Pricing and margin
Why some products cannot carry a commission at all
Thin-margin products cannot fund a percentage, however small it looks against the price. What to do instead of quietly cutting the rate — and why a headline rate that shrinks is worse than no programme.
How MarketWar handles it
MarketWar marks a product INELIGIBLE rather than reducing the creator's rate on it. A £10 product with £9.80 of variable cost supports £0.01 of reward capacity, and 0.5% of it is £0.05 — so it is refused, with both numbers shown, instead of paying a quieter 0.05%.
A commission is paid out of contribution, and some products have almost none. That is not a marketing problem and no channel fixes it.
The number that decides it
Take a £10 product with £9 of goods, £0.50 of fulfilment and £0.30 of payment fees. Contribution is £0.20. Reward capacity at the 5% ceiling is one penny.
A 0.5% commission on the £10 is five pence — five times what the transaction can fund. The sale is profitable; the sale with a commission attached is not.
The two ways to handle it, and why one of them is wrong
Reduce the rate on that product. This is what most platforms do, silently. It is the wrong answer, because the rate is the promise. A creator told they earn 0.5% who finds they earned 0.05% does not conclude that this product was different — they conclude the programme is unreliable, and they are right to.
Mark it ineligible. MarketWar does this, shows both numbers, and says which one it failed. The product pays nothing and the rate stays true everywhere it applies.
What a brand actually does with this
Open the range that can carry a commission and exclude the rest by name. In an open catalogue that is one switch per item with a stated reason, and creators browsing see only what they can genuinely earn on.
The thin products still sell — as the second thing in a basket that a commissionable product opened.
What to do when most of the range fails
Sometimes the answer comes back and most of what you sell cannot carry a commission. That is worth knowing on a Tuesday afternoon rather than four months into a programme, and it is a pricing conversation rather than a marketing one.
Three things usually help, in this order.
Raise the price of the one product you know is underpriced. Almost every small business has one, and a £2 rise on a £10 item nearly triples the contribution — from 20p to £2.20 in the example above, which takes reward capacity from a penny to eleven.
Bundle. Two thin products sold together share one set of fulfilment and payment costs, so the pair contributes more than the sum of the parts. A bundle can be eligible where neither item is.
Move the commission to the second sale. If the first order is a loss-leader by design, pay the creator on the repeat rather than the acquisition. That is honest, it is easy to explain, and it puts the reward where the margin actually is.
The one thing not to do
Do not fund the commission out of the protected margin "just for this campaign". The margin is the number you named as untouchable before anybody was excited, and campaigns that reach it are exactly the campaigns that felt worth an exception at the time.
Related: how much you can afford to pay, what creators actually earn, and what stops a campaign that starts losing.
What this does not do
This makes some of your range unpromotable, and it is meant to. The alternative is a programme whose advertised rate is true on some products and not others, which is the version creators leave.
Common questions
Can I run an affiliate programme on low-margin products?
On the low-margin products themselves, usually not — there is nothing to pay from. What works is opening the range that can carry it and excluding the rest openly, rather than paying a reduced rate that nobody can quote.
Why not just pay a smaller percentage on cheap items?
Because a headline rate that silently becomes something smaller on some products is a rate nobody can trust. Creators compare notes, discover the number moved, and treat the whole programme as unreliable — including the products where it was honest.
What should I do with the products that cannot carry it?
Sell them as the second item. A thin-margin product that a commissionable one drags into the basket costs nothing in reward and still earns its contribution.
Related
How much can you afford to pay an affiliate?
The arithmetic that decides an affiliate rate: contribution, the margin you protect, and the ceiling above which a sale costs you money. With the numbers worked through on a £100 product.
What should you pay a creator who has no followers?
Most programmes turn away anyone under 10,000 followers and lose the person who was about to be big. The two-door model: 0.5% with no gate at all, 0.75% and 1% for a verified audience.
How do you know when to stop a campaign that is losing money?
The four numbers that decide it, why ROAS on its own is misleading, and what a holdout group tells you that attribution never will.