Setting the right Shopify affiliate commission is the most important factor in keeping your affiliates interested and motivated.
People feel valued when they are paid proportional to their efforts. However, manually setting and managing various affiliate commission structures can take time and effort.
To effortlessly set and manage affiliate commission for your Shopify store, dive into the blog and learn the knacks.
Affiliate commission influences conversions up to 70%. Set diverse commission rates using Afflr
What is a Shopify Affiliate Commission?
A Shopify Affiliate Commission is a reward to affiliate partners in return for the sales they bring by promoting the product or service. This commission is like an incentive for the affiliates for their contribution.
When creating an affiliate program for your Shopify store, it is mandatory to fix affiliate commission rates. This rate will vary depending on the requirements and goals of each program.
In affiliate marketing, there are different types of Shopify affiliate commission models that you can refer to before deciding on the right fit for your program. Figuring the right shopify affiliate commission structure will motivate affiliate partners adequately.
Additionally, it is also mandatory that the commission is rightly allocated on completion of the referral sale and the affiliate payout is processed on time. Efficient management will help build trust and strong relationships with your affiliate marketers, leading to a successful association.
To smoothly perform all these functions you can use a shopify app to pay affiliates commission.
How to set up an affiliate commission for your Shopify store?
To set up an affiliate commission for your Shopify store, it is useful if a Shopify Affiliate program app is integrated into your store.
A Shopify affiliate app will help you in the following ways:
- To set up your affiliate program commission
- To edit and manage the changes in the commission
- To allocate commission to Shopify affiliates after-sale
- To maintain the records of the Shopify Affiliate commission
- To streamline the payout of affiliate earnings
Afflr is a Shopify affiliate app that effortlessly automates all your Shopify affiliate marketing efforts.
The best features of Afflr that make your affiliate marketing journey effortlessly are:
- Quick set up and creation of affiliate program
- Flexibility to customize commission and discount
- Smooth addition of affiliates using multiple methods
- Dedicated affiliate portal for the use of Shopify affiliates
- Easy addition of personalized affiliate landing page
- Insightful tracking or sales and commission
- Multiple payout options and processing
Afflr allows you to customize your discount in two ways
- Simple Shopify Affiliate Commission
- Advanced Shopify Affiliate Commission
Before learning to set up an affiliate commission, let us see how to create a program using Afflr.
To create a Shopify Affiliate Program, Go to your Shopify admin dashboard -> Apps -> Afflr -> Programs and then click on the Add Program button
The Create Program page will have all the required fields needed to customize the affiliate commission for your Shopify store.
1. Simple Shopify Affiliate Commission
Simple Shopify Affiliate Commission has two commission types that you can choose from
a. Percentage Commission
In this type of Shopify affiliate commission, a specific percentage of the total order value is designated as the affiliate’s commission. This means that after a sale is made, the affiliate receives a commission equal to this predetermined percentage of the order value.
This screenshot shows the example of a 10% commission set for the affiliate.
b. Fixed Amount Commission
Using this type of Shopify affiliate commission, you can set a fixed amount as a commission. This amount will not change based on order value or total sales.
Here is a screenshot showing a fixed amount of $150 as a commission to the Shopify affiliate.
Reward affiliates based on their performance to keep them motivated to work efficiently. Use Afflr to set different commission rates.
2. Advanced Shopify Affiliate Commission
Advanced Shopify affiliate commission follows the tier structure. This means that a different affiliate commission structure is allotted to the affiliate based on certain criteria.
This criteria, most of the time, deals with the performance efficiency of the affiliate like the referrals they have bought, the total value of all sales, etc.
In tier structure, different Shopify affiliate program commission rate is set for each criterion. Once the affiliate surpasses the said criteria, their commission is revised.
Afflr offers three criteria that can be set in favor of tier structure along with the common commission type Percentage and the Fixed amount that is discussed above.
a. Tier Type: Total Referral Sale Amount
Based on the total referral sale amount the affiliate has bought through their promotion, the Shopify affiliate commission will vary.
For example, let us set an initial 10% commission rate. Once the affiliate brings more than $5,000 in sales, we can revise the commission to 12%. Again, if they bring sales over $10,000, we can revise their Shopify affiliate program commission to 15%.
Here is a screenshot depicting the example.
b. Tier Type: Total Referral Sale Count
In this tier type, the Shopify affiliate commission changes with an increase in sales count.
Let us understand this with an example. Set an affiliate commission of $100 to start with. When the affiliate partners bring in more than 10 sales, revise the commission to $150 and $200 when the sales count is over 20. Finally, for a sale count over 25, set a fixed commission of $250.
