Ecommerce Affiliate marketing is a booming advertising and referral medium for e-commerce stores. The commission earned by third parties, referred to as affiliates, for the sale of a company’s product or service needs to be calculated based on certain parameters.
The following parameters decide to affiliate commission rates for the affiliate program manager.
- Determination of the maximum rate of payment affordable to pay
- Incentives and bonuses as factors for encouragement to perform better
- Comparison of commission rates with other marketing competitors
In order to manage and calculate affiliate commission for eCommerce sales, it is essential that an automated tool is utilised to set commission rates and make payments to affiliates.
Various E-commerce platforms provide for automated calculation of commission rates for affiliates. One such marketing software is the 1shopping cart, which works as one of the secure, powerful e-commerce online store software.
Calculation of Affiliate Commission
In 1shopping cart, this automation in the calculation of the affiliate commission takes the help of a referrer code. Once you fill in the details for the affiliate, the software generates a referrer code. It generates the referrer code for each of the affiliates that login to the e-commerce software. This process further generates a unique link for sale by that specific affiliate.
This type of automation to calculate the affiliate commission rate gives a fast-pace compilation of the necessary amount that one needs to pay to the concerned affiliate with no complication. It is also a simple and secure procedure to ensure accurate allocation of the affiliate commission rates. This is because it assigns affiliate commission to the respective referrer code.
Further optimization of this software is brought about by the addition of a flexible feature wherein it can produce a report of various periods regarding the calculation of affiliate commission rate. These amalgamations of unique id/code and calculation in terms of the period make these affiliate marketing applications essentiality in the field of e-commerce.
Various major E-commerce sites like Amazon, Flipkart acts as a third-party distributor and distribute revenue with the help of affiliate commission. As the e-commerce business dynamics are increasing day-by-day, the options for the method of payment between the sellers and the sites, affiliate commission remains a top choice. It provides advantages to both parties.
Advantages of affiliate commission:
- Pay Up To Your Sales: In affiliate commission, a commission is granted on the total sales made in a period. We charge it on a pre-determined percentage on overall sales. This means you have to pay the site only the amount of revenue you earned.
- Eliminate Overhead Expenses: It reduces the other overhead expenses like processing fees, set-up charges to a great extent. Affiliate commission program eliminates the cost of your marketing campaign, which otherwise you have to bear at certain risks.
- Cost-Effective: Commission based payments, elimination of overhead expenses eventually make affiliate commission a cost-effective option to choose. You can go for vendors that charge low set-up fees