Results 1 to 7 of 7
  1. #1
    Affiliate Manager nish's Avatar
    Join Date
    July 6th, 2005
    In a tiered structure, how are commissions calculated normally?
    Lets say that a merchant has the following tiered commission structure: 0-1000: 10% comm., 1001-5000: 15% comm., 5001-10000: 20% comm., and 10001 and up: 25% comm.

    Lets say an affiliate had $7,000 in sales. Now how is the commission calculated? There can be two methods:

    1. The commission is calculated as 10% for the first 1000 ($100), 15% for the next 4000 ($600), and 20% for the next 2000 ($400). So total commission = $1100

    2. Since 7000 falls in the 5001-10000 tier, the affiliate gets 20% of entire 7000. So total commission = $1400.

    So which method is generally followed by the merchants and the networks?


  2. #2
    AM Navigator Geno Prussakov's Avatar
    Join Date
    May 10th, 2005
    Washington D.C. Metro Area
    I would believe it's the latter, as the whole point is in the remuneration of better activity.

    I'd be interested in what others have to say too.


  3. #3
    Canadienne extraordinaire Susan's Avatar
    Join Date
    August 11th, 2005
    Guelph, Ontario
    I think it all depends on the merchant. If a merchant comes from an accounting background, they'll do it the first way :-( We recommend the latter to our merchants out of fairness to the affiliate.
    Susan Arts
    Senior Vice President, Marketing
    Moxy Media

  4. #4
    Affiliate Manager inflatemouse's Avatar
    Join Date
    February 28th, 2005
    You need to read the Terms of Service -- both ways are used. While the second method pays more up front to the Associate it restricts the flexibility of merchants. If you expect to be a making big sales you are more likely to get special terms from a merchant running the first method.

  5. #5
    CPA Network Rep
    Join Date
    January 18th, 2005
    Hi nish,

    Usually merchants opt for giving affiliates the full specified percentage when they pass the threshold.

    I have rarely heard of breaking it up. It is a reporting nightmare and doesn't add much incentive.

  6. #6
    Affiliate Manager
    Join Date
    July 26th, 2005
    I have only worked with the second way you specified, but different merchants do things differently.

  7. #7
    Affiliate Manager nish's Avatar
    Join Date
    July 6th, 2005
    I too have been seeing both the methods being used and thats why was wondering what might make more sense.


  8. Newsletter Signup

+ Reply to Thread

Similar Threads

  1. New Tiered Commission Structure
    By pajamalady in forum ShareASale - SAS
    Replies: 0
    Last Post: June 27th, 2005, 04:34 PM
  2. Classic vs. Tiered pay structure...
    By GiftFinder in forum Canadian Affiliates
    Replies: 1
    Last Post: April 8th, 2004, 03:51 PM
  3. New Tiered Commission Structure
    By Javi in forum Commission Junction - CJ
    Replies: 3
    Last Post: January 6th, 2004, 10:14 PM
  4. New Ebay Tiered Structure
    By david11982 in forum Commission Junction - CJ
    Replies: 5
    Last Post: May 15th, 2003, 03:57 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts