What is the difference between one-time commission and recurring commission?



In this article I will explain the difference between the one-time commission and recurring commission, which is important for every affiliate to understand the difference between them.

One-time commissions:

One-time commission is a flat fee paid only once for each sale or referral.

Calculated and approved once for each referred customer. In order to generate the one-time commission:

·        The Affiliate must be in good standing.

·        The referred customer must not be offender.

·        The referred customer must have been active (for example subscribed to at least one non-free hosting plan) for a period of more than 2 months, as determined by measuring the passage of time starting from the referral activation date.

Once these things have been met the one-time commission shall be calculated, approved, and shall appear in the Affiliate’s account.

One-time commissions shall be calculated according to the following table, based on the total income received from the referred customer during the one-time commission period:

 

Income received

One-time commission

Less than $50

$0

$50 – $99.99

$50

$100 – $165.99

$100

$166 – $999.99

$150

$1,000 or higher

$500

 

When a customer subscribes to a yearly plan, the one-time commission shall be calculated by dividing the yearly paid plan by 12 months.

 

Example:

The customer is on a business plan which was active throughout the period.

The customer paid $200 for a business subscription.

The affiliate commission rate for the period is 10%.

The customer spent 30 days out of 30 on Business.

The recurring commission for 30 days is $20.

 

Another Example: 

Let’s say you are promoting a service that costs 150$ and your commission is 50% per sale.

You promoted this service and you were able to get 50 sales each month.

Simple Calculations:

50 * (150*0.5) = 3750$ per month. Nice!

And your advertising costs (In case of running paid Ads) are 1500$. Then you earn 2250$ every Month.

Per Year: 2250$ * 12 month = 27000 $ 

Great! BUT in this case, you will need to promote every month, pay for advertising every month, spend effort and Time every month!

Recurring Commission:

Recurring commission is where you can earn multiple commissions from a single referred customer for the customer's entire lifetime.

We selected a product at the same price: 150$. Your commission is only 30% and not 50%.

But what is different here, is that the product you selected gives recurring commissions, so you will get 30% every month without promoting again and again.

Let's say now, you promoted this service and you were able to get 50 sales in a month.

Simple calculations:

For 50 sales per month:

50 * (150*0.3) = 2250$ / First month

And your advertising costs are 1500$ then you earn only 750$ for the First Month.

But then, 2250$ for the next months without any advertising or efforts (It's recurring!). Did You Get and understand it!

So, the next months you will earn 2250$ without paying anything!

Per year: 750$ + (2250$ * 11) = 25500 $ with much less effort and time!

Which Scenario you will go with?

I think, Obviously, you will go with the second (recurring commission), which will become 90% passive with the same revenue or often even more!

This is a small example, of how selecting the correct product (even with lower commission) may be critical in affiliate marketing.

Of course, I am not saying that you should not go with single or 1-time commission products! NO.

I am just showing the importance of selecting the correct product and how it may reflect on your work!

Conclusion:

The main difference between one-time commission and recurring commission is the frequency of payment. One-time commission is a flat fee paid only once for each sale or referral, while recurring commission is paid repeatedly over time for as long as the customer remains a paying customer. Recurring commissions are typically a percentage of the customer's recurring payments, while one-time commissions are usually a fixed amount or a percentage of the initial sale.

One-time commissions are beneficial for affiliates who want to earn a quick payout, while recurring commissions are ideal for those who want to generate a steady stream of income over time. Recurring commissions are also advantageous for merchants who want to incentivize affiliates to promote their products and services to a wider audience, as they provide a long-term incentive for affiliates to continue promoting the product or service.

Ultimately, the choice between one-time and recurring commissions depends on the specific affiliate program, the product or service being promoted, and the goals of the affiliate marketer. It is important to carefully consider the commission structure and payment frequency before joining an affiliate program to ensure that it aligns with your goals and expectations.

Small advice:

select at least two products to promote, one recurring, and the other is 1-time commission.