Setting the right affiliate commission rates for your WooCommerce store is crucial for the success of your affiliate marketing program.
An effective affiliate marketing commission rate not only attracts top-performing affiliates but also ensures that your business remains profitable.
But, how do you maintain the right balance? Are you going to offer the best affiliate commission rate that stands out from the crowd or something that aligns with typical affiliate commission rates in your industry? Setting up your affiliate program with the right strategy can make all the difference.
In this blog, we’ll explore the basics of setting affiliate commission rates, discuss the advantages of setting the right affiliate commission rates, offer tips to help you establish rates that are both competitive and sustainable, and explain how to set commission rates for affiliates.
Let’s get started!
Start rewarding your affiliates with the best affiliate commission rates in the industry using WPrelay’s tiered commission structure to attract high-quality affiliates.
Types of Affiliate Commissions
Understanding the different types of commission rates for affiliates is the first step in determining the best affiliate commission rate for your WooCommerce affiliates.
Here, we have listed the 4 affiliate commission structures you can use, depending on your business model and goals.
Percentage-Based Commissions
This is the most common type of affiliate marketing commission rate where you pay a percentage of the sale an affiliate makes. For example, if you set a 10% commission rate, on a $100 sale an affiliate would earn $10.
This commission structure motivates the affiliates to generate higher sales as they resonate with the commission they are going to get.
Fixed-Rate Commissions
It’s a simple commission model where affiliates earn a fixed amount for each sale, regardless of the order value.
Fixed commissions will work best for your affiliate program if you sell a few specific products, each with a set price.
Tiered- Commissions
The tiered commission is an advanced affiliate commission plan where affiliates are paid based on the volume of sales they generate. You might determine a fixed number of sales and increase your commission rates for affiliates accordingly.
For example, offer a 5% commission for the first 10 sales, increasing to 10% for the next 20 sales, and 15% for any sales beyond that.
Tiered commissions encourage affiliates to increase their efforts to reach higher commission tiers by achieving a pre-fixed number of sales.
Recurring Commissions
In a recurring commission plan, affiliates earn a commission each time their referred customer renews a subscription.
This type of affiliate commission rate can be very attractive to affiliates, as it provides them with a steady income stream.
Advantages Of Setting The Right Affiliate Commission Rates
Attracts High-Quality Affiliates:
If you are ready to provide competitive and fair affiliate commission rates, you can easily attract top-tier affiliates to join your affiliate marketing program.
Attracting high-quality affiliates not only drives substantial sales but also creates brand loyalty as they build trust with your audience.
Also, it makes your affiliates prioritize your affiliate program over your competitor’s.
Encourages Consistent Promotion:
When affiliates feel they are fairly compensated, they provide their 100% to promote your product consistently. This consistent promotion can lead to high traffic and sales to your WooCommerce store in the long run.
Balances Profit Margins:
Setting the right affiliate commission rates allows you to maintain a balance between rewarding affiliates and maintaining your profit margins. By carefully calculating your affiliate commission rates, you can ensure that your affiliate program remains profitable.
Encourages Diverse Marketing Strategies:
An affiliate program with high commission rates motivates the affiliates to explore various marketing strategies to increase their earnings. This includes creating quality content, running ads, and utilizing social media and email marketing campaigns.
All these efforts can broaden your brand’s reach and visibility in different channels.
Why Do You Need A Plugin To Set Affiliate Commissions?
Want to take full control of your affiliate program from creating to tracking affiliate sales? The solution is to use a plugin to manage all of your affiliate marketing program operations.
Since WooCommerce doesn’t have an inbuilt feature of creating and managing an affiliate program, you can take the help of plugins.
With a plugin like WPrelay you can recruit, set custom commission rates for affiliates, track, manage, and do Commission-based payouts for your WooCommerce affiliate program.
Reward your affiliates with WPrelay’s customizable and flexible commission plans to retain quality affiliates and develop your WooCommerce affiliate program.
How To Set Affiliate Commission Rates In Woocommerce?
Now let’s quickly look at the step-by-step process of setting affiliate commission rates in WooCommerce using WPrelay.
Step 1: Install WPrelay
- Go to your WordPress dashboard -> plugins -> add new
- Then click on the upload plugin button at the top.
- Browse and click the downloaded WPRelay plugin zip file.
