The Ultimate Affiliate Commissions Handbook

By: Tomer Hen |Sign up to my free newsletter: MassiveInfluence.co

In the last 2 years I’ve generated my brands and those I helped over $4M in influencer-affiliate
sales.

I’ve made many mistakes that cost me time and money, and this is why I love cutting the
learning curve for brands using my Massive Influence System and this kind of content.

Affiliate commissions is an art of its own, and in this handbook I’ve summarized everything that
I’ve learned helping over 40 brands run their own influencer-affiliate programs.

Going through this doc (and applying it) will end up giving you leverage over many other
brands trying to win the attention of influencers – especially when you want to work with them
on commissions only.

Let’s begin:

“Whoever can spend the most to acquire a customer wins.” - Dan Kennedy.

That’s applicable to advertising, as well as to affiliate partnerships.

The higher the commissions your affiliates earn, the more likely they are to keep promoting you
over other competing products.

That brings the #1 rule: Stretch your commissions as much as you can to win more
social media real estate.

Let’s bring this into practice…

There are 2 components to your commission strategy:

1. Commission Structure
2. Commission Rate (%)

Commission Structure:

When I work with a consumable-products brand, I apply 1 of the following 3 structures

(This is an example. Actual % are for demonstration purposes only).
 Structure: First-time order commission Repeat order commission

First-time only 35% 0%

Recurring 15% 15%

Hybrid 25% 10%

1. First-time only: The affiliate gets a higher commission for every first-time buyer, and
no commissions for repeat orders. That means the brand keeps all profits from repeat
purchases.
For example: 35% for every first-time buyer.

2. Recurring: The affiliate gets a smaller commission for first-time AND repeat buyers
(could be limited to a 60-180 day period).
Example: 15% on every order from a customer they have referred, potentially for a
limited period of time.

3. Hybrid structure: mix of the two

Example: 25% commission on first-time buyers, and 10% on every repeat purchase.

Note: If your product is not a consumable and most buyers are going to be one-time buyers,
then it’s most likely the only applicable structure for you is First-time only.

The ideal way to make a decision is to… A/B test.

I do not have the magic answer here for you, because there isn’t.

Some influencers-affiliates would be excited with a higher commission %, and some would be
excited about the recurring component.

It depends on your product, category, type of influencers etc…

1. Choose 1 structure
2. Test it with your first 30-40 affiliates
3. Introduce a different one
4. Compare results

Once we have established a relationship with a few influencers, I always like to ask my
influencers-affiliates what they would prefer and collect feedback.
This is why I’m so bullish on creating relationships with your influencers, rather than looking at
them as another “lead”.
Commission Rate (%)

It’s a balance between profitability and scale.

How to decide what commission rate you should pay your influencers?
You’d have to ask yourself: how aggressively do you want to acquire customers vs. creating
immediate profit?

If you have a decent repeat buyers rate and referrals, I’d highly recommend that you start with
the highest commission you can afford without losing money.

In other words:
Break-even on front-end sales, and make all the profit on
back-end sales.

(Back-end sales could be subscriptions, repeat buyers, premium products, referrals etc.)

For example:
Example Example Fill in yours:
(first-time (Recurring)
only)

Avg. Selling $100 $100

Price

COGS $30 $30

Shipping and $15 $15

misc

Net profit % 55% 55%

Commission 50-55% 25%

(first-time)

Net profit / $0 $30

First-time buyer

Repeat buyers % 20% 20%

Recurring 0% 25%
Comm.

Net $55 $30

Profit/Repeat
order
How to get (more) traction:

If you’re just starting out, or not getting enough affiliate sales, my recommendation for you
would be to start with the highest commission possible, and then decrease if needed.

For example, when I just started with my supplement brand, we were offering a flat 40% on
every first-time order.

We also offered free shipping and a Buy 2 Get 1 Free offer, so paying 40% just broke us even.

But…

We were able to acquire customers for free + all the free content from influencers.

Our repeat orders rate was above 30% so we were able to not make money on front-end
purchases.

Once we had gathered traction and social proof with the first ~30 influencers, we lowered our
commissions to 30% and it performed as well, as the influencers could see many others were
making money with us.

Leave room for “affiliate promotions”

One thing that I like doing with brands I help implement my Massive Influence System is to run
special promotions to affiliates.

Instead of offering discounts to customers and diluting brand value, we offer a higher
commission to affiliates every once in a while.

That’s part of my Affiliate Activation Plan we put together monthly for brands within my
program.

There’s much more than just commissions…

Brands tend to think that if you’d only offer a high commission, you’d get sales.

In reality, there’s much more than that can be done to create an army of raving affiliates,
without necessarily paying more:
For example:

- Giveaways
 - Swag
- Free products
- Community

These are all ways you can get your influencers to be excited to promote you, without cutting
your margins. There’s too much to cover here so we’ll leave that to another report :)

Consider the spillover of organic sales:

Many of the influencers’ followers will not end up buying through their links or codes.

Getting affiliates to post about you means more people are aware of your brand and
product, and many of them will buy directly from you, without an affiliate code (i.e no
commissions paid) - it will result in more organic website traffic, Google brand search etc.

That means the “effective commission” you’d end up paying is much lower.

Be more bullish with your commissions and win ;)

—-----

If you want to scale your brand and create an authentic content engine
using influencers-affiliates, I can help you get there with my Massive Influence
System.

Own a system that gets you:

- More sales with an affiliate-army channel

- 60-100 pieces of 100% authentic content/month
- To diversify from Meta ads or buying fake UGCs

In 90 days.

Without:

- Paying endless monthly retainers for agencies

- Buying fake UGCs or shoutouts
- Spending (more) money on ads

Interested? Email me at hello@tomerhen.co with “Tell me more”

and we’ll take it from there.
To summarize:
- First, choose the commission structure that you’d start with, and adjust based on data
and feedback (A/B test)

- Calculate the max. Commission Rate % you can afford paying on first-time, and/or
repeat purchases.

- Start higher to get traction, and adjust when you’ve gathered enough social proof.

- Leave room for special “affiliate promotions”, discounts etc

- There’s more to be done to rally affiliates than just paying them with money.

- Consider many sales would come organically (thanks to your influencers’ posts)

- If you’d like to cut the learning curve and get all the best practices, SOPs, templates
and your very own well-trained VA - consider joining my Massive Influence program.
Email me at hello@tomerhen.co with “Tell me more” and we’ll take it from
there.
-