The four cost lines
You deal with management (agency or internal), tech (software or network), publisher commission and occasional extra fees for placements or campaigns.
With us the first two are clear: €299 per country per month plus a 3% performance fee on affiliate revenue. Publisher commission is yours to set.
A worked example
Say one market, €50,000 affiliate revenue per month and 8% publisher commission. You pay €4,000 commission, €299 management fee and €1,500 performance fee. Total €5,799 in channel cost, just over 11% of revenue.
At 40% gross margin you still keep around €14,200 on that €50,000. Set commission too high and that room disappears fast.
Setting commission from margin
Work backwards: gross margin minus your required contribution per order gives the room for commission. Differentiate between high and low margin categories.
Reward incremental revenue, for example a higher rate for new customers and a lower base rate for repeat purchases via discount sites.
What to track monthly
Watch revenue per publisher type, average order value, cost as a percentage of revenue and the share of new customers. Together those four tell you whether the channel grows healthily.
Compare with your other channels on incremental value, not on last click alone.