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What is a flat-rate commission?
A flat-rate commission is a fixed amount of money that an affiliate or salesperson earns for each sale, lead, or conversion they generate, regardless of the value of the sale. Unlike a percentage-based commission, which varies depending on the price of the product or service sold, a flat-rate commission offers a consistent payout.
Example:
- If an affiliate program offers a flat-rate commission of $10 per sale, the affiliate will earn $10 for every successful sale they generate, whether the product costs $50 or $500.
Common Uses:
- Affiliate Marketing: Often used in programs where each action (such as a sale or sign-up) results in a set payout, making it easier for affiliates to predict earnings.
- Sales: Used in some sales jobs where the salesperson earns a fixed commission for each unit sold, regardless of the unit price.
Benefits:
- Predictability: Affiliates and salespeople know exactly how much they will earn per action, which can be easier to plan and manage.
- Simplicity: Easier to understand and track, as the payment doesn’t depend on fluctuating sale amounts.
Drawbacks:
- Limited Earning Potential: For higher-value products, a flat-rate commission might be less lucrative compared to a percentage-based commission that scales with the price.
