---
title: Commission Structures and Economics — RGM Training
url: https://realgrowthmatters.com/training/affiliate-marketing/commission-structures-and-economics/
updated: 2026-06-10
source_html: https://realgrowthmatters.com/training/affiliate-marketing/commission-structures-and-economics/
---

[Home](../../../index.html) › [Training](../../index.html) › [Affiliate Marketing](../index.html) › Commission Structures and Economics

RGM° · Training

# Commission Structures and Economics

Determines partner mix and economics. Models, tiers, incentives, economics, adjustments, compliance.

### What you will learn

1. [Why commission structure matters](#why)
2. [Commission models](#models)
3. [Tier design](#tiers)
4. [Incentive design](#incentives)
5. [Unit economics](#economics)
6. [Commission adjustments](#adjustments)
7. [Compliance](#compliance)
8. [Advanced](#advanced)
9. [Mistakes](#mistakes)
10. [Checklist](#checklist)

## Why commissions

Commission structure determines partner mix, fraud risk, and unit economics. Wrong commission = wrong partners attracted; right commission = sustainable program.

## Commission models

- Revenue share (% of order).
- Flat CPA per conversion.
- Tiered (different rates per partner tier).
- Hybrid (flat + commission).
- Sliding scale (volume-based increases).
- Category-specific rates.

## Tier design

- Base tier: most partners.
- Mid tier: proven partners.
- Top tier: highest performers; invited.
- Custom: strategic partners.
- Tier-up criteria documented.
- Tier benefits clear.

## Incentives

- Time-limited bonuses.
- Performance milestones (X conversions = bonus).
- New customer bonuses.
- Category exclusivity premiums.
- Co-marketing fund.
- Annual contest prizes.

## Economics

- Commission as % of margin.
- Sustainable commission rate per partner type.
- Coupon affiliate margin erosion.
- Cohort LTV by source.
- Cost per new customer acquired.
- Annual commission rate review.

## Adjustments

- Performance-based increases.
- Category changes.
- Seasonal bonuses.
- Promotional period adjustments.
- Communication to partners.
- Migration plan.

## Compliance

- FTC disclosure requirements.
- State tax implications.
- 1099 reporting.
- International payment compliance.
- Anti-fraud agreements.
- Termination terms.

## Advanced

- Tiered commission structure.
- Partner-type-specific rates.
- Cohort LTV by source informs rates.
- Annual commission review.
- Coupon margin protection.
- New customer premium.
- Performance bonuses.
- Long-term contracts for strategic partners.
- Compliance documentation.
- Annual cost-of-program assessment.

## Mistakes

- Single flat commission across all partners.
- Coupon affiliates over-paid; margin destroyed.
- New customer vs existing customer not differentiated.
- Cohort LTV by source not tracked.
- Annual review skipped.
- Compliance reactive.
- Tier structure absent.
- Performance bonuses ad-hoc.
- Strategic partner commission generic.
- Communication on changes poor.

## Checklist

- Commission models documented
- Tier structure
- Partner-type-specific rates
- New vs existing customer differentiation
- Cohort LTV by source
- Annual commission review
- Coupon margin protection
- Performance bonuses defined
- Strategic partner contracts
- Compliance documentation

## Sources and further reading

- Impact, Awin, CJ commission research
- Affiliate Summit content
- PMA Performance Marketing Association
- RGM Performance Marketing budget module
- Andrew Faris affiliate economics
- Common Thread Collective affiliate playbooks
- FTC affiliate guidelines
- RGM Marketing Operations finance module
- Marketing Brew affiliate coverage
- MMA affiliate research
- Affiverse benchmarks
- Awin annual reports

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Part of the [Affiliate Marketing](../index.html) series.