Commission and Payout Terms Built From Contribution Margin

A commission rate is not a benchmark. It is the share of contribution margin you are willing to hand over for an order you would not otherwise have had. If your margin after returns and payment fees is thirty-eight percent, paying a flat ten percent to a partner whose incremental contribution is a fifth of what they claim is a loss the network report will never show you. Where we start: Margin by product group, return rate by product group, and the split of revenue between new and returning customers. For lead generation, the lead-to-sale rate by source and the time between the two events. If the business cannot produce these, an engagement like this still produces a rate and everybody quietly pretends. We would rather spend the first fortnight assembling the numbers than the next two years defending a figure nobody can justify. Partner types are priced differently, or the program is not designed: Content and review partners create demand and are paid at the full rate; they carry the cost of producing something that did not exist. Voucher sites are paid a reduced rate on codes they were given and nothing on codes they scraped, which only works if code distribution is controlled, so we set that up in the same engagement. Cashback and loyalty partners are paid on new customers only, or at a materially lower rate on returning ones. Browser extensions that inject a click at the checkout are usually declined outright; if you keep them, they are paid at a rate you would be comfortable reading aloud to your content partners, because eventually you will have to. Newsletter partners with an owned list get the full rate plus a fixed placement fee, since their inventory is finite and revenue share alone does not buy it. Validation, clawback and the cash cycle: The hold period comes from your return curve, not a default setting. A subscription box with heavy first-month cancellation needs sixty days. A physical product with a fourteen-day statutory withdrawal right and low returns can validate in thirty. An automotive lead holds until the dealer confirms. Payout day is fixed to a date so partners can plan around it, the threshold is set low enough that small partners' money is not trapped indefinitely, and Czech partners are paid in CZK — the exchange spread on a forty-euro payout is not theirs to absorb. Recurring products: Lifetime commission on a product with eight-month median retention is a generous-sounding promise that partners will price correctly within a quarter, at which point it has cost you goodwill and bought nothing. We usually set a declining schedule: full rate for the opening months, a lower rate through the retention half-life, then nothing. The reasoning goes into the terms so no partner feels tricked when the second-year statement arrives. Repricing a program that already runs: This is where it goes wrong. Thirty days written notice. Individual conversations with every partner above a revenue threshold before the announcement rather than after. Grandfathering for the handful whose margin contribution justifies it, named in advance. And a forecast of how many partners you expect to lose, agreed before you send anything, so the departures are a plan rather than a crisis. A quiet cut discovered by one partner is a forum thread the same week, in Czech and in English. What we refuse: We will not write a structure paying voucher partners the same as content partners; it moves budget from the people creating demand to the people intercepting it. We will not recommend a private rate a partner could discover and reasonably be angry about — every exception is defensible or it is not made. And we will not cut rates without notice, even where your terms technically permit it. Not included: Legal review in your jurisdiction, tax advice, and the platform configuration of the rules we design. We specify a structure precisely enough for your platform to implement; we do not stand in for your counsel or your accountant. Who this is not for: Anyone who wants a category benchmark. That number is free everywhere, and it is how programs end up paying twelve percent against a twenty-two percent margin.