This screenshot will help understand the scenario better.
c. Tier Type: Total Number of Referral
With an increase in the number of people referred by the affiliate, their Shopify affiliate program commission will also increase in this type of Shopify affiliate commission.
Consider a scenario where the affiliate program commission is first set at 10% and once an affiliate brings more than 20 referrals, it increases to 20%.
Check out the screenshot below where this example is shown.
3. Commission Model for Shopify
Commission models will help define the duration for which the affiliate will receive commissions from subsequent purchases made by the new customers they refer.
a. Lifetime Commission
When you enable the lifetime commission for a program in Shopify, the affiliate will receive the predetermined commission for all the purchases made by the customer they referred.
This is a long-term reward where the affiliate will receive the benefit of the affiliate commission in Shopify as long as their referral is associated with the Shopify store.
In Afflr, it is easy to activate a Lifetime Commission. It just takes ticking the Enable Recurring Commission checkbox and selecting the Lifetime Commission button as shown in the screenshot.
b. Recurring Commission
Here, the affiliate receives a commission for their referrals’ subsequent purchases but for only the times specified by the Shopify store owner.
This can be motivating for referral partners, as they receive commissions more than once for a single referral. However, this also limits the duration for which the commission model applies.
Here is an example of setting recurring commission for the first 5 purchases of the new customer.
For each type, you can add up to ten tiers using Afflr. Setting your commission this way will help you alter the commission based on the performance efficiency of the affiliate marketers. This will help keep the affiliate marketers motivated to work better and bring quality referrals.
Best Practices in Choosing Shopify Affiliate Commission
The best practices in choosing Shopify affiliate commission that can benefit your business are:
1. Estimate the ROI: In traditional marketing, the Return on Investment [ROI] is a major metric to be considered. So, before fixing the Shopify affiliate program commission, it is important to calculate the budget for the total affiliate marketing campaign. This will help receive high ROI for your marketing efforts.
2. Understand Profit Margin of Affiliate Marketing: Profit margin is what you gain after eliminating major spending. Commission calculation for Shopify affiliates can be calculated based on profit margin.
Where,
Customer Avg LTV: The average lifetime value of a customer
Affiliate Commission: The total commission paid to the affiliate
COGS: Cost of Goods Sold.
Other Expenses: Any additional expenses
Taking into consideration the value of profit margin, based on the previous data set present, plan your affiliate commission in such a way that your profit is high.
3. Analyze commission offered by competitors: Be on top of the industry trends and standards. In an e-commerce business, it is imperative to hold a competitive edge over others. So, analyze the terms, conditions, and affiliate rates of your competitors before fixing your own Shopify affiliate commission.
4. Keep updating your Shopify affiliate commission rate: Setting an affiliate commission for the Shopify store doesn’t have to be a permanent decision. Any time throughout your affiliate marketing journey, you can revise the Shopify affiliate program commission. However, it is mandatory to keep your existing affiliate partners informed about the changes and implications.
5. Performance-based commission: The commission rate of an affiliate program is the key factor that keeps the referral partners working better in promoting the Shopify store. Hence, adopting a performance-based commission like a tier commission or providing extended benefits like using a Recursion commission. This will encourage affiliate marketers to up their marketing game.
With Afflr, eliminate tedious task,manage your affiliate commission effortlessly and streamline the payouts.
Conclusion
Deciding the right affiliate commission for your Shopify store is just the first step. Setting it up and managing can be crucial. However, with an efficient Shopify Affiliate Marketing app, this task can become easy.
With the knowledge from this blog, you can effortlessly set up a Shopify affiliate commission for your store and build a solid foundation to boost sales and conversion of the business.
Further Reading
How to Create an Affiliate Program in Your Shopify Store
How affiliate links help Affiliate marketing in Shopify?
How to create a Referral Program for your Shopify store?
9 Types of Affiliate Commission Models in Affiliate Marketing
Paying commissions to affiliates can depend on various factors like the scope of the program, industry standards, marketing budget, etc. A business owner can send research main factors before fixing their Shopify affiliate commission.
A good commission is between 5% to 30%. Rewards the affiliate marketers adequately without compromising on the profit margin of the Shopify store.
To set a commission rate, you can employ Shopify affiliate marketing software. This will have the provisions to set up, edit, manage, and affiliate commission while also providing easy ways to payout these rewards.
Affiliates can get paid monthly, bi-monthly, weekly, daily, or in other predetermined time frequencies. The affiliate payout schedule will depend on the policy of the Shopify store and the scope of the program.
