How much should you pay affiliate partners, and how? The answer shapes your margins, which partners you attract and how fast your programme grows. Here are the main ways affiliate deals are priced, when to use each, and how to combine them.
Cost per acquisition (CPA)
What it is: the partner earns a commission when a customer buys through their link. It is usually a percentage of the sale (for example, a share of order value) or a fixed amount per sale.
Best for: the backbone of most programmes. You pay only for results, which makes it the lowest-risk way to enter a new market.
Watch out for: set rules for returns and cancellations so you are not paying commission on sales that do not stick, and agree how long partners have to wait for validation.
Tiered and dynamic commission
What it is: rates that change based on performance, customer type or product. For example, a higher rate for new customers than for returning ones, higher tiers for partners who pass sales thresholds, or different rates by product margin.
Best for: rewarding the partners that drive real growth and protecting margin on low-margin products.
Fixed fees
What it is: a flat payment for a guaranteed placement, such as a spot in a buying guide, a dedicated review, a newsletter feature or a creator video. Sometimes called a tenancy or placement fee.
Best for: getting onto high-value editorial and creator content quickly, especially when you are new to a market and publishers cannot yet judge how well you convert.
Watch out for: agree exactly what you are buying (placement, duration, audience, reporting) and track results so you can compare fixed-fee placements with CPA partners.
Hybrid: fixed fee plus commission
What it is: a lower fixed fee combined with commission on sales.
Best for: sharing the risk. The partner gets guaranteed income, you get lower upfront cost, and both sides benefit when the placement performs.
Cost per lead (CPL) and cost per click (CPC)
What they are: payment for a sign-up, enquiry or app install (CPL), or for each click (CPC).
Best for: CPL suits services, subscriptions and B2B, where the sale happens later. CPC is less common in affiliate marketing because it pays for traffic rather than results.
Which model should you use?
| Model | You pay for | Risk to brand | Best use |
|---|---|---|---|
| CPA | Sales | Low | Core programme, all partner types |
| Tiered CPA | Sales, at varying rates | Low | Rewarding growth, protecting margin |
| Fixed fee | Guaranteed placement | Higher | Premium editorial and creator content |
| Hybrid | Placement and sales | Medium | New partnerships, shared risk |
| CPL | Leads or sign-ups | Medium | Services, subscriptions, B2B |
Most successful programmes combine them: CPA as the foundation, tiers to reward top partners, and a fixed-fee budget for the placements that build credibility fastest. For a brand entering the West, that mix is often what unlocks the first wave of premium coverage. Read more about what publishers look for in a new brand.
Other costs to budget for
- Platform or network fees: a monthly fee, a percentage override on commissions, or both.
- Product samples for reviewers and creators.
- Programme management: in-house staff or an agency to recruit, manage and optimise partners.
How agencies are paid
Programme management agencies typically charge a monthly retainer, a performance fee based on results, or a hybrid of the two. At Red Thread we offer all three, so brands can choose based on budget and appetite for risk. See our services or book a call to talk it through.
Need help setting commissions? We plan commission structures and negotiate fixed-fee placements for Chinese brands in the US, UK and Europe. See our affiliate marketing service.
FAQs
What is a good affiliate commission rate?
There is no single answer. Rates depend on category, margins, average order value and what competitors pay. Benchmark against similar brands in your market, then adjust for partner type and customer type.
What is the difference between CPA and fixed-fee affiliate deals?
CPA pays only when a sale happens. A fixed fee is paid upfront for a guaranteed placement, whatever the sales. Hybrid deals combine the two.
Are fixed fees worth it?
They can be, for the right placements. A feature on a trusted review site can drive sales and credibility for months. Track every fixed-fee placement so you know which ones pay back.
