Pay Affiliate from gross or net sales?

3 replies
Just wanted to know if I pay my affiliate from the gross sale or net sale?

My product is a physical one so I have to pay the cost of the postage, packaging, delivery and fulfilment.

So do I pay their commission AFTER I have deducted these costs or do I pay them before that?

Thanks
#affiliate #gross #net #pay #sales
  • Profile picture of the author MeelisM
    Originally Posted by Info-seeker View Post

    Just wanted to know if I pay my affiliate from the gross sale or net sale?

    My product is a physical one so I have to pay the cost of the postage, packaging, delivery and fulfilment.

    So do I pay their commission AFTER I have deducted these costs or do I pay them before that?

    Thanks
    Wait you are asking us what you are doing?



    We have not seen your business model and do not know how you do your business.

    So I suggest you look at your numbers and try to find out if you're paying the affiliates from gross or net sale.

    I just answered your question the best way possible.



    But I do believe you meant to phrase the question in a different way.

    You were probably asking for advice on if you should pay affiliates from gross or net sales.

    Well it depends on what your goal is.

    Do you want to make your affiliates happy and make sure you attract lots of them and they keep promoting your business?

    Or do you just want to get maximum profit for yourself in the short run?

    (Also paying affiliates the bigger chunk doesn't guarantee it will be more profitable in the long run, they might just take most of the profit and that's it)

    I suggest you try out different ways on dealing with this and see what gives the best results. Why don't you let customers pay for shipping?

    Look at all your metrics on how much everything costs and how much do you earn if you do it one way or the other.

    And then you will get your answer.

    Because we have no idea on what your business is about, any of the numbers or anything.

    Just my quick thoughts,

    MeelisM
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  • Profile picture of the author mightyone
    You obviously take into account your revenue-expenses and then pay a commission on the full cost of product that you can afford.
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    • Profile picture of the author Sid Hale
      Your affiliate has no way of knowing what your costs are, therefore they have no way of knowing what your net sales are.

      You ALWAYS pay commissions on gross sales price.

      Commissions are just one more expense that you deduct from your gross sales price to calculate what your net sales are.
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      Sid Hale
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