Pay-Per-Sale

pay-per-sale refers to a commission model where a business pays its partners or affiliates a fee only when a sale is directly attributed to their efforts.

Example: Imagine a software company (Company A) develops a project management tool and partners with a digital marketing agency (Company B) to promote its tool. Under a pay-per-sale agreement, Company A pays Company B a predetermined fee for each subscription purchased by customers who are referred by Company B's marketing efforts. This arrangement ensures Company A pays only for tangible results, while Company B is incentivized to drive effective marketing campaigns.

• Aligns the interests of both the product owner and the marketing partner towards generating actual sales.
• Reduces marketing and advertising risks for the vendor by shifting the cost-of-sale to post-transaction.
• Encourages partners to optimize their marketing and sales strategies for conversions rather than just clicks or impressions.

Understanding pay-per-sale helps businesses optimize their partnership and affiliate marketing strategies, focusing on performance-based rewards that drive real sales. This approach facilitates a more efficient allocation of marketing budgets, ensuring expenses directly contribute to revenue generation.