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How are commissions calculated on ClickBank?
Commissions on ClickBank are calculated based on a few key factors, including the sale price of the product, the affiliate commission rate set by the vendor, and transaction fees. Here’s how commissions are calculated in detail:
1. Sale Price of the Product
The sale price is the amount the customer pays for the product. This price can vary depending on the vendor’s pricing structure, any discounts or promotions, and whether the product is a one-time purchase or a subscription-based product (recurring payments).
2. Affiliate Commission Rate
Each product on ClickBank has a commission rate that the vendor sets for affiliates. This rate typically ranges from 50% to 75% for most products, though some products may offer higher or lower commissions depending on the vendor’s strategy.
3. Transaction Fees
ClickBank charges a transaction fee for every sale made through its platform. The fee consists of two parts:
- Fixed Fee: A flat fee of $1 per transaction.
- Percentage Fee: A fee of 7.5% of the sale price.
So, for each sale, the vendor pays a total transaction fee of $1 + 7.5% of the sale amount. This fee is subtracted from the sale price before the affiliate commission is calculated.
4. Commission Calculation Process
Here’s how the affiliate commission is calculated step by step:
- Sale Price: The price the customer pays for the product (e.g., $100).
- Transaction Fee: ClickBank takes $1 + 7.5% of the sale price.
- For a $100 product:
- Transaction Fee = $1 + (7.5% of $100) = $1 + $7.50 = $8.50
- For a $100 product:
- Net Sale: Subtract the transaction fee from the sale price.
- For a $100 product:
- Net Sale = $100 – $8.50 = $91.50
- For a $100 product:
- Affiliate Commission: Multiply the net sale by the affiliate’s commission rate.
- For an affiliate with a 50% commission rate:
- Commission = 50% of $91.50 = $45.75
- For an affiliate with a 75% commission rate:
- Commission = 75% of $91.50 = $68.63
- For an affiliate with a 50% commission rate:
5. Recurring Commissions (for Subscription Products)
If the product is a subscription-based product (e.g., a monthly membership or software), affiliates can earn recurring commissions for each billing cycle:
- If a customer subscribes to a $30/month product with a 50% commission rate:
- Monthly Commission = 50% of $30 = $15 each month for as long as the customer remains subscribed.
6. Two-Tier Commissions (if applicable)
Some ClickBank products offer a two-tier affiliate program, where affiliates can earn commissions from both their own sales (Tier 1) and sales made by affiliates they refer to ClickBank (Tier 2).
For example:
- Tier 1: The affiliate earns the standard commission on the sale (e.g., 50% of the sale price).
- Tier 2: The affiliate earns a smaller commission for the sales made by their referred affiliates (e.g., 10% of the sale price).
Example:
- If an affiliate refers a new affiliate, and that new affiliate makes a sale, the original affiliate might earn 10% of the sale price.
Summary of the Calculation Process:
- Sale Price = The amount the customer pays for the product.
- Transaction Fee = $1 + 7.5% of the sale price.
- Net Sale = Sale price minus the transaction fee.
- Affiliate Commission = Commission rate multiplied by the net sale.
- Recurring Commissions = For subscription-based products, affiliates earn a percentage of each recurring payment.
- Two-Tier Commissions = Affiliates can earn additional commissions for sales made by affiliates they refer to ClickBank.
This structure ensures that affiliates are compensated based on the final sale price minus any transaction fees, and it allows for the potential of recurring income for subscription products.
