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Roles and players

Advertiser (merchant)

Also called advertiser, merchant, webshop, brand, annoncør.

Short answer

An advertiser is the store or company that runs the affiliate program, sets the commission rate and pays for sales. The role is also called the merchant, and it is the counterpart to the affiliate.

Definition of Advertiser (merchant).

The advertiser is one of the two parties in affiliate marketing. The store decides what triggers a commission – a purchase, a lead, an install – and how large that commission is. That decision is also a bid in a market: if the rate is too low, affiliates choose another program, and the store gets no traffic without having spent a penny.

The payment model is what sets the channel apart from ordinary advertising. The advertiser pays for results, not for impressions or clicks, so the risk sits with the affiliate, who has put the work into the content before anything is earned. In return, the advertiser is obliged to make the result measurable and to pay for what is measured.

The role is called advertiser or merchant depending on language and system. On Danish platforms you also see the words butik (store) and webshop, even though an advertiser does not have to sell physical goods – subscription services, insurance companies and software businesses run programs on the same model.

The advertiser's responsibilities in the program

Three things belong to the advertiser alone: that tracking works, that sales are processed within the agreed deadline, and that the terms are written down before the affiliate starts. A program without written terms is not an offer but an intention – and an intention can change without anyone being able to say when.

On top of that comes the ongoing work: approving or rejecting sales with a reason, keeping product information up to date, and giving notice of changes to campaigns and rates. A rate that drops without notice costs more in trust than it saves in commission.

What the channel actually costs

The cost has two parts: the commission to the affiliate and the network's fee. The fee is calculated as a share – of the commission or of the store's total price – and what matters is whether the affiliate receives the rate shown or whether the fee is deducted from it.

The calculation should be done on contribution margin, not on revenue. 10 % of order value is cheap for a store with a 60 % contribution margin and expensive for a store with 15 %. Commission is also normally calculated on the amount excluding VAT – include the VAT and you overestimate your cost by a quarter (Danish VAT is 25 %).

Advertiser vs. affiliate

AspectAdvertiserAffiliate
RoleSells the product and runs the programSends traffic to the product
Pays or receivesPays commission plus a network feeReceives commission
RiskPays only once the sale has happenedWorks before anything is earned
DecidesRate, terms and approval of salesChannel, content and choice of programs

The advertiser sets the framework and the affiliate works within it – and both sides must be able to see the same numbers before the arrangement holds.

How it goes wrong

  • 01

    A rate set without looking at margin

    A rate set according to what other programs show can sit above the store's own contribution margin on the products that actually sell. Calculate per product category, not on the average across the whole range.

  • 02

    Sales left sitting

    Pending sales that are never processed cost affiliates cash flow and cost the store partners. Process them continuously – or make sure the deadline approves them automatically, so the wait has an end.

  • 03

    Tracking that breaks unnoticed

    If the tracking script is changed or removed during a shop update, the clicks keep coming while the sales disappear. It looks like an affiliate problem and is a store problem.

At Affilyflow

Advertiser (merchant) in practice

As a store on Affilyflow you set your total price per sale: 20 % of it is our fee, and the 80 % goes to the affiliate as the rate the program shows. Commission is calculated on the amount excluding VAT – via the Shopify app, however, on the value of the items without shipping, where it is not yet confirmed whether VAT has been deducted. The same order can never count twice, because duplicates are checked on order or invoice ID per program.

You have the program's approval period (30–90 days) to reject a sale; if you do not, it is approved automatically. A rejection requires a reason the affiliate can read. Your webhook can only credit your own program's sales, and only stores with a confirmed email address are shown in the public catalogue.

Frequently asked questions

What is an advertiser in affiliate marketing?

The advertiser is the company that runs the affiliate program: it sells the product, sets the commission and pays for the sales affiliates deliver. The role is also called the merchant. The counterpart is the affiliate, who sends the traffic.

How much does it cost a store to run an affiliate program?

The store pays commission on the sales that actually come in, plus a fee to the network. In a commission-based model there is no cost for clicks or impressions that do not lead to a sale. On Affilyflow the store sets a total price per sale; the fee is 20 % of it, the affiliate gets the 80 %, and the fee is not deducted from the affiliate's rate.

Who decides the commission rate?

The advertiser. The rate is set in the program and should appear in the program terms together with what triggers a commission and how long the attribution window is. Changes should be announced in advance, because affiliates plan content around the rate that applied when they started.

Can a store be both an advertiser and an affiliate?

Yes. A company can run its own program and at the same time earn commission by referring to other companies' products. The roles are kept separate in the system, but it is the same company. You cannot earn commission on your own sales – that is self-referral.

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