Costs and pricing
Part of What are average affiliate commission rates in the UK?
What are average affiliate commission rates in the UK?
UK affiliate commission benchmarks: how payouts are calculated by sector, what a rate really costs per order, and how to set terms publishers will accept.
What to take away
- UK retail affiliate programmes normally pay a percentage of the sale value, and the level follows sector margin rather than any published national average.
- Commission is usually calculated on the order value excluding VAT and excluding delivery, so the headline rate overstates your true cost.
- Your own network reporting is the most dependable benchmark, because it shows validated payouts rather than advertised rates.
- Cookie windows, validation rules and return rates change what you pay, so the rate and the programme terms are one decision.
Why there is no single UK commission average
There is no official series for affiliate commission rates in the UK. The Office for National Statistics publishes retail sales values and volumes, not the commission that merchants pay publishers, so ONS retail industry data shows how big a sector is, not what it pays.
Platform averages pool unrelated sectors. Network averages reflect only the merchants signed to that network. Both are useful context, and neither is a benchmark you should set terms from.
Sector margin does the real work. A retailer selling high-margin accessories can afford more than a grocery operation running thin margins. That is why two UK merchants with similar order values can sit at very different rates.
Comparative data is also hard to verify, because merchants rarely publish their rates and networks guard their commercial terms. Treat any figure quoted without a date and a sample size as a rumour.
The commission models UK merchants use
The structure matters as much as the number. A percentage rate rewards publishers for larger baskets, while a fixed fee rewards volume.
| Model | How the payout is calculated | Where UK merchants use it |
|---|---|---|
| Percentage of sale | A share of order value, usually net of VAT and delivery | Fashion, beauty, homeware, gifting |
| Fixed cost per acquisition | A flat sum per sale, whatever the basket size | Electricals, mobile contracts, subscription boxes |
| Hybrid | A smaller percentage plus a flat top-up per order | Travel, insurance comparison, high-ticket retail |
| Lead or tenancy | Paid per enquiry, or a flat fee for placement | Finance, utilities, B2B software |
Publishers must also make paid links clear, and CAP affiliate marketing guidance sets out what the ASA expects. A programme that is awkward to disclose cleanly will struggle to attract established content sites, whatever the headline rate.
How to set a rate from your own margin
Work backwards from your own margin rather than forwards from a competitor advert.
- Calculate contribution margin per order: average order value, less VAT, delivery cost, payment fees and product cost.
- Decide the largest share of that margin you will pay away, and write the ceiling down before any negotiation.
- Convert that ceiling into a rate quoted against net order value, so publishers can compare it with rival programmes.
- Check what similar UK programmes advertise, and read network reporting rather than forum rumours: comparing Awin and Tradedoubler shows what each platform reports on transactions and reversals.
- Set a review date, and give notice before any cut, because publishers plan content around expected earnings.
Commission is a VATable supply, and the Value Added Tax Act 1994 sits behind the rules once programme fees count towards the registration threshold.
A worked example with labelled pound figures
The figures below are illustrative arithmetic, not a market survey.
| Line | Amount |
|---|---|
| Average order value | £80.00 |
| VAT at 20 per cent | £13.33 |
| Net order value | £66.67 |
| Delivery cost to the merchant | £4.50 |
| Payment processing | £1.20 |
| Product cost | £30.00 |
| Contribution margin | £30.97 |
At a 10 per cent rate the commission comes to £6.67, roughly 22 per cent of contribution margin. At 15 per cent it is £10.00, close to a third. The higher rate only holds if returns and validation losses stay low.
Postage is excluded from the commissionable value in most programmes, which is why the net order value matters more than the headline basket size. A publisher earning £6.67 an order needs about 150 orders to reach £1,000.
Common questions
What is a typical affiliate commission rate for UK retail?
There is no published UK average. Rates are quoted either as a percentage of the sale or as a fixed sum per order, and the figure depends on the sector, the margin and the publisher types a merchant wants to attract.
Do I pay commission on VAT and delivery?
No, if the programme is configured correctly. Commission is normally calculated on the goods value excluding VAT and excluding delivery, so quoting a rate on gross order value quietly raises your cost. Publishers registered outside the UK add another layer, which is why how VAT applies to affiliate programmes is worth reading before you publish terms.
Should commission rates differ by publisher type?
Usually yes. Cashback and voucher sites convert well but take a broad slice of orders you might have won anyway, while content sites justify a higher rate by influencing earlier in the journey. Many programmes run separate rates for each publisher group.
How often should rates be reviewed?
Twice a year is a sensible rhythm, plus any time product margin moves sharply. Give publishers notice before a reduction, and expect to lose placements if you cut without warning.