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3 simple commission structures (for new brands)

Did you know? 80% of brands use affiliate programs. Yet, managing them can be time-consuming and complex. Set up a simple commission structure for program may lower your workload significantly.

So, here are tips to simplify your commission structure and 03 examples for you. Let’s dive in!

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What is a simple commission structure?

A commission structure in an affiliate program is the system that defines how affiliates are rewarded for driving sales, leads, or specific actions. There are types of commissions, including one time commission, flat-rate commission or lifetime commission and more. Many big brands mix various the commission model to optimize their profit, but it is not all the time necesssary. There are simple commission structures that are an easy-to-understand and you can literally set them up in less 10 minutes.

For example, Flat Rate Commission is one of the most common and simple commission structure. In this model, affiliates earn a fixed amount per sale, like $10 for every product sold.

This type of structure is straightforward, making it easy for both businesses and affiliates to track earnings without confusion.

Which businesses should run a simplified commission structure?

As mentioned, the commission structure of an affiliate program can be complex, and not every companies (especially the new ones) can handle complexity. Here are target readers of this article:

  • Startups looking for growth without heavy investments.
  • SMEs that want minimal management time for affiliate programs.
  • Budget-conscious brands: If you have no budget, don’t worry—free apps exist, especially for small networks.
  • Brands testing affiliate program: Perfect for testing affiliate marketing without the complexity, the network size shall be fewer than 30 affiliates.
  • Simple management style: Marketing manager or business model with straightforward management style (i.e. dropshipping) will love a simple structure, as it allows simple revenue calculation.

If your brand applied a strict revenue calculation, looking to optimize profit or complex marketing plan, this post is not made for you. Have a check on our detail commission setting guide.

Benefits of a simple commission structures?

After setting a simplified affiliate program, you can expect these results:

  • Keep your hands free: No need to manage it daily. Set it up and let it run automatically. Ideally, you just have to comeback to check once a month to pay affiliates.
  • Spend minimal budget: A small affiliate program can cost less than $50/month—or even be free if you’re just testing the waters.
  • Simple structure cannot lead to low performance: a program’s performance depends on affiliates, brand reach and the products itself.

Affiliate marketing is the game you cannot lose. Since this model is performance-based, you only pay for successful sales. That makes it one of the most budget-friendly strategies out there (the average ROI rate is 14x).

3 simplest commission structures

Flat Rate Commission

Pay a fixed amount for each sale, no matter the product price. Simple, predictable, and easy to manage.

  • How it works: Affiliates earn a fixed amount for each sale, lead, or action.
  • Example: $10 for every product sold.
  • Why it’s simple: Easy to track and predict costs.
  • Best for: Products/services with consistent pricing.

You should apply it to all products for consistency. If applied to specific product groups, you may have to send regular updates when changes occur. If you still prefer product group-specific rates, BixGrow can help manage this effectively.

Cons:

  • Works best for stores with a single product line. For example, stores selling similar-priced anime models.
  • If your store has products ranging from $50 to $1,000, a flat rate might hurt profits due to pricing discrepancies.

Percentage-Based Commission

A percentage-based commission is a payment model where an affiliate earns a specific percentage of the sales they generate. Instead of a fixed amount per sale, the commission varies depending on the order value.

  • How it work: Pay affiliates a percentage of each order.
  • Example: 15% per order value. It grows with your revenue.
  • Why it simple:
  • Best for: Stores with different product prices, luxury goods, or expensive items. Also effective for brand that launch many sale seasons a year.

The Key Principles set a percentage based on order value, not products. This keep your program predictable than different commission rate for different products.

You can change commission rates for different products to make your program work better. For example, give lower rates for expensive items and higher rates for cheaper ones. This might mean updating your program rules. To keep things easy and save time, we use a percentage-based approach.

Cons:

  • Sales ups and downs may cause inconsistent affiliate earnings.

Tiered Commission

A tiered commission is a payment structure where affiliates earn different commission rates based on their performance. The more sales they make, the higher the commission rate they can reach.

  • How it work: Affiliates earn more as they sell more.
  • Example: 10% for the first 20 sales, then 15% after that. It motivates affiliates to sell more.
  • Best for: This model is best for B2B services & brands looking for long-term affiliates. Since it takes a while for affiliates to reach a higher commission rate, this model required commitment from both affiliates and brands. The patience pay off!

Key Principles:

  • (1) Set clear sales goals and tell affiliates upfront.
  • (2) Adjust tiers as your business grows.

Cons:

  • Can be tricky to manage without tools, especially with many affiliates.

Want to build a more complex affiliate network? Check out this detailed guide for advanced strategies.

Conclusion

Choosing the right affiliate commission structure can make a big difference in your program’s success. Whether it’s a percentage-based, tiered, or fixed-rate commission, each model has its own benefits. The key is to align your commission strategy with your business goals and what motivates your affiliates. Keep it simple, fair, and flexible to drive more sales and build strong affiliate relationships.

I have been working in marketing for four years, passionate about creative writing and copy writing. Love to be alone at watersides, sip coffee, play games or read anything that is thought provoking.