Affiliate Commission Calculator

How it is calculated

Commission is the order value multiplied by the rate, calculated on whichever base the programme defines: order total, product subtotal excluding shipping and tax, or net of returns.

Commission = base × rate, and the base definition matters as much as the percentage. A 10% rate on the full order total and 10% on the product subtotal are meaningfully different numbers.

Network fees sit on top, typically 20% to 30% of the commission paid, which most merchants forget when comparing rates.

A concrete case

A $58 order at 10% on the product subtotal of $48.15 excluding shipping: $4.82 of commission. A network fee at 25% adds $1.20, so the total cost is $6.02.

Against $31.90 of contribution, the affiliate order leaves $25.88, a 19% reduction in contribution per order.

Calculating on the full $58 instead gives $5.80 of commission and $7.25 all in, leaving $24.65. That base difference costs $1.23 an order, or $20,664 a year at 1,400 monthly orders.

Defining the base as the product subtotal net of returns is standard practice and it is worth writing into the terms rather than assuming.

What the number hides

The headline rate is not the cost. Network fees, tracking software and the management time are all real, and a 10% programme typically costs 12.5% to 13% all in.

Commission on shipping and tax is also pure loss, since neither carries margin, and paying on the gross order total does exactly that.

Where to go from here

Set the commission base as the product subtotal excluding shipping, tax and returns, and state it explicitly in the programme terms.

Then model the all-in cost including network fees before setting the rate, since the rate that looks affordable frequently is not once the platform takes its share.

Rate setting and the incrementality question

The rate has to be competitive enough to attract affiliates and low enough that the orders are worth having, and the deciding variable is what proportion of those orders are incremental.

For genuinely incremental orders, a new customer who would not otherwise have found you, the commission is an acquisition cost and 10% against a $27 CAC is excellent value.

For orders that would have happened anyway, it is a rebate. That is why coupon and loyalty affiliates are priced differently from content affiliates in well-run programmes: they do different jobs and deserve different rates.

Cookie duration is worth setting deliberately rather than accepting the network default, since it determines how much delayed conversion the programme pays for and it varies from seven to ninety days across programmes.

A longer window attracts affiliates and costs more, because it captures purchases that would have happened through other channels in the meantime.

Product-level rates rather than a single site-wide rate let the programme pay more on high-margin lines and less on thin ones, which most networks support and few merchants configure.

It also stops affiliates concentrating on whichever products are easiest to sell regardless of what they contribute.

Setting a different rate for new customers than for returning ones directs the programme's cost at acquisition, which is the outcome most merchants want and few configure.

Reviewing the rate against what competitors in the same category pay is worth doing annually, since affiliates compare programmes directly and an uncompetitive rate quietly loses partners rather than generating complaints.