RevShare, also known as Revenue Sharing, is a type of affiliate commission. According to this model, a company shares a predetermined percentage of either a product or service price with their affiliates. The latter get paid a percent of the revenue made by their referred clients.
Some people refer to revenue share as “spread share”. Affiliates have shares on both profits, losses and purchases of the active referred clients. Most of them prefer this type of commission, instead of the Cost Per Acquisition (CPA) commission type, because of its longer-term benefits. These include earning commissions in the future as long as your referred trader keeps actively trading with the forex broker. However, revenue share commission plans vary depending on multiple factors such as the trading activity of your lead.
Being a multi-meaning term, the definition of RevShare changes depending on the point of view of the participant. This article is explaining both sides. Let’s get to it.
Revenue Share affiliate programs
For businesses, revenue sharing means sharing a percentage of their revenue with the affiliate marketers. In other words, they share a percentage of the total revenue that the affiliate generated. RevShare affiliate programs are usually recurring, meaning that once a client makes a purchase, the company and the affiliate are connected for a longer period of time.
Revenue Share affiliates
For affiliates revenue sharing is even more simple. They earn a commission each time a sale is made. There is also another way for affiliates to earn commission: through sub-affiliates. According to this method, sub-affiliates use the platform affiliates use and sell the same products. Each sale made, equals a commission for the affiliate.
Revenue Share vs CPA
CPA is a one-time payment method, by contrast to RevShare, and refers to the fee you receive when your referred trader registers with an online forex broker, makes a deposit and starts trading. The commission will depend on your client’s country and there are important criteria to be met, like providing a minimum deposit and completing the first trade. Another requirement is that clients will need to fund their account within a certain period of time.
All in all, RevShare is for those who can get good leads and want to make profits well into the future, so it’s the best long-term option. On the contrary, CPA is for those who can get people to fund their forex account early and want fast earnings, so this is a shorter-term solution.
Benefits of revenue sharing
One of the most important advantages of RevShare is that its structure allows participants to focus on mutual success. The goal is generating sustainable revenue. Also, revenue sharing provides a form of control over a company and it is usually a simple concept as it enables clearer direction while businesses can focus on recurring growth and generation of returns.
As the name suggests, RevShare refers to sharing revenue but what revenue you are sharing will depend on your business model. If you go with sub-affiliates your revenue sharing will be around that and you will have no obligation towards the products or the participants. However, as a company, you will need to make sure that you have a good quality product and that your affiliates keep bringing traffic and driving consistent sales.
Disclaimer: This information is not considered as investment advice or an investment recommendation, but is instead a marketing communication