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What is a commission in affiliate marketing?
In affiliate marketing, a commission is the monetary reward or percentage of a sale that an affiliate earns when they successfully promote a product or service and drive a desired action, such as a purchase, lead, or subscription.
Key Points About Commissions in Affiliate Marketing:
- Performance-Based: Commissions are only earned when the affiliate meets the specified conditions, such as generating a sale, click, or lead.
- Types of Commissions:
- Percentage-Based: A set percentage of the sale price, often used in e-commerce.
- Flat-Rate: A fixed dollar amount for each sale or lead, common in industries like finance or subscriptions.
- Tracking: Affiliates are credited for their sales or leads via unique tracking links, cookies, or promo codes.
- Payout Models:
- Pay-Per-Sale (PPS): Commission is awarded when a customer makes a purchase.
- Pay-Per-Lead (PPL): Rewarded for generating leads, such as sign-ups or form submissions.
- Pay-Per-Click (PPC): Earned when users click on an affiliate’s link, though this is less common.
- Payment Terms: Payments are often processed on a schedule (e.g., monthly or biweekly) and may have thresholds affiliates must meet before receiving their payout.
Commissions are the primary incentive for affiliates to drive traffic and conversions for the merchant’s products or services.
