What does affiliate marketing cost?

Affiliate marketing has three cost lines: publisher commission, software or network fees, and management. Looking only at commission gives you the wrong number.

By
DIKKE KASSA editors
European affiliate team
Topic
Commission
Read time
2 min read

The three lines

Publisher commission is paid on approved sales, usually a percentage of order value excluding VAT and shipping. Software cost depends on the platform or network — sometimes fixed, sometimes a percentage.

Management is the time or fee to launch and keep the programme running: finding partners, onboarding, campaigns, fraud checks and payments.

Our model

At Dikke Kassa management is €299 per country per month plus a 3% performance fee on affiliate revenue. Publisher commission and any software cost are separate.

The advantage of a fixed price per country is predictable expansion: every extra market is one more €299 per month, with no negotiation per market.

What is realistic on commission?

Rates vary widely by category. Fashion and lifestyle often sit between 6 and 12 percent, electronics and marketplaces lower because of thin margins, digital products and subscriptions higher.

Always work back from gross margin. At 40% margin, paying 10% commission plus a 3% fee still leaves room; at 12% margin it does not.

A worked example

Say €50,000 affiliate revenue per month across two countries at 8% publisher commission. That is €4,000 commission, €598 management and €1,500 performance fee: €6,098 in total, roughly 12% of revenue.

At 40% gross margin that revenue carries €20,000 of margin against €6,098 of cost. Model your own scenario in the calculator before you fix any percentage.

Hidden costs

Account for returns and cancellations: those get declined, so budget on net revenue. VAT, shipping and voucher discounts belong outside the commission base.

Don't forget internal time. Feeds, banners, product data and approvals cost hours if nobody takes them over.

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