketing Stats 2025

Writing Judge – Writing Judge

SurveySparrow – Affiliate Commission Calculator