Starting an Affiliate Program for Your Store: The Commission Math

To set an affiliate commission that grows sales without losing money, start from your contribution margin per order, not from what other brands pay. Subtract the customer discount your affiliate code gives away, the app’s fees and the commission itself, then ask how many affiliate orders would have happened anyway. In our hypothetical $80 store, a commission of up to about 44% breaks even if every affiliate sale is truly new. If only 60% are new, the ceiling drops to about 19% to 22%, depending on the app.

This guide walks through that maths step by step, shows what three affiliate tools charge, and gives you a setup checklist. Shopify Collabs details come from Shopify Help Center pages, and UpPromote and Refersion prices from their own pricing pages, all checked on November 10, 2026. We have not run these programs ourselves. The store and its numbers are hypothetical.

Why commission rates go wrong

Most stores pick a rate by looking around. A competitor pays 15%, a creator asks for 20%, an app’s setup screen suggests 10%. None of those numbers knows your margin.

Three costs are easy to miss:

• The customer discount. Affiliate programs usually hand each partner a discount code. That discount is a cost on every order that uses it, before any commission is paid.
• Platform fees. Affiliate apps charge monthly fees, a share of referral sales, a fee on payouts, or a mix.
• Orders you would have got anyway. When a regular customer finds a code on a coupon site, or a fan who was already going to buy clicks a creator’s link, you pay commission and a discount on a sale you already had.

The third cost is the big one, and no dashboard shows it to you directly. The model below makes it visible.

What affiliate apps charge

Here is what three common options state on their own pages. Prices are in US dollars as shown and change often, so confirm them before you sign up.

Tool Monthly price Fee on referral sales Commission types named Notes

Shopify Collabs Not stated on the help pages we checked 2.9% processing fee on every automatic commission payment, billed on your Shopify bill Commission percentage per program, with rates per collection All Shopify plans except Starter and Retail. Collabs says it is not accepting new creator signups at this time.

UpPromote Free Free None Commission on order value, special product commission, coupon code commissioning and others 1 affiliate program, 1 coupon per affiliate, a “$3,000 referral review per month” limit

UpPromote Growth $29.99 (or $299.90 a year) 2% of approved referral sales As above, 2 commission levels 14-day free trial on paid plans

UpPromote Professional $89.99 (or $899.90 a year) 1.5% Unlimited commission levels Enterprise plan is $199.99 with a 1% fee

Refersion Launch $39 or $29, depending on monthly or yearly billing 3% of affiliate-driven sales Percent of sale or subscription commissions Unlimited affiliates, clicks and conversions

Refersion Growth $199 or $159, depending on billing 2% of affiliate-driven sales Adds advanced options such as new versus returning customer commissions Refersion also lists flat rate and tiered commissions

From the Shopify Help Center (Collabs payments and setup pages), uppromote.com/pricing and refersion.com/pricing, checked November 10, 2026. Refersion’s page offers 20% off for annual billing.

Two details change the maths. UpPromote says its performance fee “applies only to sales from approved referrals tracked in app.” Refersion says it charges a percentage “of affiliate-driven sales, not your total store revenue.” Shopify’s 2.9% is charged on the commission, not the sale. On a $100 sale with a 10% commission, Shopify’s own example puts the fee at 29 cents.

If you already sell on Shopify and want to compare app costs against your plan fees, our Shopify plan break-even guide uses the same per-order approach.

The commission maths, step by step

Step 1: find your contribution per affiliate order

Contribution is what an order leaves you after the costs that rise with each sale: product cost, shipping and packing, and payment processing. Our hypothetical store has these assumptions:

• Average order value: $80
• Product cost: $28
• Shipping and packing: $9
• Payment processing: 2.9% plus $0.30 per order (an assumption for the model; use your own rate)
• Affiliate code: 10% off for the customer

Without a code, the order leaves $40.38. With the 10% code, the customer pays $72, and the order leaves $32.61. The discount alone costs $7.77 per order before you pay a cent of commission.

We calculate commission on the $72 the customer paid. Shopify’s Collabs pages we checked do not say whether commission is calculated before or after discounts, tax or shipping, so check how your app does it. If commission is paid on the pre-discount price, your real cost is higher than shown here.

Step 2: add the commission and app fees

Here is what each order leaves at four commission rates. We assume 50 affiliate orders a month, which spreads UpPromote Growth’s $29.99 and Refersion Launch’s $39 (the higher of its two listed prices) at about $0.60 and $0.78 per order.

