Estimated read time: 4 minutes
Getting paid an influencer commission can be a significant revenue stream when we have an audience, use the proper channels, and get to talk about good products. Brands have figured that value out, too, and outreach to influencers to peddle products happens frequently.
I, for one, get messages via email, Facebook Messenger, and Instagram direct message. And some of those messages lead to decent business relationships, while others are a bit of a waste of time – especially when brands try to pay with “free” products.
Another thing I’ve noticed is that some brands seem to misuse the phrase influencer commission. Without naming names, here’s an example (and this is common):
“I’m an admin for Amazon Influencer only US. Do you want to shoot videos for our products?”
“Sure, what are the products? My flat fee for products that sell for less than $30 is US$99.”
“Our product video commission is $20.”
First, they are negotiating the price for a video before even sharing what the product is. Secondly, that appears to be the improper use of the word “commission.” Finally, while it may be an honest – maybe language – mistake, using the wrong terminology can creep into the industry and muddy the waters.
What’s the definition of an influencer commission?
Technically speaking, the definition of a commission is a payment once a task has been completed. So completely technically, a fee to create a video can be called a commission.
But that’s not how any salesperson or creator I’ve ever known has used the term commission. Instead, paying for a task is a fee – sometimes called a flat fee. For example, “My flat fee to create a 45-second product video is $99USD.”
That flat fee is for my time spent creating the video. Once I get paid an influencer commission that’s based – not on tasks or inputs – but on specific outcomes. So, if the product from the same video sells $200,000 worth of revenue, and my commission rate is 3 percent, I would earn $6,000 in influencer commission.
The Amazon Influencer Program seems to agree with that definition. Every video has the disclaimer that the influencer “earns commissions.”
And the Amazon program doesn’t pay influencers anything for creating videos. Instead, the program pays out a percentage to the influencer when a product sells after shoppers watch the video.
Why does it matter to understand influencer commissions correctly?
Working with influencers might be seen as a moving cost companies previously had to pay to influencers. Think of it this way: Back in the day, the company would have to pay for the talent in a video, the production of the video, and then the launch of the video. Depending on the production level, that can be a hefty price tag.
Now, look at this in the context of working with an influencer. Some companies now are asking influencers to review the product (which takes time), then shoot a video (takes time and equipment) and upload the video (also takes time).
And after all that, they want you to do that for $20 or a free product. It’s just not a good deal for the influencer for the most part. Some companies selling on Amazon also offer an additional commission to what the Amazon Influencer Program pays. That can also be a tracking nightmare, which I explain next.
How do you track influencer commissions?
Tracking commissions can be another challenge when a lot of companies approach you. Amazon does an excellent job of tracking things for anything on the Amazon platform.
You upload your video, and the rest is automatic. Somebody watches the video and buys a product; you get credit. Now, the process is no longer automatic when brands offer to pay an additional commission. Now, you have to go into the dashboard, find the right product and see how many – if any – were sold. Then you’ll have to report that back to the company.
It’s easy to see that process isn’t easily scalable with several brand deals. Plus, depending on sales, it might be a total waste of time.
For products sold off Amazon, having a good setup also matters. That’s another problem as brands use different systems, and once again, if you have to check a dozen or so platforms for potential commissions, that can end up being a time suck as well.
Influencer commission conclusion
None of this means that you shouldn’t venture into commission-based content creation. For example, I create Amazon product videos weekly and am a big fan of the program. Most of the content I create isn’t in partnership with the actual brand, though. It’s just me reviewing products I own on Amazon. Sometimes, I write an article as well on my blog.
But, it’s also essential to understand the industry terms and realities of payments. And a $20 fee for a $30 “free” product that I have to pay taxes on just like income isn’t a good deal.