Initial commission

Initial commission refers to the first-time payment or revenue percentage given to a partner or an affiliate by a company for bringing in a new client or making a sale.

Example: A marketing firm partners with a software company to promote its new project management tool. For each new subscription that comes through the marketing firm's referral, the software company pays the firm an initial commission. For instance, if the marketing firm's efforts result in a company purchasing ten subscriptions, and the initial commission rate is set at 15% of the subscription fee, the marketing firm earns this percentage for each of the ten new subscriptions it has directly contributed to acquiring.

• Initial commission is a motivation for partners or affiliates to prioritize and boost a company's product or service to new clients.
• This commission model establishes a foundation for long-term partnerships and revenue-sharing agreements between companies.
• It provides an upfront reward to partners for their marketing and sales efforts, prior to any recurring commission structures that may also be in place.

Understanding initial commission helps businesses structure effective affiliate and partner programs, incentivize sales, and strategically expand their market reach and customer base through collaborative efforts.