Setting up the right affiliate commission in Shopify can be a grinding task. It involves balancing the budget and motivating affiliates without compromising ROI for your program.
However, this blog has got you covered by walking you through each step in selecting an apt Shopify affiliate marketing commission and finding the right way to monetize Shopify traffic. We have also offered instructions on how to set a commission for the Shopify affiliate program and automate it.
You can learn how to determine your Shopify affiliate commission rate based on your budget, competitors, and international markets. You can also know how to manage different types of affiliate commissions – like percentages, fixed amounts, or more advanced tiered systems. Having control over your affiliate commission can greatly contribute to the success of your affiliate marketing in Shopify.
Boost your conversions by up to 70%! Unlock the power of affiliate commissions with Afflr.
What Is Shopify Affiliate Commission and Why Is It Important?
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 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 merchant referral fee for your program.
Figuring out the right commission structure will motivate affiliate partners to work harder to promote your brand.
Firstly, it is also mandatory that the commission is rightly granted on completion of the sale through affiliate sales tracking. Secondly, affiliate income must reach at the right time to keep the trust in the brand intact.
To smoothly perform all these functions you can use a Shopify app for affiliate marketing.
How to Choose the Right Shopify Affiliate Commission Rate?
Choosing the right Shopify affiliate commission rate is an important step in customizing your affiliate program. Your partner incentives in Shopify can determine the affiliate interest that can eventually lead to the success of the marketing campaign.
The following steps can help you find the best commission structure:
1. Align Commission Rate with Business Objectives
Identify the required outcome from a Shopify affiliate program. The goal can be driving sales, increasing traffic, or simply creating brand awareness. This will help you get a clear idea of which affiliates to recruit and how much commission rates to allocate.
2. Set Affiliate Commissions Based on Your Budget
Affiliate Commission in Shopify should take into account the size of your budget. Only a reasonable part of your affiliate marketing budget should be allotted to commission as other expenses like marketing materials, tools, operation costs, etc should also be considered. You can calculate the profit margin manually with this formula.
Where,
- Customer Avg LTV: The average lifetime value of a customer
- Commission: The total commission paid to the affiliate
- COGS: Cost of Goods Sold.
- Other Expenses: Any additional expenses
3. Perform a Competitor Analysis to Fix Rates
Your commission for affiliates should be competent in your target marketplace among competitors. Give a reason for people looking for passive income through Shopify to choose you.
The following table shows niche-based commission rates for affiliates from LINK. You can use this information to set your Shopify affiliate marketing commission.
4. Use an ROI Calculator for Accurate Projections
Shopify affiliate marketing ROI calculator can help you determine your return on the investment spent on the program. While this calculation can be complicated, you can use the highly effective ROI Calculator by Afflr to find the right numbers.
5. Customize Rates for International Markets
One aspect that many fail to consider is affiliate commission for global programs. If you are looking at targeting international markets by recruiting global affiliates and influencers, make sure you adjust the commission based on the geographic location.
6. Implement Tracking, Testing, and Optimization
Shopify commission for affiliates cannot often be gotten right on the first try. Therefore, it is important to track, test, and optimize the commission structure for Shopify based on these insights. An effective Shopify affiliate app can help with this.
7. Define Other Conditions
In addition to the obvious steps, make sure you are aware of factors like cookie duration, criteria for qualified referrals, Affiliate payout Shopify, etc when setting up your commission. Cookie duration for affiliate commissions can largely influence monetizing Shopify traffic.
How to Set Up a Shopify Affiliate Commission?
For the best Shopify commission rates setup for 2024, you need two important prerequisites:
- Choose a Shopify Affiliate Program App
- Set up Shopify Affiliate Commission Structure
- Track and Manage Payouts Seamlessly
Once you have both of these in place, you can effortlessly set the commission rate.
Step 1: Choose a Shopify Affiliate Program App
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 commission
- To streamline the Shopify affiliate program payout
Afflr is a Shopify affiliate app that lets you set flexible commission rates for Shopify stores. You can create and manage commission as well as affiliate payout in Shopify.