- Click install now -> Activate plugin
Step 2: Create An Affiliate Program
- Go to WPrelay dashboard -> Manage -> Create program
- Enter the title and description to create an affiliate program
- Provide details about the affiliate program’s duration by setting the start and end dates.
Step 3: Set Up Commission Rates For Affiliates
Wprelay provides 3 types of commission structures for affiliates. These commission plans will help you explore various types of commission plans and set competitive affiliate commission rates for your WooCommerce affiliate program.
Type 1: Simple Commission Type
(i) To set a fixed commission type in a simple affiliate program,
- Commission type -> Simple
- Then select the type “Fixed”
- In the amount section, enter the commission amount you want to pay to the affiliate.
(ii) To set percentage commission type in a simple affiliate program,
- Commission type -> Simple
- Then select the type “percentage per sale”
- In the percentage section, enter the percentage of commission you want to pay to the affiliate.
(iii) To set no commission type in a simple affiliate program,
- Commission type -> Simple
- Then select the type “no commission”
Type 2: Tier Based Commission Type
(i) To set tier-based affiliate marketing commission rate based on the number of referrals,
- Commission type -> Tier based
- Select ‘Number of referrals’ under “when” in the tier-based section.
- Then choose the ‘Fixed’ or ‘Percentage’ commission type according to your commission plan.
- Enter the commission rate or percentage for the number of referrals.
If you want to add multiple tier systems to your WooCommerce affiliate marketing program, Click on ‘Add tier’ and fix commission rates.
(ii) To set tier-based affiliate program commission rates based on total sale amount,
- Commission type -> Tier based
- Select ‘Total sale amount’ under “when” in the tier-based section.
- Then choose the ‘Fixed’ or ‘Percentage’ commission type according to your commission plan.
- Enter the commission rate or percentage for the total sale amount.
- Select the currency type of your choice from the ‘Select currency’ drop-down.
Click on ‘Add tier’ if you want to add multiple tier systems to your WooCommerce affiliate program.
(iii) To set tiered commission rates for affiliates based on the number of sale’s count,
- Commission type -> Tier based
- Select ‘Number of sale’s count’ under “when” in the tier-based section.
- Then choose the ‘Fixed’ or ‘Percentage’ commission type according to your commission structure for affiliates.
- Enter the commission rate or percentage for the number of sale’s count.
Click on ‘Add tier’ if you want to add multiple tier systems to your WooCommerce program.
Type 3: Rule-Based Commission Type
The rule-based affiliate program offers advanced configuration settings where you will find more sophisticated setup options. It is a per-line item choice commission type and it does not apply to the order total.
Store owners who want to implement diverse affiliate strategies can take advantage of the extensive configuration options provided by the rule-based affiliate program.
Additionally, Wprelay provides options to set affiliate commission rates based on product / category.
Note: The rule tab will be enabled only after a program is created.
To Create a Rule-Based Commission Type,
- Go to WPrelay dashboard -> Manage -> Create program
- Enter the title and description to create an affiliate program
- Commission type -> rule-based
- Save program
(i) To set affiliate commission rates for all products,
- Go to manage -> Rules -> Add Rule
- Enter rule title
- Select ‘All Products’ in the product/category section
- Then choose ‘Fixed’ or ‘Percentage’ according to your commission plan.
- From the conditions, select ‘ All affiliates’ or ‘specific affiliate’ as per your preference.
(ii) To set affiliate commissions for specific products,
- Go to manage -> Rules -> Add Rule
- Enter rule title
- Select ‘ Specific Products’ in the product/category section
- Then choose the products you want to give commission for affiliates from the drop-down
- Set ‘Fixed’ or ‘Percentage’ according to your commission plan.
- From the conditions, select ‘ All affiliates’ or ‘specific affiliate’ as per your preference.
(iii) To set affiliate commission rates for All products except a few,
- Go to manage → Rules
- Enter title
- Select ‘All Products Except These’ in the product/category section
- Then choose the products you don’t want to provide commission for affiliates from the drop-down
- Set ‘Fixed’ or ‘Percentage’ according to your commission plan.
- From the conditions, select ‘ All affiliates’ or ‘specific affiliate’ as per your preference.