Commission rate Collabs: total cost Collabs: order leaves UpPromote Growth: total cost UpPromote Growth: order leaves Refersion Launch: total cost Refersion Launch: order leaves

10% $7.41 $25.20 $9.24 $23.37 $10.14 $22.47

15% $11.11 $21.50 $12.84 $19.77 $13.74 $18.87

20% $14.82 $17.79 $16.44 $16.17 $17.34 $15.27

25% $18.52 $14.09 $20.04 $12.57 $20.94 $11.67

Our model, hypothetical $80 order with a 10% affiliate code ($72 paid). Total cost is commission plus app fees. Fee rates from vendor pages checked November 10, 2026. Calculated twice in Python (exact fractions and a separate order-by-order simulation).

Every row is still profitable per order. That is the trap. Per-order profit only tells you the program is fine if every one of those orders is new business.

Step 3: estimate how many affiliate orders are truly new

Call this your incremental share. If 60 of every 100 affiliate orders would not have happened without the affiliate, your incremental share is 60%. The other 40 customers would have paid full price and left you $40.38 each. Through the program they leave $32.61 minus commission and fees.

So the program has to earn enough on the new orders to cover what it costs you on the old ones. The break-even rule is:

Maximum total affiliate cost per order = (incremental share x contribution with the code) minus ((1 minus incremental share) x discount cost)

For our store at 60%: 0.6 x $32.61 minus 0.4 x $7.77 = $16.46 per order in commission and fees combined. With Collabs, that is a commission of about 22% of the $72 paid.

Highest commission before the program loses money, by incremental share. Our model using a hypothetical store; fees from vendor pages checked November 10, 2026.

Incremental share Max cost per order Max rate: Collabs Max rate: UpPromote Growth Max rate: Refersion Launch

100% $32.61 44.0% 42.5% 41.2%

80% $24.54 33.1% 31.2% 30.0%

60% $16.46 22.2% 20.0% 18.8%

40% $8.38 11.3% 8.8% 7.6%

Break-even commission rates on the $72 paid, our model. These are ceilings where profit is zero, not recommended rates.

What this shows:

• Incremental share matters more than which app you pick. Moving from 80% to 60% new orders cuts the ceiling by about 11 points. Switching apps moves it by 2 to 4 points.
• Coupon leakage is expensive. If your codes spread to deal sites and only 40% of affiliate orders are new, even a 10% commission loses money on two of the three apps here.
• Break-even is not the target. Set your rate well below the ceiling so the program pays for your time, product gifts and refunds you cannot claw back.

As a check: at 15% commission on Collabs with a 60% incremental share, our store gains about $535 per 100 affiliate orders compared with having no program. At 25% it loses money.

Step 4: decide whether repeat purchases change the answer

If an affiliate brings you a new customer who orders again, the first order is not the whole story. Suppose a new customer is expected to bring $20 of extra contribution from later orders (an assumption; use your own repeat data). At 100% incremental share, the Collabs ceiling rises to about 71%. At 60%, it rises to about 38%.

That is the case for paying more for new customers than for returning ones. UpPromote lists a “New customer commission” option and Refersion lists “New vs returning commissions” on its Growth plan. Only count repeat value you can see in your own data. Our guide to calculating customer acquisition cost correctly shows how to compare what you pay affiliates with other channels.

How to estimate your incremental share

No app reports this number, so you have to estimate it. Some practical signals:

• New versus returning customers. Check what share of affiliate orders come from customers with no previous orders. Returning customers using a code are the most likely to be non-incremental.
• Where clicks come from. Content that reviews or shows your product (videos, blog posts) is more likely to create new demand than coupon listings that catch people already at checkout. Tag affiliate links with UTM parameters so you can see the referring site. Our UTM naming system keeps those reports readable.
• Code use without a click. If a code shows up in many orders that had no affiliate link click, it has probably spread beyond the partner’s audience.
• A holdout test. Pause a partner, or a code, for two to four weeks and watch whether total sales fall. If they barely move, most of those orders were coming anyway.

If you have no data yet, plan with a cautious figure, such as 50% to 60%, and raise rates later for partners who prove they bring new customers.

Setting up commissions in Shopify Collabs

These are the admin paths shown in Shopify’s Help Center on November 10, 2026.

1. Check eligibility. Shopify says Collabs is “available on all Shopify plans except for the Starter and Retail plans.” Open access programs are available to all merchants, but only creators from the United States, the United Kingdom and Canada are currently eligible.
2. Create a program. For an open program, go to Apps > Collabs > Programs > Activate open access, then enter your rate in the Commission section. You can set rates per collection. For a private program, go to Apps > Collabs > Programs > Create invite program, and set the link destination, the customer discount and the commission percentage.
3. Set the holding period. Shopify’s default holding period is 30 days, and you can set it from 1 to 90 days under Payments > Settings. During this period, commissions on canceled and fully refunded orders are canceled automatically, and you can open a dispute. Set it longer than your return window so refunded orders do not earn commission.
4. Plan for gifts. Under Apps > Collabs > Programs > Gifts, you can send connected creators a free product, a percentage discount code or a fixed amount code. Shopify says free shipping always applies to gifts and you fulfill them. Count gift cost in your program budget.
5. Understand payouts. Commissions go on your Shopify bill as “Shopify Collabs Commission” after the holding period. Creators are paid through Hyperwallet by PayPal or bank transfer, twice a month, once their balance reaches $25 USD. US merchants can collect W9 forms; without one, Shopify caps a creator’s payouts at $599.99 USD a year.

