Launching an affiliate program is a powerful step towards scaling your business, but its success often hinges on one crucial detail: your commission structure, or what actions you will reward affiliates for. The right model can motivate affiliates, attract top performers, and drive profitable growth. The wrong one can lead to unmotivated partners and wasted potential.
So, how do you decide between paying for a sale, a lead, or an action? Understanding the different commission types is the key to designing a program that aligns with your business goals and creates a true win-win partnership. Let's break down the most common models to help you find the perfect fit for your brand.
Cost Per Action (CPA): Paying for a Specific Result
Cost Per Action (CPA) is one of the most popular and straightforward commission models. With this structure, you pay affiliates a fixed amount for a specific action a customer takes. While that action is most often a completed sale, CPA can also be used for other valuable conversions.
Cost Per Sale (CPS): This is the classic model. An affiliate earns a commission only when a customer they referred makes a purchase. The reward can be a fixed amount (e.g., $15 for every sale) or a percentage of the total sale value (e.g., 10% of the order total).
Cost Per Lead (CPL): In this model, the desired action is lead generation. You pay the affiliate for every qualified lead they send your way, such as a form submission, a free trial sign-up, or a newsletter subscription.
Cost Per Action (CPA): This is an extension of a CPS/CPL type where you pay a commission only when a referred user completes a specific, predetermined action. This action doesn't necessarily have to be a sale. It can be any valuable engagement that the advertiser wants to encourage.
Best for:
SaaS businesses offering free trials or demos.
Services where the purchase happens after initial engagement.
E-commerce stores
Digital product sellers
Example:
A CRM software pays affiliates $10 for every user who signs up for a free trial.
Why choose CPA? It's a low-risk, high-reward model for merchants. You only pay for a tangible result that directly contributes to your bottom line, ensuring a clear return on investment (ROI). It's simple for affiliates to understand and is the industry standard for most physical and digital product sales.
Revenue Share (RevShare): Creating a Long-Term Partnership
Revenue Share (RevShare) is a commission model where you share a percentage of the revenue generated by a customer with the affiliate who referred them. This model is especially popular for subscription-based businesses and services, as it creates a long-term incentive for affiliates.
How it works: Instead of a one-time payout, the affiliate earns a commission every time the referred customer makes a payment. For example, if an affiliate refers a customer to your monthly subscription service, they would earn a percentage of that subscription fee for a specified period, or even for the entire lifetime of the customer.
Lifetime Commissions: This is a powerful type of RevShare where the affiliate continues to earn a commission for as long as the referred customer remains a paying client.
Why choose RevShare? It's incredibly motivating for affiliates. By offering recurring commissions, you encourage them to find high-quality, loyal customers, not just one-time buyers. This model aligns the affiliate's goals perfectly with the long-term success of your business, fostering a stronger and more dedicated partnership. For SaaS, membership sites, and other recurring revenue businesses, RevShare is often the most powerful and sustainable model.
Best for:
SaaS and subscription businesses
Membership platforms or recurring billing models
E-commerce stores
Digital product sellers
Example:
A subscription software offers affiliates 20% revenue share for every monthly payment made by referred users for their first 12 months.
Choosing the Right Model for Your Business
The ideal commission structure depends entirely on your business goals and what you want your partners to achieve.
Choose CPS (Cost Per Sale) if you run a traditional e-commerce store and want to drive direct sales.
Choose CPL (Cost Per Lead) if your sales cycle is longer and you want to fill your pipeline with potential customers.
Choose Revenue Share if you run a subscription-based business and want to attract high-quality, long-term customers.
💡 Pro tip: You don't have to be locked into a single structure. Instead, you can create a hybrid model or set different commissions for different products or partners.
Implement Your Perfect Commission Structure with Tapfiliate
Feeling empowered to design the perfect compensation plan for your partners? Tapfiliate provides the flexibility you need to run your program, your way. Our platform fully supports:
Percentage-based and flat-rate CPA commissions.
Recurring (RevShare) commissions for subscription businesses.
Per-product commission rates.
Performance-based bonuses to reward your top affiliates.
With Tapfiliate, you can easily set up the commission structure that best aligns with your business goals and motivates your partners to drive real growth.
Ready to build a powerful and flexible affiliate program? Start your free trial of Tapfiliate today and explore how easy it is to manage and scale your partnerships.