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Payment and models

Network fee

Also called network fee, override fee, network commission.

Short answer

A network fee is what an affiliate network charges for running tracking, approval and payouts. The fee is either deducted from the affiliate's commission or paid by the store. At Affilyflow the store sets a total price per sale; the fee is 20 % of it, and the affiliate gets the 80 % – exactly the rate shown.

Definition of Network fee.

The fee is the network's business model and pays for the infrastructure between store and affiliate: click registration and attribution, order deduplication, approval flow, balance calculation, payout administration and support. Without a network, the store would have to build tracking itself and settle with each affiliate individually – the fee is the price of not having to.

The construction decides who really pays. In one model the fee is taken out of the commission, so the affiliate gets the program rate minus the fee. In another, the fee is added on top of the commission as a separate cost for the store. The difference sounds technical, but it determines whether the rate on a program is what the affiliate actually receives – always ask before comparing programs on rate.

The size of the fee is stated as a percentage – but the base varies: with some networks it is the commission, with others the store's total price per sale, and rarely the order value. At Affilyflow the fee is 20 % of the store's total price: a total price of DKK 100 gives DKK 20 in fees and DKK 80 to the affiliate – not DKK 200 of an order of DKK 1,000. For the store, the total affiliate cost is therefore the total price, commission plus fee, and that is the figure to use when the channel is compared with advertising measured on CPA.

How it is calculated

Network fee = total price × fee rate

total price
the store's total price per sale – a percentage of the order value excluding VAT or a fixed amount
fee rate
the network's share of the total price – at Affilyflow 20 %, so the affiliate gets 80 %

Example

Order value excluding VAT
DKK 1,000
Store's total price (10 %)
DKK 100
To the affiliate (80 % = 8 %)
DKK 80
Network fee (20 % = 2 %)
DKK 20

The store's total price is DKK 100 – the affiliate gets the DKK 80 (8 %) the program shows, and the DKK 20 fee is the network's share.

Why the model changes the incentives

When the fee is not deducted from the affiliate's rate, the program rate is a promise that holds: 10 % means 10 %. That makes programs comparable for affiliates and removes a hidden item from the calculation. For the store, the gain is that the whole rate shown works for the program's attractiveness – every krone of commission goes to the affiliate who is supposed to prioritise the program, instead of part of it disappearing along the way.

The construction also makes the price verifiable: the fee is always 20 % of the total price, so the store can reconcile the cost order by order. Rate and type are locked at the click, and since commission is calculated excluding VAT, the fee rests on the same clean base.

Network fee vs. commission

AspectNetwork feeCommission
Recipientthe networkthe affiliate
Calculated ona percentage rate – at Affilyflow of the store's total pricethe order value excluding VAT, or a fixed amount per sale or lead
Purposerunning tracking, approval and payoutspayment for the sale the affiliate created
At Affilyflow20 % of the store's total price – paid by the storethe 80 % – paid out at exactly the rate shown, locked at the click

The commission is the affiliate's payment for the sale – the fee is the network's payment for making the infrastructure work.

How it goes wrong

  • 01

    Program rates compared without knowing the model

    A rate of 12 % with the fee deducted can leave less in hand than 10 % without. Before two programs are compared, one question must be answered: is the rate what the affiliate is paid, or the base before the fee?

  • 02

    The fee is calculated on the wrong base

    A 20 % fee can mean 20 % of the commission, 20 % of the store's total price or – rarely – 20 % of the order. At Affilyflow it is 20 % of the total price: at a total price of 10 %, the fee equals 2 % of the order value. Budget the fee as 20 % of revenue and the cost is grossly overestimated.

  • 03

    The store forgets the total CPA

    The store's real cost per sale is the total price, commission plus fee – in the worked example DKK 100, not the DKK 80 the affiliate gets. If the affiliate channel is to be compared with advertising, DKK 100 is the store's CPA.

At Affilyflow

Network fee in practice

At Affilyflow the store sets a total price per sale. The fee is 20 % of it, and the affiliate gets the 80 % – exactly the rate the program shows. Rate and commission type are copied to the click row at the moment of the click, so a later change does not affect clicks already created, and an ongoing recurring agreement cannot be cut afterwards. The referral bonus for recruiting new affiliates is paid by us – the recruited affiliate keeps their full commission.

Frequently asked questions

What does it cost to use an affiliate network?

The price is the network fee, stated as a percentage – of the affiliate's commission or of the store's total price, depending on the network. At Affilyflow the store sets a total price per sale; the fee is 20 % of it, and the affiliate gets the 80 % – exactly the program rate they see.

Who pays the network fee – the store or the affiliate?

It depends on the network's model. Either the fee is deducted from the affiliate's commission, or it is added on top as a separate cost for the store. At Affilyflow the store pays the fee as part of its total price per sale, so the program rate is the amount the affiliate actually earns.

Is the network fee deducted from my commission as an affiliate?

At Affilyflow: no. The rate you see is the rate you get. If the program shows 8 %, you earn 8 % – the fee is 20 % of the store's total price (here 10 %) and is not deducted from your rate. Rate and type are locked at the click, so they cannot be changed for clicks already recorded.

How do I calculate my total price as a store?

You set the total price per sale; 20 % of it is the fee, and the 80 % goes to the affiliate. Example: an order of DKK 1,000 excluding VAT with a total price of 10 % costs DKK 100 – DKK 80 (8 %) to the affiliate and DKK 20 in fees. That figure is the store's real CPA for the sale.

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