Glossary

Commission cap

Updated

Commission cap: A commission cap is a ceiling on what a creator can earn from a deal or a video, set as a total amount, a per-order maximum or a time limit.

A cap limits the brand’s exposure. Three common shapes: a total cap (the creator earns at most $2,000 from this video), a per-order cap (commission is paid on at most $200 of any single order, so a bulk purchase does not pay out thousands), and a time cap (commission is paid for 90 days from posting, then stops). Caps are more common on ad spend share and views-based deals, where a video that takes off could cost the brand more than it planned, than on sales share, where every commission dollar came with revenue.

Programs that have no cap say so as a selling point; Shopify’s affiliate program states “No commission caps. Ever.” (Shopify).

Example. A brand offers $6 per 1,000 views on a creator’s post with a $900 cap. The post reaches 400,000 views, which would be $2,400 uncapped; the creator receives $900. A second brand offers 10 % of ad spend with no cap and spends $12,000 on a creator’s video; that creator receives $1,200. The capped deal protected the first brand from its own success. Example numbers.

When brands use it. The pain this answers: “Why add to my CPA when I can just pay $200-300 a video?” A cap is how a brand says yes to commission without an open-ended bill. Brands cap views-based deals because organic reach is unpredictable, and they cap ad spend share when the media budget is not fixed yet. They rarely cap sales share, because a sale that pays commission also pays the brand. A cap should be disclosed in the brief, not discovered at payout.

The creator’s view. A cap turns upside into a ceiling, so the rate should be higher to compensate, or the cap should be high enough that reaching it is a good month. Ask whether the cap resets (per video, per month) and whether views or spend above the cap still count toward bonuses or future terms.

Related terms

Sources

  1. Shopify Affiliate Program (no commission caps) · shopify.com