The most common way to set an affiliate rate is to look at what a competitor pays and match it. That gets you a number quickly and tells you nothing about whether you can afford it.
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Start from contribution margin
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Work out what a sale actually leaves you after cost of goods, payment fees and support. The commission comes out of that, not out of revenue. A 30% rate on a product with a 25% margin is not generous — it is a loss.
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Compare with your other channels
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If a paid click costs you more per acquisition than an affiliate commission does, the affiliate is the cheaper channel and probably underpaid. The comparison that matters is against your own alternatives, not the market.
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Use tiers instead of one number
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A rate that rises with volume lets you pay a beginner what you can afford while paying your best affiliates what they are worth. It also gives them a reason to send the next sale here rather than somewhere else.