(iv) To set commission rates for Specific categories,
- Go to manage → Rules
- Enter title
- Select ‘Specific Category’ in the product/category section
- Then choose the categories you want to provide commission rates for affiliates from the drop-down
- Set ‘Fixed’ or ‘Percentage’ according to your commission plan.
- From the conditions, select ‘ All affiliates’ or ‘specific affiliate’ as per your preference.
(v) To set commission rates for categories except a few,
- Go to manage → Rules
- Enter title
- Select ‘All Categories Except These’ in the product/category section
- Then choose the categories you don’t want to provide commission for affiliates from the drop-down
- Set the ‘Fixed’ or ‘Percentage’ commission type according to your commission plan.
- From the conditions, select ‘ All affiliates’ or ‘specific affiliate’ as per your preference.
Step 4: Setup recurring options
Use a recurring option to set affiliates to earn commissions either for life or for a specified number of initial orders. To do so,
- Enable the recurring option
- Select ‘Lifetime’ or ‘X number of orders’ according to your preference.
And finally, “save” the program.
Now, you are done with setting up your WooCommerce affiliate program with custom commission rates for affiliates.
Tips For Setting Affiliate Commission Rates
Setting the right affiliate commission rates for your WooCommerce store is real work! You not only have to set your affiliate program with high commission rates that attract affiliates but also should be under budget for you to keep paying consistently.
Don’t worry. We have listed a few tips for you to consider before setting an affiliate marketing commission rate.
Understand Industry Standards:
There are no standard rates for affiliate commissions. It varies from industry to industry. However, the typical affiliate commission rates range from 5% to 30%.
But, the answer to ” What is a good commission rate for an affiliate?” ranges from 15% to 20%. The variation in Affiliate marketing payout rates is usually based on the type of industry, niche, product, and competitor. So, to set the best affiliate commission rate and popularize your affiliate marketing program you need to understand the industry standards.
Analyze Your Profit Margins:
It’s always important to Set an affiliate commission rate that doesn’t compromise your profitability. A common recommendation is to set an affiliate commission rate at 20 -30% of your gross profit margin. So, to be safe, calculate the profit you make on each product after accounting for all costs, from production to shipping. Your affiliate program commission rates should be a percentage of this profit margin.
Research Competitor’s Commission Rates:
Keep an eye on your competitor’s commission rates. Analyzing your competitor’s commission rates is one of the best ways to determine yours. Look at other WooCommerce stores in your niche, and analyze their affiliate programs, affiliate commission structure, and commission rates.
If you set your affiliate program with higher commission rates than your competitor, you have a chance of attracting more quality affiliates. However, make sure that your commission rates are still suitable for your business.
Monitor your affiliate’s performance and payout rates with WPrelay’s comprehensive tracking feature in no time.
Conclusion
Setting the right affiliate commission rates for your WooCommerce store is important for attracting and retaining high-quality affiliates. It also helps in driving more sales and maintaining profitability.
Using a plugin like WPrelay makes your job easier than ever! By following the procedures mentioned above, you can create a successful WooCommerce affiliate marketing program, set custom commission rates for affiliates, and provide the best commission rate compared to your Competitor’s commission rate that benefits both your business and your affiliates.
Also read,
- How to Increase Sales with Affiliate Marketing for WooCommerce?
- How to Set Affiliate Commission Rates for Your Affiliate Program in 2024
Install WPrelay -> create an affiliate program -> choose a commission type -> set commission rates -> set up recurring options -> save the program
Affiliate commissions are money paid to affiliates for promoting your product/service. It usually depends on the sales and conversions an affiliate makes. While referral fees are the incentives existing customers get when they refer to a new customer.
Generally, higher commission rates can attract more affiliates and motivate them to promote your products more actively. This potentially increases sales.
Your affiliate commission payout can be calculated with the following formula:
Commission payout = Total sales generated by the affiliate x Commission rate
Yes, you can offer flat-rate commissions if you are promoting products with fixed prices. Percentage commissions are suitable for varied product ranges.
Popular plugins include WPrelay, AffiliateWP, YITH WooCommerce Affiliates, and WooCommerce Product Vendors, which help manage affiliate programs and commission structures.
The typical affiliate commission rates range from 5% to 30%, depending on industry standards and your profit margins. This range is considered fair for affiliates at all levels.
A 5% commission means that the affiliate earns 5% of the total sales amount generated through their referral.
