Commission only means the agency is paid a share of sales or profit with no fixed fee. A hybrid adds a smaller retainer underneath. Commission only fits established brands above about $50,000 monthly profit. Hybrids fit rebuilds, where foundation work happens months before revenue moves.
The short version
- $50,000 a month in profit is the line we use. Above it, commission alone is fair to both sides. Below it, volatility does the deciding.
- A hybrid is two prices, so compare two things. The floor you pay in a bad month and the ceiling you pay in a great one.
- Commission punishes the rebuild. Three months of listing and creative work produce no commission and plenty of cost.
- Attribution is where hybrids get argued about. Agree the measurement before the percentage.
- The outcome benchmark stays the same either way. A majority of managed brands profitable inside their first year is the standard worth holding anyone to.
Start with the number
Take your last three months of profit, not revenue, and average them. That single figure decides most of this argument before anyone discusses percentages.
Above about $50,000 a month, profit is predictable enough that a pure commission arrangement can be fair. Below it, one supply delay or one competitor promotion swings the month so hard that either you overpay for a lucky quarter or the agency works a rebuild for almost nothing. Neither party behaves well under those conditions.
We offer revenue share only above that threshold, at 10 to 20 percent with no fixed fee underneath. Everything below runs on a flat tier, from $800 a month for one product to $2,400 for five. That is not generosity. It is the structure that survives a bad quarter without anyone renegotiating.
Side by side
| Commission only | Hybrid retainer plus commission | |
|---|---|---|
| Fixed monthly cost | None | A reduced retainer |
| Agency income in a flat month | Near zero | Covered at the floor |
| Best fit | Established brands past the profit floor | Rebuilds and launches |
| Main risk to you | Pressure toward short-term sales | Paying twice for the same growth |
| Main risk to them | Carrying a rebuild unpaid | Complacency at the floor |
| What to fix in the contract | Attribution and the profit definition | The cap, and what the retainer buys on its own |
The sequence, with a gate at each step
Work through these in order. Do not move to the next until the current one has a written answer.
- Establish the baseline. Twelve months of revenue, profit, and advertising spend by month. Gate: both sides sign off on the same numbers before any percentage is proposed.
- Define what is being shared. Revenue or profit, and if profit, which costs are deducted before the calculation. Gate: a worked example on last month's real figures.
- Fix the attribution window. Which sales count, over what period, and how new product launches are treated. Gate: a rule you could apply yourself from a report you can access.
- Set the floor and the cap. In a hybrid, what the retainer covers alone, and what the total looks like in your best plausible month. Gate: the arithmetic on both extremes, in writing.
- Agree the exit. Whether commission continues after termination, and for how long. Gate: a clean end date. Ours is month to month with 30 days' notice and nothing trailing afterwards.
- Confirm the outcome standard. What the agency considers success at twelve months. Gate: an answer specific enough to fail. We hold ourselves to a majority of brands profitable within their first year, which is a claim you can check against the accounts they still manage.
Where each model actually breaks
A pure commission deal breaks during the exact period when good work is most valuable. If your listings need rebuilding, your images need reshooting, and your advertising needs restructuring, that is three months of investment before revenue reflects any of it. An agency paid only on results either declines the account or pushes for whatever moves sales this week, which is usually a price cut or a bigger budget. Both borrow from next quarter.
A hybrid breaks in the opposite direction. The retainer covers the agency's costs, so the commission becomes upside rather than motivation. If the floor is high enough to be comfortable, the incentive is decorative. Ask directly what proportion of expected total income the retainer represents. Anything above about half means you are buying a retainer with a bonus attached, which is fine, as long as you know that is what you bought.
What most agencies will not tell you about commission structures
Commission on revenue and commission on profit are not variations of the same deal. They are opposite deals. Revenue-based commission is compatible with discounting, heavy advertising, and volume at low margin, all of which increase the fee while shrinking your business. Profit-based commission removes that conflict and introduces an accounting argument instead. Pick your problem deliberately.
The second thing: a percentage that sounds small compounds against a business that is growing anyway. If your brand was on a 20 percent annual trend before anyone arrived, a share of that growth is being paid for weather. Baseline the trend first, then agree what counts as attributable.
Related answers
- Fixed fee vs rev share for Amazon agencies
- Typical retainer vs performance-based for Amazon management
- Compare hybrid fee plus rev share models
- Contract terms to negotiate with Amazon agencies
- Amazon agency pricing and economics: the complete guide
The threshold, the percentage band, and the flat tiers underneath are all published at Flapen.
