Affiliate Commission Calculator

Commission cost, and why it is the only channel you pay after the sale

An affiliate commission is what you, as the programme owner, pay a partner for a sale they referred. Nothing is paid for reach or clicks — only for a purchase that actually happened, which makes it the one channel where the cost cannot arrive before the revenue. That also means the interesting figure is not the rate but what the arrangement costs you per customer won: the affiliate CAC, and how it compares with your other channels.

One thing to be clear about, because the same number is used in both directions: this page is the merchant's view, where the commission is an expense. If you are the one receiving it, the mirror image is the Affiliate Marketing ROI Calculator, which sets those commissions against the work that earned them.

The commission formula, then the same number read as an acquisition cost

Commission per sale = revenue per sale × (commission rate ÷ 100)

Affiliate CAC = commission cost per month ÷ referred sales

How to calculate commission, monthly cost and CAC from two numbers

$100 revenue per sale, a 10 % commission rate, 20 referred sales a month:

Why affiliate commission rates tell you less than the CAC they produce

A commission rate on its own says almost nothing about whether the channel pays. What matters is the affiliate CAC next to your other channels. If a referred customer costs you $10 while your blended CAC is $50, affiliate is an unusually cheap way to acquire. Because you pay only on a completed sale there is none of the wasted-budget risk of paid media — but the channel also scales no further than your partners' reach. Raise the agreed rate or let the order value slip, and the affiliate CAC climbs until the advantage is gone.

Note what the CAC card is really telling you: with one referred sale per customer it equals the commission per sale exactly. That is not a rounding artefact but the assumption behind it — the moment repeat purchases from the same referred customer enter the picture, the two numbers part company, and the CAC is the one that still answers «what did this customer cost me».

Keeping affiliate marketing cost inside the margin it has to come from

• Set the rate from the contribution margin, not from what competitors pay: the commission has to be payable out of the margin on that order. If it exceeds the contribution margin you lose money on every referred sale, however good the channel looks — check the ceiling with the Profit Margin Calculator.
• Price recurring commissions over their whole life, not per period: with subscriptions you pay for many periods. That is defensible while the lifetime commission stays below the customer's lifetime contribution margin, and indefensible the moment it does not. The card above gives you the first half of that comparison.
• Judge the channel against your other CAC, not against zero: compare the affiliate CAC with your customer acquisition cost from paid and organic. As long as affiliate acquires more cheaply and the margin carries the rate, a larger programme budget is the obvious move — and if it does not, the rate is the lever, not the volume.