Shopify’s pages do not state how partial refunds or refunds after the holding period are handled for commissions. If returns are common in your category, that matters. Our guide to normal return rates for online stores helps you judge your exposure.

Common mistakes when setting commission rates

• Stacking a large discount on a large commission. A 20% code plus a 20% commission is 36% of the original price gone before fees. Pick one generous lever, not both.
• Using one rate for every product. Low-margin items can lose money at a rate that works for high-margin ones. Collabs supports rates per collection, and UpPromote and Refersion list product-level commissions.
• Short holding periods. If commission is released before your return window ends, you may pay on orders that come back.
• Ignoring fixed costs at low volume. At 10 affiliate orders a month, Refersion Launch’s $39 is $3.90 per order. At 200 orders it is under $0.20.
• Treating every affiliate order as new. This is how programs that look profitable on paper quietly cost money.

Disclosure rules for people paid to promote products are outside the scope of this article. In the US, the FTC’s page “FTC’s Endorsement Guides: What People Are Asking” covers endorsers who have “been paid or given something of value to tout the product.” Check the rules in each country where your partners publish.

What you should check next

1. Work out your contribution per order with and without your planned affiliate discount.
2. Confirm how your chosen app calculates commission: before or after discounts, tax and shipping.
3. Add the app’s monthly fee and per-sale fee at a realistic monthly order volume.
4. Pick a cautious incremental share and find your break-even rate with the formula above.
5. Set your starting rate well below that ceiling, with higher rates reserved for new customers if your app supports it.
6. Set the commission holding period longer than your return window.
7. Review new versus returning share and referring sites after the first month, and adjust partner by partner.

Frequently asked questions

What is a normal affiliate commission for an online store?

There is no rate that fits every store, and we have not found an official benchmark worth quoting. The useful number is your own break-even ceiling, which depends on your margin, the discount you give and how many affiliate orders are new.

Should I pay a percentage or a flat amount?

A percentage scales with order size, so it suits stores with varied basket sizes. A flat amount protects you when order values vary widely but margins do not. Shopify’s Collabs pages describe percentage commissions; Refersion lists both percent of sale and flat rate options.

Do I still need a discount code if I pay commission?

Not always. A code gives shoppers a reason to buy and helps track creators who share codes rather than links, but it costs you on every order. Our model shows a 10% code reduces the break-even commission by several points, especially when many orders are not new.

Can I use Shopify Collabs on the Starter plan?

No. Shopify’s help pages say Collabs is available on all Shopify plans except Starter and Retail. Shopify also says Collabs is not accepting new creator signups at this time, so check whether that limits your recruiting before you choose it.

Is an affiliate program better than paid ads?

It can be, because you pay only after a sale. But that advantage disappears if many affiliate orders would have happened anyway. Compare your cost per truly new customer from affiliates with your cost per new customer from ads, and if it helps, use our guide to raising average order value to widen the margin both channels share.

The takeaway

Set affiliate commissions from your own margin. Work out what each affiliate order leaves after the discount and app fees, estimate how many affiliate orders are truly new, and keep your rate well under the break-even ceiling that gives you. Then pay more for proven new customers and less for codes that only catch shoppers already at checkout.

Sources

• Shopify Help Center, “Shopify Collabs”. help.shopify.com
• Shopify Help Center, “Shopify Collabs for merchants”. help.shopify.com
• Shopify Help Center, “Setting up and managing Collabs programs”. help.shopify.com
• Shopify Help Center, Collabs merchant payments. help.shopify.com
• Shopify Help Center, Collabs merchant setup. help.shopify.com
• Shopify Help Center, “Getting paid for commissions on Shopify Collabs”. help.shopify.com
• UpPromote, Pricing. uppromote.com
• Refersion, Pricing. refersion.com
• Federal Trade Commission, “FTC’s Endorsement Guides: What People Are Asking”. ftc.gov

Last reviewed: November 10, 2026. Shopify Collabs eligibility, fees, holding periods and admin paths, and UpPromote and Refersion prices and fees, match the pages above as checked on that date.

How this article was made: researched and drafted with AI assistance, with every factual claim checked against the sources above. The $80 store, its costs, the 2.9% plus $0.30 payment rate, the 10% code, 50 orders a month, incremental shares and the $20 repeat value are hypothetical model inputs, not typical results.

Related guides

• Shopify fees explained: complete cost calculator
• How do you know if a product will sell before buying stock?
• Amazon cut affiliate commissions: what it means for publishers