A good affiliate commission is one that costs less than about 20 to 35% of a customer's lifetime gross profit and less than your paid-ads cost per customer. Many SaaS programs pay 20 to 30% recurring for 12 months. Example: on a $49/month plan with 3% monthly churn and 80% margin, 25% recurring for 12 months costs about $125 per customer, under 10% of gross profit.
How to read the results
The number that matters most is the share of gross profit. It tells you how much of what a customer is worth goes to the partner who brought them. As a rough guide:
- Under 20%: healthy. You can afford this at scale, and you probably have room for bonuses.
- 20 to 35%: workable, especially if partner customers churn less than your average (they often do, because someone they trust recommended you).
- Over 35%: expensive. Shorten the window, lower the rate, or keep the high rate only for your top tier.
Then compare the cost per customer with your ad CAC. Partners usually cost you nothing until they deliver a paying customer, while ads cost money whether they convert or not. If commission is cheaper than paid acquisition, that's your case for budget.
Which commission model should you pick?
| Model | Works best when | Watch out for |
|---|---|---|
| Recurring % | You sell monthly subscriptions and want partners to care about customers who stay. | Lifetime recurring adds up. A 12-month window is easier to fund. |
| One-time % | Customers usually pay annually, or you want simple, predictable payouts. | Partners have no reason to send customers who stay. |
| Flat bounty | Your plans are similarly priced and you want the simplest message ("$150 per customer"). | Partners will push your cheapest plan. Overpays on small plans. |
| Tiered | You have a few partners driving most of the volume and want to reward them. | Keep it to three tiers, or nobody remembers the rules. |
If you're just starting, pick one model and one rate. You can add tiers later, once you see who actually performs. Need the rest of the setup? Read how to start an affiliate program with zero budget.