What is revenue sharing?

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Revenue sharing is one of the most popular commission models for affiliate scheme partners, because rev shares allow affiliates to earn a percentage of any income they generate from achieving a successful sale for a partner site.

Revenue share advertising offers affiliates an opportunity to earn large sums of money over the medium to long term, and continue to earn a passive income from future purchases made by a referral without any further effort.

If you are trying to find out “what is rev share” or want the formal revenue sharing definition to help you to make a decision about what type of affiliate scheme or commission model to work with, in this article, we will explain how profit sharing sites and affiliate schemes work.

Affiliate revenue models

When it comes to affiliate schemes, there are lots of different types of revenue models that can be used to outline the profit sharing agreement between partners in the scheme, including the revenue share model, cost per click commissions, and cost per acquisition commissions among others.

Cost per click schemes pay you a set flat rate of commission for each successful click or visit you deliver to the partner site – a simple click is of course the easiest type of referral to achieve, but also, the lowest paid as a result of this.

Cost per acquisition schemes require the affiliate to work a little harder, to achieve a tangible action on the part of the referral – by achieving a sign-up, sale, or other predetermined action or activity. This type of affiliate marketing revenue model will pay at a higher rate accordingly, but the amount will still be a flat fee.

Revenue share websites and affiliate schemes, on the other hand, offer the affiliate the chance to earn a predetermined percentage of the value of any referral, and this is potentially the most profitable type of affiliate model to work with. When you partner with a revenue sharing site, every purchase your referral makes – including future purchases that may be capped within a certain timeframe or that may remain in place for the lifetime of the relationship – will earn you money, with no further work required on your part to continue making money from a previous successful referral.

Revenue sharing websites

Revenue sharing websites or profit sharing websites offer potential partners the opportunity to work with them to earn high-value commissions using the revenue share model to split the profits achieved for each successful referral.

The best traffic sites that earn a significant number of referrals for the partner site or that manage to achieve a number of high-value referrals can make significant amounts of money in this way, because the payment incentive for each referral is high enough to make it worth the extra effort involved in achieving a sign-up or purchase.

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Targeting potential big spenders or visitors that may make a smaller initial purchase but who will continue to make repeat purchases in the future enables revenue sharing affiliates to continue to earn an income over the long term, with commission paid out at the set percentage rate for future transactions, as well as for the initial purchase.

Rev share programs

In order to determine if the affiliate marketing revenue sharing model is the best option for you when it comes to maximising your potential income from promoting a scheme, it is important to understand how profits are shared in a partnership, and how shared revenue works.

Different revenue share schemes set different payment thresholds in terms of the percentage paid to the affiliate partner – these commonly range from as low as 5% to as high as 25%, or even more in some cases. However, even at the lower end of the revenue percentage spectrum, 5% commissions can still amount to large sums of money if you achieve a lot of referrals, or even in some cases if you achieve just a few high-value referrals who will spend a lot of money or keep returning to make repeat purchases.

The best revenue sharing programs offer a fair rate of percentage commission, which means not only the percentage amount that they pay out as the affiliate’s share, but also the time limitation in place on capped schemes, which is something else to look out for when choosing the best revenue sharing affiliate scheme for you.

Affiliate revenue model examples

To outline how the affiliate revenue share model works in practice, we’ve put together a simple example to demonstrate how revenue sharing sites structure and pay out to their partners.

• Imagine you sign up with a scheme that offers 10% commission on every purchase referral, and that continues to pay commission at the same rate for twelve months after the initial sign-up.
• You achieve a referral that spends $100 in the first instance – your share of the profit would be $10.
• Your referral then continues to make purchases at the rate of $50 per month over the next twelve months, and so each time they make their $50 purchase, you earn another $5.
• This means that your initial referral, which earned you $10, actually turns into a total of $70 over the course of the next year, with no further work on your part. This is because you benefit from additional commission earnings from the future purchases your referral makes, generating an ongoing passive income from one initial successful action or referral on your part.

If you had been using the CPC (cost per click) or CPA (cost per acquisition) model instead, the value of your referral would have been much lower – because you would not have benefitted from the high percentage split and potentially, ongoing commission payments that are the basis of the revenue sharing model.

Profit sharing tips and tricks

Signing up with a revenue sharing affiliate scheme can enable you to make big money, and earn an ongoing income long after each initial successful referral has been achieved. However, achieving these high-value referrals means that you need to target the right type of prospects in the first place – ones who will sign up and/or make a purchase, and not just click on a link.

This means that you should choose a revenue sharing affiliate website that offers products or services from a niche that you are confident in promoting, and are able to find and target buyers for, rather than simply relying on streaming lots of traffic and earning clicks alone.

Also, remember that the best revenue sharing programs will provide lots of support and incentives for affiliates to help them to succeed, which may mean access to special offers and promotions to use to enhance the scheme, and analytics and support to allow you to hone your approach and maximise your profits.

Disclosure: This post may contain affiliate links. We may receive a commission when you click on them, but this is at no extra cost to you. Read our privacy policy for more information.

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