"How much commission should I pay affiliates?" is the first question every store owner asks. The honest answer: enough to motivate good affiliates, and low enough that every sale still makes you money. This guide gives you typical affiliate commission rates by category, a simple formula to find your own rate, and worked examples.
Typical affiliate commission rates by category
These are common starting ranges for Shopify stores selling physical products. Treat them as a starting point, not a rule:
| Category | Typical starting rate | Why |
|---|---|---|
| Electronics & gadgets | 5–8% | High prices, thin margins |
| Home & kitchen | 8–12% | Mid margins, considered purchases |
| Fashion & apparel | 10–15% | Good margins, very visual, creator-friendly |
| Beauty & skincare | 15–20% | High margins, repeat purchases |
| Supplements & wellness | 15–25% | High margins, strong repeat rate |
| Digital products & courses | 20–30%+ | Almost no cost per extra sale |
Your margin matters more than your category. A fashion brand with 70% gross margin can pay more than one with 40%.
The formula: work back from your margin
Use this simple calculation per order:
Max commission = gross profit − shipping − payment/COD fees − expected return cost − profit you want to keep
Then pay affiliates a comfortable share of what is left.
Example: a fashion store
- Average order: $60
- Product cost: $21 (65% gross margin → $39 gross profit)
- Shipping and fees: $7
- Return/refusal cost spread over all orders: $3
- Profit you want to keep per order: $20
$39 − $7 − $3 − $20 = $9 available → about 15% of $60. A 12–15% rate is safe here. Save higher rates for creators whose customers come back and buy again, because repeat orders raise the profit per customer.
Example: an electronics store
- Average order: $150, gross margin 25% → $37.50
- Shipping and fees: $10
- Profit to keep: $18
$37.50 − $10 − $18 = $9.50 → about 6%. Paying 15% here would lose money on every affiliate order.
Percentage or fixed commission?
- Percentage (for example 12% of subtotal) is the most common and scales with order size. Most affiliates understand it instantly.
- Fixed amount (for example $5 per order) suits stores with one main product or very different margins across products.
Calculate the commission on the subtotal after discounts, excluding shipping and tax. Say so in your terms.
How COD changes the math
If you sell on cash on delivery, some orders are never delivered. If you pay commission on placed orders, the real cost is much higher than the rate suggests. Paying 10% when a quarter of orders are refused means you actually pay about 13% of delivered revenue, plus the wasted shipping.
The fix is to approve commission only after delivery. Then your rate is your true cost, and you can afford to be more generous. Read more in our COD affiliate marketing guide.
Should you offer the customer a discount too?
An affiliate coupon (for example 10% off with SARA10) usually lifts conversion. It also costs margin, so count it in the formula:
Commission + customer discount ≤ the amount available per order
A common split for fashion and beauty is 10% for the affiliate + 10% for the customer. If your margin is thinner, use 8% + 5%.
Tiered and custom rates
You don't need one rate for everyone:
- Default rate for every new affiliate
- Higher custom rate for proven creators (for example 12% → 18% after 50 delivered orders)
- Invite & earn bonus: affiliates who recruit other affiliates earn a share of the recruit's commission (for example 20% of it), paid by you on top. Count this in your budget too. At a 15% rate, a 20% team bonus adds 3% on recruited affiliates' orders.
Start simple. One default rate plus custom rates for your top 10 affiliates covers most stores.
How to know your rate is working
Check these every month:
- Active affiliates: are new affiliates posting within their first two weeks?
- Orders per active affiliate: is it growing?
- Cost of sale: total commission ÷ affiliate revenue. Keep it below your target.
- Reversal rate: a high rate for one affiliate signals low-quality traffic.
If plenty of people sign up but few post, the rate may be fine and the onboarding weak. If nobody signs up, look at the rate and how you present it.
Set your rate in Taguu
In Taguu you set a default rate (percent or fixed), an optional customer discount for affiliate coupons, a custom rate per affiliate, and the team bonus for invite & earn. Commissions are approved only after delivery, so the rate you choose is what you actually pay. New to affiliate programs? Start with how to start a Shopify affiliate program.
FAQ
What is a good affiliate commission rate for a Shopify store?
For most physical products, 10–20% of the order subtotal. Lower for low-margin categories like electronics, higher for beauty, supplements and digital products.
Is 10% commission good for affiliates?
For fashion, home goods or mid-priced products, 10% is a fair starting rate, especially paired with a 10% customer discount. Top creators may expect 15% or more.
Should commission include shipping and tax?
No. Calculate commission on the product subtotal after discounts, excluding shipping and tax.
Can I change my commission rate later?
Yes. Give affiliates notice, apply the change to new orders only, and honor the old rate on orders already placed.