Recurring commission or one-time affiliate marketing payouts? The pros and cons

One of the biggest decisions to make when establishing your affiliate marketing program is how you’re going to pay your affiliates. You want the influencers you work with to feel rewarded, valued, and motivated to continue to earn. So, what should you go with? A one-time payout system, or recurring commission? Here’s what to know about both.

What are my options for paying affiliates? 

The three most common ways brands pay their affiliates are:

• One-time payouts: These programs offer affiliates a single payout when a customer completes an action through their affiliate link. The action could be signing up for a service, subscribing to a newsletter, or making a purchase. 
• Recurring commission: These programs offer affiliates ongoing commissions on a set schedule for as long as a customer continues a subscription or membership after signing up through a link. 

Sometimes brands opt to pay their affiliates through non-monetary means, usually through free product, services, or deep discounts. However, it’s generally advisable to avoid these methods, as affiliates feel most rewarded via traditional compensation. To build a lasting, profitable affiliate relationship with the people who do the selling for you, make them feel valued and appreciated with the best system to support their livelihoods. 

One-time payouts: the advantages

If you’re leaning toward a one-time payout system for your affiliates, here are the perks: 

1. The tracking is easier: Payouts are tied to an isolated event, so tracking revenue earned and other affiliate KPIs is straightforward. 
2. Larger and quicker pay: One-time payouts give your affiliates higher initial earnings. This keeps affiliates motivated and is ideal for those looking to generate quick revenue. 
3. More appealing for luxury or high-priced products: Promoting more expensive items and getting customers to convert means a bigger payday for the affiliates. 

On the flip side, one-time payouts can be inconsistent. Typically, affiliates also do not receive additional payments if a repeat customer buys again with this model. It’s all about making that first quick action or sale and being rewarded immediately. 

This model is often used for e-commerce stores or stores that offer one-time service purchases. 

Recurring commission: the advantages

If you’d rather go with a recurring commission structure, here are the benefits: 

1. Improved lifetime value: An affiliate sale that’s a 12-month subscription could generate much more revenue than a one-off purchase.
2. More predictable income: Affiliates can appreciate knowing when their next payday is coming. They could also be motivated to snowball their earnings and build more financial stability for themselves this way.
3. Boosted customer satisfaction: Customers stay happy and subscription-loyal when they understand the value of their membership. Happier customers, more retention, and earnings for the affiliate and the brand. 

Some of the downsides for recurring commissions include smaller starter earnings and customer churn. Earnings growth can also be slow to start, potentially demotivating affiliates to want to grind to sell sell sell. 

This model is, of course, most often used for SaaS or subscription-based products. 

Why a blend of both might be your best bet

In many cases, you don’t have to choose between recurring and one-time payouts. Some affiliate programs use both, giving affiliates the financial stability of an expected check and large bonus payments to motivate and reward them. 

For example, you could offer recurring commissions for subscription-based services or products, and you could occasionally provide bonus payouts as a type of promotion. Maybe it’s a new product they’re selling. Maybe the bonus one-time payouts are for pricier plans or seasonal items. You can get creative and incentivize affiliates to grind a little harder from time to time with this blended structure. 

Use an affiliate marketing software that can support your whole program

Whichever affiliate payment structure you go with, set it up in a system that makes it easy. At Simple Affiliate, you can enjoy comprehensive dashboards, automatic payouts and tax forms, and easy affiliate performance monitoring and management. It’s tooling to fit any size company on Shopify, and is trusted by hundreds around the world. 
Book a demo with our team today so we can show you just how simple affiliate marketing management is.