The best features of Afflr that make your affiliate marketing journey easy are:
- Quick setup and creation of an affiliate program in Shopify
- Flexibility to customize commission and discount
- Smooth addition of affiliates using multiple methods
- Dedicated affiliate portal for the use of Shopify affiliates
- Insightful tracking or sales and commission
- Multiple payout options and processing
Before learning to set up commission, let’s see how to create a program using Afflr.
To create an Affiliate Program with Afflr, 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 fields required to customize the commission for your Shopify store.
Step 2: Set up Shopify Affiliate Commission Structure
Once you create an affiliate program, you can easily set up a Shopify affiliate commission and customize it using Afflr.
1. Simple Affiliate Commission
Simple Commission has two commission types that you can choose from
a) Percentage Commission
A specific percentage of the total order value is designated as the affiliate 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
A fixed amount can be set as a commission for Shopify affiliates. 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. Use Afflr to set tiered commission rates.
2. Advanced Affiliate Commission
Advanced affiliate commission follows the tier structure. This means that a different commission structure is allotted to the affiliate based on certain criteria.
This criteria, more than often, deals with the performance efficiency of the affiliate like the referrals they bring, the total value of all sales, etc.
In tier structure, the affiliate program commission rate keeps increasing as certain criteria are satisfied. Performance-based affiliate commissions are altered automatically following efficiency.
Afflr offers three criteria to set up tiered commissions for Shopify affiliates along with the common commission types like 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 commission structure to 15%.
Here is a screenshot depicting the example.
b) Tier Type: Total Referral Sale Count
In this tier type, the Shopify commission rate changes with an increase in sales count.
Let us understand this with an example. Set 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 you to understand the scenario better.
c) Tier Type: Total Number of Referral
With an increase in the number of people referred by the affiliate, their affiliate commission rate will also increase in this type.
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.
Step 3: Track and Manage Payouts Seamlessly
Tracking and managing payouts is easy when you use a Shopify affiliate marketing app. You can initiate payment with one click, pay through multiple payment methods, and track the history. This transparency will help you maintain clear records.
Here is a screenshot of a quick and easy affiliate commission payout using Afflr for Shopify.
Commission Models for Shopify Affiliate Programs
Numerous commission models for Shopify will help define how the commission is calculated. This will determine 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 affiliate 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 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 offer performance-based affiliate commissions. This will help keep the affiliate marketers motivated to work better and bring quality referrals.
Benefits of Using Afflr to Set Shopify Affiliate Program Commission
The benefits of using Afflr to set Shopify affiliate program commission are:
- Flexible commission rates can be set depending on the scope of the affiliate program
- Affiliate links on Shopify can seamlessly track all affiliate sales and allot respective commissions to affiliates
- Tracking of affiliate sales, commission allocation, and management is simple with the comprehensive dashboard.
- Offers different payment methods and auto pay affiliates commission in Shopify
- Shopify app to pay affiliates commission can make the payment easy and transparent.
Eliminate tedious tasks, manage your affiliate commission effortlessly, and streamline the payouts.
Conclusion
Deciding the right affiliate commission for the Shopify store is just the first step. Setting it up and managing is the real deal maker. However, with an efficient Shopify Affiliate Marketing app, this task can become easy.
With the knowledge from this blog, you can effortlessly choose and set up a Shopify affiliate commission for your store and build a solid foundation to boost sales and conversion of the e-commerce store.
Further Reading
- Ultimate Guide to Shopify Affiliate Marketing
- 9 word-of-mouth marketing strategies to grow Shopify sales
- 10 Best Shopify Referral Apps in 2024
- How to create a Referral Program for your Shopify store?
If your Shopify commission isn’t working, check for issues like outdated cookie settings, or misconfigured commission rates in your affiliate program. To avoid commission setting issues use Shopify apps for affiliate programs.
Affiliates get paid commission rates ranging from 5% to 30% on sales they bring through their referrals. Usually, commission rates depend on the Shopify affiliate program niche and the products involved.
The Shopify affiliates can make between $100 to $10,000 per month. This will depend on their follower’s size, engagement, and the commission rates set in the affiliate program.
A good commission rate for affiliates usually falls between 5% and 25%. Higher rates are offered for specific products or niche markets that are highly popular and profitable.
The average commission rate for affiliate programs generally ranges from 5% to 15%. However, the rates can be pushed up to 30% for highly profitable products. The difference in rates will depend upon the market-acceptable rate.
