Part 1: Hidden Affiliate Marketing Fees
CPA only partnerships still cost a brand money...
Someone asked on our Slack channel last week, “Do you actually need a budget to get started, or is it just commission based when someone converts?” 😳 Great question. We love these.
Buckle up for a walkthrough that includes a couple examples of ways that brands we have worked with categorize their marketing budgets. This may help you with some verbiage if you’re just getting started & you need to help them clarify what #s are associated with this channel!
What we don’t want to happen ⤵️…literal things of nightmares.
Kris was working on a project for months. She was told that she had X amount of budget to allocate to paid partnerships —> which translated in her 🧠 to the amount of flat fee spend. First breakdown:
Flat fee spend = $$ amount that you have to spend on a partnership. A creator/publication/app/cashback platform is working with you on a very specific campaign and you pay them $5,000 FLAT…
Accrued spend = commissions that you owe partners based on sales they convert through CPA. You will owe this to ALL of your partners that use their affiliate links, not to just flat fee spend partners.
After 6 full months of looking at the budget, having multiple calls about partners & where budget was being spent, reporting on numbers & performance in the program, the question was asked, “Are you planning for commissions out of this allocated monthly budget number?”
The moment where your stomach drops and you want to 💩 your pants at the same time.
No…commissions had NOT been a part of this budget. Anywhere.
Now, this may seem like not the biggest deal, but depending on the size of your program and the $ you are spending…this could be a multi-six figure problem to solve. 😬 And it was.
Kris had been such an artist - spending down to THE DOLLAR, staying within monthly budget & making sure it was spent in such a way that conversion rate was up, campaigns were optimized, she was talking to partners every week and SO proud of the dedication she was putting into really cleaning up their program and being intentional on where that money was going.
You can imagine the immediate WTF feeling that followed that question and looking at how much $ in commissions had not been included in that budget… the hours spent on the backend moving the rest of 2025’s quarterly budgets around in order to absorb that amount. Kris may be getting anxious all over again thinking back to March. 😵💫
The theme of this cute little story…
When you are taking over an existing program & working with a brand who is established, been running affiliate for YEARS and have systems in place, the questions you ask will be a little different than the questions you ask when you are just getting a smaller brand started on an affiliate platform.
Here are a few things to get clarity on before becoming a numbers artist:
How do you define “monthly budget” and “allocated spend”?
What are included in that number?
Is flat fee budget to work with creators also coming out of this budget?”
Do you understand your platform fee structure as it sits right now?
Does your finance team log into the platform to reconcile invoices?
Are “lock date” “cookie window” and “net30” all terms you are familiar with?
This particular brand had signed a hefty contract with Impact that included a platform incremental usage fee which allows that brand to purchase additional payout volume needed “a la carte” until the volume resets. When you have incremental usage fees, it means you surpassed your annual volume with actions that took place. It means the program is growing and doing well, because when you aren’t hitting your volume, it means you’re paying more for your SaaS fee in comparison to the volume you are using.
Again, you could be asking, “Kris…is this really that big of a deal?” Yes, my love…it is. Especially on a program that has a multi million dollar volume and 6.5% incremental usage fee on that multi million dollar number.
It’s one thing for you to understand this & know it’s coming and maybe assume (remember how to break down ass-u-me) that a brand who had been operating their own program for years would also totally expect this.
It’s Better To Be Safe - EVERY SINGLE TIME.
Not knowing the right questions to ask is a part of life. You only know what you know and the only way to learn is to be in a situation that teaches you and some times those on the job learning moments are TOUGH. But if the above example teaches us anything, it’s to get so nitty gritty with questions, hop on a call with the affiliate platform & ask them questions, read, watch, listen & then present to the brand your strategy with what makes sense once you’ve gathered information.
Brands that are brand new to affiliate or maybe not brand new but just new to having someone intentionally managing their backend can be handled differently.
Below are a handful of questions that you can ask when these type of brands come to you and say “We need help managing our affiliate program!”
