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How Much Should You Pay Affiliates? Commission Rates by Industry

A method rather than a number: the margin ceiling, the market floor, typical ranges by category, and why the rate matters less than three other things on your offer.

By Nora Ellis, Affiliate Marketing & Creator Economy Writer · with Wooly Network, Advertiser Success · 23 September 2026 · 6 min · Affiliate Marketing

Set your affiliate commission between the market floor, which is what partners can earn promoting something else in your category, and your margin ceiling, which is the most you can pay and still profit on the customer. Digital products commonly pay 20% to 50%, SaaS 20% to 30% recurring, and physical goods 5% to 15%, because the ceiling moves with cost of goods and the floor moves with competition.

The number itself is the last decision, not the first. Here is the order to make it in.

Step 1: find your ceiling

Your ceiling is contribution margin, not revenue, and not gross margin before fulfilment.

Contribution margin = price, minus cost of goods, minus payment fees, minus shipping, minus expected returns.

Then decide what share of that margin you are willing to spend to acquire a customer through this channel. A common, defensible split is a third to a half of first-order contribution for one-off products, and more when there is repeat business to recover it from.

	Physical product	Digital course	SaaS, $59 per month
Price	$120	$199	$59 per month
Cost of goods or delivery	$48	$6	$8
Fees, shipping, returns	$18	$8	$2
Contribution margin	$54 (45%)	$185 (93%)	$49 (83%) per month
Repeat behaviour	1.8 orders	Rarely	11 months average
Defensible commission	$8 to $16 (7% to 13%)	$60 to $90 (30% to 45%)	25% to 30% for 12 months

The pattern holds everywhere: the higher your marginal cost, the lower your rate, and no amount of enthusiasm changes it.

Step 2: find your floor

Partners choose between offers. Your rate has to survive that comparison, but on earnings per click rather than on percentage. Three ways to find the real floor in your category:

Read the competition's programme pages. Most publish the rate, the attribution window and the payment terms.
Browse a marketplace catalogue. Live offers in your category, with their commissions visible, is the fastest read on the market available.
Ask three partners directly. Sophisticated affiliates will tell you what they earn per thousand clicks elsewhere, because it is in their interest for you to price sensibly.

Then convert your offer to the same unit: earnings per 1,000 clicks = conversion rate x order value x commission rate x 1,000. That is the figure a partner is actually comparing, and it is why a 6% commission on a $400 product beats a 30% commission on a $40 one.

Typical ranges by category

Use these as orientation, not as a rate card. The spread within any category is wider than the spread between them, and it is driven almost entirely by margin.

Category	Common range	Model that usually fits	Why
SaaS and software	20% to 30% recurring	Revenue share, 6 to 12 months	Near zero marginal cost, retention is the business
Digital products and courses	30% to 50%	Percentage of first sale	Almost no delivery cost, no repeat purchase to recover from
Fashion and apparel	5% to 15%	Percentage of first sale	Returns are high and eat the margin
Beauty and supplements	10% to 25%	Percentage, sometimes recurring on subscriptions	Good margins, strong repeat purchase
Consumer electronics	1% to 5%	Percentage or flat CPA	Thin margins on high ticket items
Home and furniture	3% to 10%	Percentage	Shipping and returns are expensive
Finance and insurance	Flat fees, often large	CPL or CPA	Sale happens off-platform, lifetime value is high
Travel	3% to 8%	Percentage, paid after travel	Thin margins, high cancellation rate
B2B services	Flat fee per qualified lead	CPL	Long sales cycle, human closes the deal

For a real, published reference point at the low margin end, Amazon Associates runs a category rate card that spans roughly 1% to 20%, with most everyday categories in low single digits and mainstream electronics near the bottom. That is what a huge retailer with thin margins and enormous conversion rates can afford; it is not a benchmark for a brand selling its own product.

The three things that matter more than your rate

This is the part most rate discussions miss. Partners are estimating earnings per click and the probability of actually being paid. Four levers move those, and only one of them is the percentage.

Conversion rate. Doubling your landing page conversion doubles partner earnings at no extra cost to you. It is strictly better than raising the rate, and it is entirely in your control.
Attribution window. Moving from 7 days to 30 days costs you nothing on sales you would not otherwise have credited, and it materially changes what partners earn on considered purchases.
Payment speed and approval speed. A programme that pays in 30 days and approves weekly is worth a few points of commission against one that pays in 90 and approves when someone remembers.
The brief and the assets. Reducing the work required to publish raises the number of partners who actually do.

If your programme is underperforming, work down that list before you raise the rate. Raising the rate is the one change you cannot take back without annoying everybody.

Tiers, bonuses and exceptions

Volume tiers. A base rate with a higher rate above a monthly threshold. Rewards the small number of partners who will carry most of the programme, and it recruits well because it is visible ambition.
New customer premium. Pay more for a first-time buyer than for a returning one. Directly addresses the incrementality complaint.
Launch windows. A temporary uplift concentrates partner attention on a date, which is worth more than the same money spread thinly.
Negotiated rates for strategic partners. Normal and sensible. Keep the public rate honest and treat exceptions as exceptions.
Rate by partner type. Content partners who create demand, and last-click partners who intercept it, are doing different jobs. Paying them identically is the most common pricing mistake in the channel.

On Wooly Network: commission, model, attribution window, approval mode and validation rules are all per campaign, so different rates for different partner types means running two campaigns, not negotiating one by one. See how campaigns are set up.

Sanity checks before you publish a rate

Run it against your worst order, not your average: cheapest product, biggest discount code, free shipping applied.
Add the platform fee. On a percentage override model, commission plus override is your real cost of sale. Wooly Network publishes its affiliate platform fees by plan, so the number is easy to plug in.
Check it against your paid acquisition cost. If affiliate is materially cheaper, you can afford to be more generous, and you probably should be.
Ask whether you would be happy paying this rate a thousand times. If the answer is no, the rate is wrong, not the partner.

Common questions

Is a higher commission always better for recruiting?

No. Above a certain point a very high rate reads as desperation or as a product that does not convert, and experienced partners discount it. Conversion rate and payment reliability recruit better than an outlier percentage.

Should I pay commission on the discounted price or the full price?

Most brands pay on the amount actually charged, excluding tax and shipping. Whichever you choose, state it in the validation rules, because this is a leading cause of disputes.

Can I lower a commission rate later?

For future clicks, yes. Announce it before it happens, and expect some partners to leave. If you are lowering it because the programme is unprofitable, check first whether the real problem is partner mix rather than the rate.

What about paying a flat fee instead of a percentage?

Good when basket size is stable and you want predictable unit economics. It needs a minimum order value, or partners will rationally push the cheapest qualifying product. The model comparison goes through this.